Late Salary Payment and other advise needed

[W2Wang]

Hello everyone,

 

I have a company in Thailand and it's not making any profit yet. As such I need to transfer some funds abroad sometimes to cover the cost locally.

 

However, due to a bank processing error. My wire wasn't on time last month and by the time I rectify the problem, I would had been late in paying my employee salary for 5 days.

 

I have told them that I will cover any cost that may had occurred (such as fines..) due to this incident. So I need some advise.

 

1. Am I liable for any other  additional compensation? 

 

2. Are there any laws pertaining to late Salary Payment?

 

3. If an employee comes late most of the time, is she breaking the initial employment contract which state her office hours on paper?

(This is not related to question 1&2, it is just that I need to talk to the particular person. I just need to know if my thoughts are correct)

 

Thanks.

[catman20]

sounds like another farang business going down the tubes, good luck mate

[VocalNeal]

Depends on how many you have how long they have worked for you etc. If you have history that they trust I would say no problem. An extra 500 Baht for their trouble wouldn't go amiss. 

 

Keep the faith and good luck with the business. You might want to always keep one month's outgoing in your local bank to avoid such instances in the future.

[dotpoom]

29 minutes ago, catman20 said:

sounds like another farang business going down the tubes, good luck mate

A minefull of inspiration....

[1FinickyOne]

As you know, it is pretty rude and poor treatment of your employees to pay late - - they have bills to pay, and food to buy for their families... not to mention any anxiety that might be caused by them wondering if they are going to be paid at all...

 

And yes, you really can't blame them for taking advantage and coming late - - as they are likely out looking for another job. 

 

As you know, also,, if you have a business, it is necessary to plan ahead. 

[W2Wang]

Not going downhill actually. We have already pretty much balance out  and would had been profitable if it's not rainy season now.

 

I hope you can be more positive and have a brighter day ahead. 

[W2Wang]

5 minutes ago, kenk24 said:

As you know, it is pretty rude and poor treatment of your employees to pay late - - they have bills to pay, and food to buy for their families... not to mention any anxiety that might be caused by them wondering if they are going to be paid at all...

 

And yes, you really can't blame them for taking advantage and coming late - - as they are likely out looking for another job. 

 

As you know, also,, if you have a business, it is necessary to plan ahead. 

Totally agree. That is why I am seeking advise here.

 

It was a genuine admin error that caused this tho. 

[W2Wang]

53 minutes ago, VocalNeal said:

Depends on how many you have how long they have worked for you etc. If you have history that they trust I would say no problem. An extra 500 Baht for their trouble wouldn't go amiss. 

 

Keep the faith and good luck with the business. You might want to always keep one month's outgoing in your local bank to avoid such instances in the future.

Thank you for the input. 

[W2Wang]

Geez, I didn't know there are so any people being so negative, I hope life will be kinder to you and make you see more light. 

[realenglish1]

Then plan 2 months ahead so you have backup in case of a situation like this 

[1FinickyOne]

5 minutes ago, W2Wang said:

Totally agree. That is why I am seeking advise here.

 

It was a genuine admin error that caused this tho. 

Someone mentioned a little bonus for the late pay, which sounds like a good idea and I think a personal apology will go a long way too... I am a retired businessman and always abided by the old Chinese saying, 'pay your workers before their sweat is dry' - - or at least on agreed upon time. 

 

Good luck with your business and keep up employee morale... it helps. 

 

 

[chezy86]

Very brave of you to post this on here with all the sharks waiting in the shallows for a juicy bit of meat to get their teeth into. But we are not all negative. I wish you luck with your business hope you get it sorted. From experience my wife's friend was in the same situation and I know it caused her great heart ache as she could not pay her credit cards, buy food etc. From what was said most Thais live from month to month with little savings for emergencies so the sooner you sort it the better. I know she immediately looked for another job.

[seancbk]

50 minutes ago, W2Wang said:

Geez, I didn't know there are so any people being so negative, I hope life will be kinder to you and make you see more light. 

 

You should get used to it.   

Best of luck with your business.  I'm in a similar situation although my business is still in the setup stage.  

