Min. Salary 300/Day

[johnlexo]

Good day

There is so many discussions going on about this, I would love to hear from some business experts what the real deal is.

300/day = 9000 Baht a month?

So let us assume a restaurant has wait staff that gets paid 7000/month, an assistant cook that gets paid 9000/month and a part time cleaner that works 80% and gets paid 6000/month and a manager that gets paid 14'000/ month now.

What would their salaries be from January 2012.

How in the world will any small business be able to absorb such an increase without raising their price structure significantly? In the restaurant/hotel industry this would probably mean at least a 10% cost/price increase.

How do experienced and professional foreign business owners handle this? What does this mean for the future of small business, especially in places like Pattaya, full of cheap customers.

Hoping to start a good discussion and hoping to get some good feedback from real business-people. Regards. JL.

Edited November 4, 2011 by johnlexo

[thaimate]

I presume what will happen is the same as happened in my firm when the minimum wage came in ,we lost contracts as we increased prices ,we sacked loads of staff to compensate and then carried on ,in our case the social security picked up the tab for the workers thrown out of a job . here in Thailand i suppose it will mean more people out looking through the bins for plastic bottles

Edited November 4, 2011 by thaimate

[flying]

So from your example you need to justify 360 Baht per month increase in operating expenses? I am guessing as you said 10% & I do not know what the pay increase is to be lawfully.

I do not agree that many folks will be out in the street because this increase is not selective to some businesses is it? If it is across the board then other businesses will not offer an alternative to customers.

All through the years pay is hiked in other parts of the world to adjust for increased living expenses.

It is just a cost of living increase...Pay cannot remain stagnant while cost of living increases.

As to coping with the 10% increase in operating costs..some of course will do better than others at increasing efficiency to offset some if not all of it.

Edited November 4, 2011 by flying

[Spoonman]

By my calculation the min salary @300b/day is 7800b per month not 9,000b, how did you come to this figure Johnlexo ?

[Bakseedaa]

Just keep paying them 150 baht per day and sack them every 5 and a half months.. re-hire the following week..! Who cares... and employ as many Burmese as possible..

[johnlexo]

By my calculation the min salary @300b/day is 7800b per month not 9,000b, how did you come to this figure Johnlexo ?

Thanks. Yes, if your calculation of 6 working days is correct, I was told differently by accountant. This is exactly why I have asked for complete details on the business forum. There is so much conflicting information out there and not even Thai business people can answer the questions clearly. My restaurant example was picked from an article in a big paper, which ended up not being able to answer the correct procedure and stating it will probably be all up to employer as the Gov. could not enforce this.

I hope one of the big consulting firms will be able to explain in detail or possibly post the new law in Thai or English. Thank you.

[CharlieH]

By my calculation the min salary @300b/day is 7800b per month not 9,000b, how did you come to this figure Johnlexo ?

Quite obvious how he got that figure 30 days x 300 bht a day = 9000

You have 26 days per month = 7800

Edited November 4, 2011 by CharlieH

[johnlexo]

By my calculation the min salary @300b/day is 7800b per month not 9,000b, how did you come to this figure Johnlexo ?

Thank you. Can you explain that. Would you have all details of this new labor law? Thank you. JL.

[johnlexo]

By my calculation the min salary @300b/day is 7800b per month not 9,000b, how did you come to this figure Johnlexo ?

Quite obvious how he got that figure 30 days x 300 bht a day = 9000

You have 26 days per month = 7800

Thanks Charlie.

I hope we can get some of the well known advisers to commit to some details. I have talked to several Thai Co. managers and get a different story every time. In my condo they are informing us that the lowest wage earners (cleaners etc.) will need to be paid 9000/mth., up from 6000 now and all other salaries, also the ones at or above 9000 must be adjusted by the same amount, as otherwise a cleaner would end up getting the same salary as an accountant or secretary. This would be a roughly 30% increase across the board. This could kill many small businesses indeed.

Or maybe we going to end up with tons of exceptions just like Obama-Care. So far I could not find the new laws anywhere officially presented in writing. Regards. JL.

[CharlieH]

Assuming an average month =4 weeks.

4 x 6 days worked perweek = 24 days.

7000 / 24 = 291.6 baht per day, raising it to 300 = 8.4 x 24days = 201.60 additional per month. Which is less than 3% rise.

If you then apply that same(3%) to the other positions

The assistant cook would get an additional 270 baht

Cleaner gets an additional 180 baht

The Manager an additional 420 baht.

That's IF you want to give everyone the same rise, if it'sjust the bottom end to stay "legal" then an extra 202 baht a month per head (as I see it).

