Thailand is moving forward with a major update to its labor protection framework by launching the Employee Welfare Fund (EWF) on 1 October 2025. Designed to strengthen employee financial security, the EWF will require eligible employers to make monthly contributions, offering employees a form of income protection in the event of resignation, retirement, redundancy without severance pay, or death.
This new policy is expected to have a significant impact on both local and foreign companies operating in Thailand, especially those with growing workforces. For employers, understanding the requirements and preparing early will be key to staying compliant and avoiding penalties.
The purpose of the Employee Welfare Fund
The EWF was introduced under Thailand’s Labor Protection Act B.E. 2541 (1998) and is administered by the Department of Labor Protection and Welfare. The fund’s objective is to provide financial assistance to employees who leave employment under specific circumstances, such as voluntary resignation, retirement, termination without compensation, or death. Rather than replacing existing employee benefits like severance pay or provident funds, the EWF acts as a complementary safety net, especially for workers who do not currently benefit from a corporate retirement scheme.
Who must join the fund?
From October 2025 onward, all private-sector employers with 10 or more employees must register with the EWF and begin contributing on behalf of their staff. However, the law makes an important distinction: if an employer already provides an equivalent or more favorable benefit scheme, such as a registered provident fund for all employees, they may be exempt from participating in the EWF.
This exemption may also apply to companies that provide comparable financial support through verifiable mechanisms, such as employee-designated bank accounts or other recognized retirement schemes.
How contributions will work
To fund the EWF, employers and employees must each contribute a portion of the employee’s monthly wages. Between 1 October 2025 and 30 September 2030, both parties will contribute 0.25% of the employee’s monthly wages. After this transitional period, beginning 1 October 2030, the contribution rate will rise to 0.5% each.
The amount of financial support employees are entitled to will be based on the length of time they have contributed to the fund, and calculated according to a government-regulated scale. The benefit is paid out as a one-time lump sum and may be combined with other statutory or company-provided compensation.
Administration and claims
The EWF will be managed by a board made up of representatives from the Ministry of Labor, the Ministry of Finance, the Bank of Thailand, and stakeholder groups representing both employers and employees. This multi-stakeholder oversight is designed to ensure transparency, accountability, and fair administration of funds.
The calculation and the deduction will be made at source, directly from the employee’s salary:
- All companies will have to make the declaration SorKorLor.3 form addressed to the relevant Office of Labor Protection and Welfare.
- The employer will make the payment directly to the EWF, together with the taxes related to the employee.
- The receipt of this submission will be notified with the SorKorLor Certificate 4.
Employee rights
Under the new EWF, the employee will be entitled to have the following rights
- The benefit is payable in cases of voluntary resignation, retirement, redundancy without severance, or death.
- The compensation amount is calculated based on the duration of contributions and the official regulatory scale.
- This allowance may be combined with other statutory or company-agreed compensation.
Employees seeking to claim benefits from the EWF will need to submit a formal request to the Bureau of Labor Protection and Welfare. Once approved, the payment will be made as a one-off allowance, based on the duration and amount of their contributions.
Penalties for non-compliance
Employers who do not comply with EWF regulations may face several penalties. These include a monthly surcharge of 5% on overdue contributions, fines of up to THB 10,000, imprisonment of up to six months, and even a direct liability of the directors of the company for severe or continued non-compliance. With such clear enforcement measures in place, it is vital that companies act quickly to align their HR and payroll processes with the new legal obligations.
What should employers do?
With the implementation deadline approaching, companies should begin evaluating their existing employee benefit programs to determine whether they qualify for exemption. Those who are not exempt should ensure that their payroll systems are capable of managing the upcoming contribution calculations and reporting requirements.
It is also recommended to communicate proactively with employees about the EWF, explaining its purpose, how it works, and what kind of support it offers, so that workers are fully informed and engaged with the new initiative.
Finally, employers should consult with legal, tax, or HR advisors who are familiar with Thai labor regulations to ensure full compliance with all aspects of the fund.
Conclusion
Thailand’s Employee Welfare Fund represents a major advancement in the country’s labor policies, providing a financial cushion for employees facing uncertain transitions. For employers, compliance is not only a legal requirement but also an opportunity to demonstrate commitment to employee well-being. By taking action today, businesses can avoid penalties, ensure smooth implementation, and build stronger trust with their workforce, while staying ahead of labor policy developments in the region. Please contact us for support or a personalized consultation.
