IMPACT – MEDIUM

What is the change? An Emergency Decree on Managing the Work of Foreigners, issued March 28, contains significant changes to the rules for companies hiring foreign employees.

What does the change mean? While the regulations are pending, many of the changes have not taken effect and implementation has been delayed. Some of the provisions, including the use of new filing forms by applicants, have already been implemented.

  • Implementation time frame: Ongoing. Some of the provisions have delayed effective dates. See details below.
  • Who is affected: Thai companies employing foreign nationals and foreign national employees. Currently, only the One Stop Service Center, not the Employment Department, is implementing the changes. BOI and IEAT companies are not currently affected.
  • Business impact: Employers should prepare for the changes and take advantage of the grace period to review their records and ensure that their foreign workers are in compliance with work permit regulations in order to avoid penalties
  • Next steps: Implementing regulations are expected to provide greater clarity in coming days.

The following is a summary of key changes:

  • Work permit exemptions. Specific exemptions from work permits apply to certain categories, including individuals entering Thailand to organize, set up, participate or lecture at a conference, including providing training or seminars for designated purposes to be set by the Cabinet. Also exempt are foreign nationals who register with the Ministry of Commerce as a representative of a branch office, representative office, or regional office that has received a foreign business operation license. Details on how these exemptions will apply are expected in coming weeks.
  • Notification requirements. The employer and the foreign employee must notify the registrar of the Employment Department within 15 days of the employee’s work start date. An employer is also required to notify the registrar within 15 days of the termination of employment. Failure to register on time will result in a monetary penalty of up to 20,000 baht (about US$622). The notification requirements are currently in effect but the penalty provisions are delayed until July 1. Furthermore, employers who were employing foreign workers before the emergency decree must notify labor authorities of the employees’ names, nationalities and job roles within 60 days of March 28; these notification procedures will be announced by the director general of the Employment Department.
  • Extension of Urgent Work Permit. A foreign national who enters Thailand to perform urgent work must notify the registrar and complete the work within 15 days. If the work is not completed within that time, the employee may request an extension of no longer than 15 days, but the request must be made before the end of the original 15 days. Ministerial regulations are expected to detail the procedures to apply for an extension.
  • Change of work details. An employee who changes or adds a work location with the same employer is not required to notify the registrar as long as the location is the place where the employer is registered with the Ministry of Commerce or is legally obliged to work (such as under a contract to work at a client site). An employee may change or add job title or job duties for the same employer without notifying the registrar as long as the change is permitted under the emergency decree, i.e., is not one of the 39 prohibited professions.
  • Penalties. The emergency decree has lowered the maximum fines that were initially set to take effect in January; however, the fines for employer and employee noncompliance will still be increased from current amounts. Employers who engage a foreign employee in a prohibited occupation is subject to a fine of 10,000 to 100,000 baht per employee, and the employee is subject to a fine of 5,000 to 50,000 baht. Employers who hire foreigners without a valid work permit are subject to fines of 10,000 to 100,000 baht per employee, and an employee is subject to a fine of 5,000 to 50,000 baht. An employer who is a repeat offender will be liable for fines of 50,000 to 200,000 baht per employee and up to one year of imprisonment, and prohibited from employing foreigners for three years from the date of a final court judgment. These new penalties take effect July 1.

BAL Analysis: Businesses should prepare for the changes, perform the new notification requirements for foreign workers, and wait for additional details on the exempt categories. Regarding the new fine schedule, the Thai government has taken into consideration concerns and complaints from the business community by reducing the maximum fines and introducing a grace period to allow companies to file appropriate work permit applications and to allow time for authorities to adjudicate them.

This alert has been provided by the BAL Global Practice group and our network provider located in Thailand. For additional information, please contact your BAL attorney.

Copyright © 2018 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.