Wage Hike Compounded By Tougher Labour Rules

Tougher enforcement of labour laws is adding to the costs of businesses already shouldering the higher daily minimum wage, says Adecco, the Swiss human resources firm.Ms Tidarat noted several other payments are now associated with hiring an employee.

"Apart from the wage increase, hiring an employee includes Social Security contribution, worker's compensation and other benefits, in line with Labour Ministry rules," said Tidarat Kanchanawat, regional director for Thailand and Vietnam. She said these costs are calculated based on the minimum wage paid, causing costs to rise further. Social Security contributions from companies have risen to 5% this year from 3-4% last year.

Less known to most people, the Labor Ministry last year issued an order requiring employers to hire one disabled worker for every 100 normal workers. If companies cannot do this, they can either transfer funds worth the entire year's salary of that employee to the ministry's fund for handicapped people or provide an area free of charge for them to sell products, said Ms Tidarat.

She said the latter choice can be carried out only by hypermarkets and other businesses, so most...