[edwardflory]

Solution:

KEEP in a SEPERATE bank account a estimated 2 months payroll.

 

When I was in business, I always had 2 months payroll stached away - failure to meet payroll in USA is very serious with investigations following upon a complaint.

[Autonuaq]

if you want to do something on the being late you have to issue a warning letter with  period of 30 days to reevaluate you tell what has to be improved and how the period is evaluated as well that the contract will be terminated. if not improved to the level that is acceptable

this letter is 3 times then you go to labor court and terminate the contract. the letter has te be in Thai 

labour court is for the protection of the employee so you need to prepare the case well

this tells what you expect and how to improve

signed by you and the staff and two widenesses

this letter you prepare and then have a meeting

 

The meeting you have you make a meeting report and let the employee and widenesses sign this too.

 

for labour court you then can file the case

the warnings

the meeting reports

the yearly or half yearly evaluation of functioning of the employee If you have them

the written employment contract

the reason for termination.

the letter of termination (registereed post)

 

When ask me first it is more for you to find out what is the cause and most of the time the reason for being late is a good reason, but afraid t speak with you about. When you understand the cause you probably can help out with a solution 

 

 

[blackcab]

You really should consider giving all your staff a discretionary cash payment. You broke the number 1 rule, which is pay your staff on time and in full.

 

Depending on their salary I would start at 1,000 baht each. For higher wage earners you need to pay more.

[MyFriend You]

2 hours ago, W2Wang said:

Thank you for the input. 

Years ago when I had a small business, I had seperate accounts for Employees salaries, and one for Business expenses, like the other poster, I kept a months advance salary balance in that account to take care of the worker bees.  After all, without them I wouldn't have a business at all.  Good luck  -  but your excuse for the 'rainy season' carries about as much weight as the old "They should realize, It's low season now and I don't make as much money as before"  It is not revellent.

[soinowinbkk]

1 hour ago, Autonuaq said:

if you want to do something on the being late you have to issue a warning letter with  period of 30 days to reevaluate you tell what has to be improved and how the period is evaluated as well that the contract will be terminated. if not improved to the level that is acceptable

this letter is 3 times then you go to labor court and terminate the contract. the letter has te be in Thai 

labour court is for the protection of the employee so you need to prepare the case well

this tells what you expect and how to improve

signed by you and the staff and two widenesses

this letter you prepare and then have a meeting

 

The meeting you have you make a meeting report and let the employee and widenesses sign this too.

 

for labour court you then can file the case

the warnings

the meeting reports

the yearly or half yearly evaluation of functioning of the employee If you have them

the written employment contract

the reason for termination.

the letter of termination (registereed post)

 

When ask me first it is more for you to find out what is the cause and most of the time the reason for being late is a good reason, but afraid t speak with you about. When you understand the cause you probably can help out with a solution 

 

This is GREAT advice. Thai labor law largely follows US labor practices and this pretty well describes the "proper, by the book" process. The last paragraph is great, too -- they might be too afraid to be honest with you so give it try, talking frankly and openly to seek some mutual agreement on a remedy. For the missed payroll, it's all about cash flow planning and contingencies -- sounds like you've learned your lesson and will tighten up things ASAP. Be sure to keep in direct communication with the staff as the process unfolds! PS - There is an English language version of Thai labor law available in most office supply stores (at least, in the past).

[johnnybangkok]

3. If an employee comes late most of the time, is she breaking the initial employment contract which state her office hours on paper?

(This is not related to question 1&2, it is just that I need to talk to the particular person. I just need to know if my thoughts are correct)

 

I think your other queries have been answered well enough by other posters so I'll concentrate on this issue for you.

Firstly,  a lot of what you can/cannot do is dependent on the time this person has been with you. Generally (although there are exceptions) if a person has been with you for less than their probationary period then you can dismiss them with a simple 'you have not passed probation due to your lateness'. If they have been with you for less than a year, then you can perhaps also risk this as this is not considered a sizable enough time in the eyes of the courts BUT I would still strongly recommend you follow established HR protocols by giving them a verbal warning first (witnessed by another employee and with a specific timescale for improvement), followed by a written warning with again clear instructions and timescales for improvement but this time ending with 'if this doesn't improve by the timescale I have mentioned, then you will leave me with no other option than to terminate your employment'. This process will cover you legally but has to be done in this order.

