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What is the “Employee Welfare Fund”? Understand it before it comes into effect in 2026

What is the “Employee Welfare Fund”? Understand it before it comes into effect in 2026

Many people may be wondering what the “Employee Welfare Fund” is and where it came from. 

This article will help you understand the important principles and procedures regarding the Employee Welfare Fund that employers and employees need to know in order to be prepared before the law comes into effect. 

Origin of the Fund 

The Labor Protection Act B.E. 2541, Section 126 stipulates the establishment of the Employee Welfare Fund to assist employees experiencing economic hardship and unemployment, especially during the crisis when many employees were laid off and did not have enough savings to live on. It becomes effective as follows: 

  • According to the Royal Gazette announcement on November 15, 2024, the collection of employee and employer contribution was announced, scheduled to begin on October 1, 2025 onwards. 
  • Later, on August 26, 2025, the Cabinet resolution postponed the payment period for employee and employer contribution to the Employee Welfare Fund to October 1, 2026. 

Contribution and Savings Rates 

The Ministerial Regulation has prescribed the rates of employee and employer contribution to the Employee Welfare Fund B.E. 2567 by specifying the rate of contribution of employee and employer. are as follows: 

  • From October 1, 2025 to September 30, 2030 at the rate of 0.25 of the total wages 
  • From October 1, 2030 at the rate of 0.50 of the total wages

Where the total wages are calculated from overtime pay (OT), position pay, diligence allowance, travel expenses, food expenses, and shift pay, excluding bonuses or uncertain compensation. 

The determination of such rates is intended to ensure that employees receive stable and appropriate welfare. The Department of Labor Protection and Welfare will have measures to supervise and ensure compliance with the law and create understanding for both employers and employees about the aforementioned regulations in order to ensure correct and fair treatment for all parties. 

Fund membership criteria

Businesses that must join the fund (mandatory)  Businesses that are not required but can join (voluntary)
There are 10 or more employees and there is no employee welfare arrangement according to other laws, such as a provident fund or an internal welfare fund.  Submit the SKL.3 form to register as a member of the Employee Welfare Fund.  Deduct employee wages in the amount that must be submitted according to the SKL.3 form.  Submit contributions to the fund by the 15th of the following month. Less than 10 employees or not covered by the Act, such as agricultural work, domestic work, or non-profit organizations, businesses/fishing work, foundations, associations, etc.   Employers who arrange for employees to be members of the provident fund (in the case that employees are not members of the provident fund, the employer is required to arrange for employees to become members of the Employee Welfare Fund).  If the employee and employer agree, they can submit Form SKL. 3/1 to register as fund members.  Deduct the employee’s wages in the amount to be submitted according to Form SKL. 3. Submit contributions to the fund by the 15th of the following month.

Benefits and Penalties

Benefits to employees Benefits to employers Penalties
Raise the standards of employee protection. Show a good image of the employer. Employers who do not submit a form, do not notify of changes as required by law, or provide false information are subject to imprisonment not exceeding 6 months, a fine not exceeding Baht 10,000, or both. If the payment is not made or is not made in full, an additional fee of 5 percent per month must be paid. The labor inspector will send a letter notifying the payment of the outstanding amount within 30 days.
Promote employee savings.  Create good relationships within the organization.
Strengthen employee morale. Create motivation for employees to work with the employer for a long time.
Alleviate employee hardship and increase social security.

Requesting a refund from the fund

  • In the event that an employee leaves work in any case 
  • Employees have the right to receive their savings and contributions that the employer has sent to the fund.
  • The employer must issue a certificate of termination of employment and refund the employee within 30 days from the date of termination of employment.
  • The payment will be made as a lump sum, transferred to the employee’s bank account. 
  • In the event of an employee’s death 
  • All savings and contributions will go to the person the employee specified in the SKL.5 form. 
  • If not specified, they will go to children, spouses, fathers, and mothers in equal proportions.
  • If there is no recipient, the money will go to the Employee Welfare Fund.

From the above article, it can be seen that the Employee Welfare Fund and contributions were established as a financial resource to assist employees who may experience financial hardship, such as in the event of layoff or death. This provides increased social security and stability for employees, promotes savings discipline, and provides reserve funds or emergency funds for use upon termination of employment, which can truly alleviate hardship for employees. However, the Employee Welfare Fund’s enforcement has been postponed to October 1, 2026, giving legal entities time to prepare and thoroughly study the information and guidelines, ensuring they can operate legally when the deadline 

            Ms. Wanlee Mooprasit

Dharmniti Auditing Company Limited

References

1. Royal Decree Determining the Period for the Start of Collection of Employee Welfare Fund Contributions B.E. 2567 

2. Ministerial Regulation Determining the Rate of Employee Welfare Fund Contributions B.E. 2567 

3. Ministerial Regulation Determining the Criteria and Procedures for Providing Welfare to Employees in the Event of Employee Resignation or Death B.E. 2567

4. Regulations of the Employee Welfare Fund Committee on the Remittance of Savings, Contributions, and Additional Payments to the Employee Welfare Fund B.E. 2567 

5. Regulations of the Employee Welfare Fund Committee on Allowing Employees in Businesses Not Included in the Labor Protection Act B.E. 2541 to Apply for Membership in the Employee Welfare Fund B.E. 2567 

6. Announcement of the Department of Labor Protection and Welfare on the Form of the Letter Designating Persons Who Should Receive Money from the Employee Welfare Fund B.E. 2567 in the Event of an Employee’s Death 

7. Regulations of the Employee Welfare Fund Committee on the Criteria and Procedures for Evaluating the Savings and Contributions that Employers Must Submit to the Employee Welfare Fund B.E. 2567.