Use that same 3% (rounded up) increase in operating costs to increase prices accordingly.

As I see it if you use the 4 wk / 6 day rule then at the new minimum of 300 the average minimum monthly would be 7200.

(The 26 days per month is achieved by using 365 - 52 /12 = 7800 per month)

Edited November 4, 2011 by CharlieH

[Tropicalevo]

Assuming an average month =4 weeks.

4 x 6 days worked perweek = 24 days.

7000 / 24 = 291.6 baht per day, raising it to 300 = 8.4 x 24days = 201.60 additional per month. Which is less than 3% rise.

If you then apply that same(3%) to the other positions

The assistant cook would get an additional 270 baht

Cleaner gets an additional 180 baht

The Manager an additional 420 baht.

That's IF you want to give everyone the same rise, if it'sjust the bottom end to stay "legal" then an extra 202 baht a month per head (as I see it).

Use that same 3% (rounded up) increase in operating costs to increase prices accordingly.

As I see it if you use the 4 wk / 6 day rule then at the new minimum of 300 the average minimum monthly would be 7200.

An average month is 4.333 weeks (52 weeks per year divided by 12 months per year) (All of my staff work more than 24 days per month! and they get more than 300 baht per day!)

But what a great idea by the government. A vote catching policy and it costs the government nothing. The small guys pay!

[Spoonman]

By my calculation the min salary @300b/day is 7800b per month not 9,000b, how did you come to this figure Johnlexo ?

Thank you. Can you explain that.

Max working week = 48hrs, max working day = 8hrs leaving a 6day week.

6 days x 52 weeks / 12 months = 26 work days per month @ 300b = 7800b.

Or am I missing something ?

[CharlieH]

By my calculation the min salary @300b/day is 7800b per month not 9,000b, how did you come to this figure Johnlexo ?

Thank you. Can you explain that.

Max working week = 48hrs, max working day = 8hrs leaving a 6day week.

6 days x 52 weeks / 12 months = 26 work days per month @ 300b = 7800b.

Or am I missing something ?

"Max working week = 48hrs, max working day = 8hrs leaving a 6day week".

Purely out of curiosity where does this come from ? is that stipulated somewhere ? I know department stores that work staff 12 hour days 9-9pm

Edited November 4, 2011 by CharlieH

[ajarnpot]

Hire Lao and Myanmar workers, you can pay what ever you want

[ludditeman]

Open up another 2hrs a day increase everyones working hours to cover.

No extra cost to you in the end.

[johnlexo]

Hire Lao and Myanmar workers, you can pay what ever you want

This was a hypothetical question and I am just looking for clarification. This is not about illegal immigrant / workers, nor going against the labor law of 6 days / 8 hours/week. Yes Thailand has quite strict labor laws and yes they are enforced in case of complaints. And surely they are enforced even stricter with foreign employers. Head down to Chonburi Labor Department one morning and see the crowds that are there to lodge a complaint or talk to some foreign business owners.

I am surprised we have not heard from any Pros here.

If the deal is 26 days @ 300 baht, it will have less impact than 30 days @ 300, clearly. In most countries I did business the day off was part of the deal and salaries bases and calculated on the 30 day / month rule. I am still interested to know if employers do have to or do adjust salaries of higher paid staff accordingly?

Here the basic law, in fact there is much more to it with double / triple pay for OT etc. etc.Basics of Thai LL.

Regards. J.L.

[Spoonman]

By my calculation the min salary @300b/day is 7800b per month not 9,000b, how did you come to this figure Johnlexo ?

Thank you. Can you explain that.

Max working week = 48hrs, max working day = 8hrs leaving a 6day week.

6 days x 52 weeks / 12 months = 26 work days per month @ 300b = 7800b.

Or am I missing something ?

"Max working week = 48hrs, max working day = 8hrs leaving a 6day week".

Purely out of curiosity where does this come from ? is that stipulated somewhere ? I know department stores that work staff 12 hour days 9-9pm

Labour Protection Act B.E. 2541. (1998)

[CharlieH]

"Max working week = 48hrs, max working day = 8hrs leaving a 6day week".

Purely out of curiosity where does this come from ? is that stipulated somewhere ? I know department stores that work staff 12 hour days 9-9pm

Labour Protection Act B.E. 2541. (1998)

Appreciate that, thanks

[readingbob]

My Golf Club here in Pattaya has just increased the caddy fee from Bt250to Bt300 per round , a total of 5 hours work maximum , we are told this fee has to increase due to

Government Directive , of course the caddy does not receive all of the Bt300 per round , so how do you work that one out.

