No plan for Bt50 billion wage fund: Padermchai

The Finance Ministry refused to set up the Bt50 billion fund, to ease the minimum wage hike impact on small and medium-sized enterprises.

Referring to the discussion with Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong today, Industry Minister Padermchai Sasomsap said that the Kittiratt insisted that the fund is not a plausible option given its size.

Padermchai added that aside from 11 measures imposed earlier, the Finance Ministry will instead plot new relief tax measures including a cut in the witholding tax for SMEs from 3 per cent to 2 per cent.

He also insisted that it is too early to pinpoint the negative impact of minimum wage hike on employment.

Referring to news reports that many factories have shut down shops, he said that these factories have suffered from accumulated losses and declining orders from overseas buyers. Some also chose to close businesses in December, as lay-off compensation, based on the old minimum wages, would be lower. Others decided to hang on but in this month decided to close business, on rising costs.

"It’s too soon to talk about the impacts of the minimum wage hike in 70 provinces. The impacts should become clearer in the middle of March," he said.

Next week, he schedules a discussion with five labour departments, to plan the monitoring as well as set relief measures. Updates on the labour situation would be submitted to the ministry.

Failing to comply with the wage law, companies are subjected to 6-month imprisonment and fine of Bt100,000, or both.

"On concern that some companies may have workers do jobs at home in return for Bt300 wage to avoid paying overtime charges, this must be agreed upon by the employees. I can say here that from discussion with large companies, they have no plan to do so. And 80 per cent of them are more concerned about raw materials prices and overseas orders than about wage," he said.