If they have been with you for some time and you are looking to fire them straight away without either of these actions having been done, then you will probably have to prove gross negligence which is highly unlikely since it is only lateness.  Don't go on  to them about them 'breaking their contract' as this is irrelevant to the process. If you have not followed proper HR protocols then any tribunal will think you have been unreasonable and not given the person a chance to improve and will therefore rule against you.  

Best of luck.  

[Khun Robert]

One of the best rules to run a company: 

 

[natway09]

Ran a business here for 18 years & twice had to apologize for 3 day late salary payment.

Paid advance for two persons so they could pay rent but they understood.

If they are looked after they will understand.

As for the soothsayers saying never have a business in Thailand as will go under

both our businesses have healthy bank accounts so do not worry about them.

Do not forget to plan for end of year bonus (at least one month)

[catman20]

9 hours ago, dotpoom said:

A minefull of inspiration....

no ! but true 

[cosmosis]

Beware... Technically a company that cannot pay its debts when they fall due is insolvent. To carry on trading with an insolvent company makes the Directors personally liable for all the debts of the company. Chok dee...

[bazza73]

Why wouldn't you get a bank loan to pay your employees quickly? I would think Thai banks have overdraft facilities just like Western banks.

[W2Wang]

12 hours ago, TunnelRat69 said:

Years ago when I had a small business, I had seperate accounts for Employees salaries, and one for Business expenses, like the other poster, I kept a months advance salary balance in that account to take care of the worker bees.  After all, without them I wouldn't have a business at all.  Good luck  -  but your excuse for the 'rainy season' carries about as much weight as the old "They should realize, It's low season now and I don't make as much money as before"  It is not revellent.

I don't know where it began. I didn't say anything about Rain season. Thanks for the thought, I will do the same into doing 2 separate employee accounts.

[W2Wang]

I have a decent welfare program in my company everyone is paid slightly above the minimum wage in Thailand and also lunch is provided (or a 50B which may be reimbursed).

 

1. I apologised to everyone,

2. offered to pay any "fines" that may had occurred from my late payments (5 day),

3. offered a 1000B compensation to every single person whom was on time last month (3/21 employees, although none was over 30 minutes late),

4. and had adjusted the company lunch incentive to cover only employees who come to work on time. 

 

I told everyone that they may talk to me if they feel unfairly treated. But to that, I will hold them to every single term and condition written on the employee's contract.

 

I also promised that this will never happen again, which indeed not likely to happen at all if I keep a 2 bank account system.

 

Everyone seem to be okay with it and I think it will be.

[ericthai]

15 hours ago, W2Wang said:

Geez, I didn't know there are so any people being so negative, I hope life will be kinder to you and make you see more light. 

Allot of negativity on TV when it comes to owning a business in Thailand. Mostly from guys that never owned a business in Thailand.  

 

when we started our company we had some delays with cash flow here and there.

We had no issues with workers. We would pay them something on pay day and the balance ASAP.   Every company tries to pay bills and workers on time but when you have customer paying late it disrupts cash flow.   Good luck to your company!

[HooHaa]

16 hours ago, W2Wang said:

Geez, I didn't know there are so any people being so negative, I hope life will be kinder to you and make you see more light. 

I think many are simply waiting to shuffle off this mortal coil after a lifetime of working for someone else.

 

They resent pretty much anyone who is actually doing something.

[HooHaa]

1 hour ago, W2Wang said:

I don't know where it began. I didn't say anything about Rain season. Thanks for the thought, I will do the same into doing 2 separate employee accounts.

I think you did, these are your exact words in fact:

Quote

We have already pretty much balance out  and would had been profitable if it's not rainy season now.

 

[W2Wang]

20 hours ago, HooHaa said:

I think you did, these are your exact words in fact:

 

balance out and making a loss is a different thing. 

 

and yes, i mentioned the rainy season. ah!