Our group has already agreed that we will cut the tip by Bt40 or Bt50 in some cases.

I think if this ruling is observed across the board it will have a major impact on inflation, as the extra cost will be passed on to the customer

.

[johnlexo]

My Golf Club here in Pattaya has just increased the caddy fee from Bt250to Bt300 per round , a total of 5 hours work maximum , we are told this fee has to increase due to

Government Directive , of course the caddy does not receive all of the Bt300 per round , so how do you work that one out.

Our group has already agreed that we will cut the tip by Bt40 or Bt50 in some cases.

I think if this ruling is observed across the board it will have a major impact on inflation, as the extra cost will be passed on to the customer

.

Fully agreed and..... still we have no clarification from any of the "official" business advisers on this forum. Just talked to a Certified Thai Accountant and he repeated. A fully employed staff with a "now-salary" of 7000 Baht will have to be paid 9000 Baht from January - 30 x 300 Baht. As in most countries, the working month here has 30 days incl. the paid "days off.

So the questions remain:

1) How much will a full-time employed staff at 7000 Baht / mth. now, have to be paid from January?

2) What is the correct way (is there anything about this point in the new law?) to pay a fellow staff in that same business that has a better position and is now being paid 9000 baht / mth. from next

January?

Thanks & have a great Sunday! JL.

[Spoonman]

As in most countries, the working month here has 30 days incl. the paid "days off.

Really, most countries. Seems I have been getting under paid all my life working 5/6 day weeks.

[Tywais]

Perhaps a better way to look at it is the % change from current minimum wage based on region. This doesn't rely upon number of working days but the raw increase in salaries.

Highest current minimum wage for 2011 is Phuket at 215. So from 215 to 300 is a 39.5% increase.

Lowest current minimum wage for 2011 is Payao at 159. So from 159 to 300 is a 88.7% increase.

That is a very significant increase if it is across the board plus if overtime is required ...

Current minimum wages 2011

[johnlexo]

As in most countries, the working month here has 30 days incl. the paid "days off.

Really, most countries. Seems I have been getting under paid all my life working 5/6 day weeks.

Thanks! I guess you made the best point so far. Have a nice Sunday, JL.

[johnlexo]

As in most countries, the working month here has 30 days incl. the paid "days off.

Really, most countries. Seems I have been getting under paid all my life working 5/6 day weeks.

Thanks for posting the Labor Act. Great info and shows there are quite strict laws. Ref. 30 day per month. I am not aware of ever having paid daily wages in several European countries to my staff. They received, let us say 7000/mth. and for any extra days plus/minus it was 7000:30, not 7000: 25 working days, as days off are paid and part of the monthly salary. I still hope somebody can actually confirm this one way or the other and maybe post the law as you did with the LA. Have a nice day. JL.

[supbangkok]

Wow what a bunch of cheapskates in here! Get an accountant to do the math its just a few percent up as it goes by region and job type and etc... Its called cost of living increase kinda self explanatory. and we will all have to wait and see if it really gets fully implemented.

I am not affected as i pay way over minimum and try to keep trade as fair as possible. If everyone shared just a bit there is more than enough for all. And readigbob penalizing the caddy 40 baht because you don't like a 50 baht fee increase from the course that's just mean.

[Tywais]

its just a few percent up as it goes by region and job type and etc...

I wouldn't call 39.5% - 88.7% increase a few percent.

[Spoonman]

its just a few percent up as it goes by region and job type and etc...

I wouldn't call 39.5% - 88.7% increase a few percent.

Yeah sucks that some are now to earn $3.00 a day instead of $2.20.

[uenjoymaiself]

Costs will be passed on to the consumers, and everybody will complain about having to pay more. It's called inflation, and it's a fact of life. It was bound to happen at some point. Thailand won't be cheap forever. That said, the wage increase will affect more than just the workers whose pay must be raised to meet the minimum. It will impact entire wage structures. If you pay a new hire with a 3rd grade education 9000THB, then what do you pay the guy that has been with you for 5 years? Naturally, his pay has to increase. If his pay increases, you'll need to increase the pay of the office girl who graduated community college. If her pay increases, you'll need to bump her supervisor's pay to maintain the relative wage spread. It doesn't stop at just the minimum wage guy. You have to consider the bigger picture. For SMEs this may be a problem. As an owner, you never want to lay a significant price increase on your customers, but if margins can't be protected then it's inevitable. Going to be an interesting 6 months for Thai economists.