Thailand’s restaurant industry is raising concerns about higher operating costs as the Employee Welfare Fund is set to begin collecting contributions from employers and employees on Oct 1.
Restaurant associations have reported mixed reactions to the new scheme. While some operators support the fund because it will provide additional financial protection for workers, others are concerned about the extra costs at a time when businesses are already facing economic pressures.
The Employee Welfare Fund was established to provide financial assistance to employees in cases such as termination of employment or death. Employers with at least 10 employees will generally be required to participate, although businesses with qualifying provident funds or other approved employee support arrangements may be exempt.
During the initial five-year period, both employers and employees will contribute 0.25% of wages each month. The contribution rate is scheduled to rise to 0.5% for both sides from October 2031.
Restaurant operators say the additional payments could put pressure on businesses that employ large numbers of workers, particularly full-service restaurants and other labour-intensive operations.
Thanawin Lokmongkol, president of the Thai Restaurant Association, said some members had only recently become aware of the mandatory contributions. He said operators were already dealing with expenses including taxes and social security contributions and were concerned about their cash flow.
The association has called for the government to consider delaying implementation, arguing that restaurants continue to face difficult trading conditions.
Another restaurant industry group said many of its members were still unfamiliar with the new requirements and would need more information before the scheme takes effect.
However, the Restaurant Association’s president Chanoket Nonhchan said the measure could provide useful benefits for employees, even though it would increase costs for restaurants with large numbers of full-time staff.
The introduction of the fund comes as businesses across Thailand continue to manage higher labour and operating expenses. For restaurants, where staffing represents a significant portion of overall costs, even relatively small increases in employment-related expenses can affect profitability and cash flow.
The scheme was originally scheduled to begin earlier but was postponed for a year amid economic uncertainty. The government subsequently set Oct 1, 2026 as the start date for mandatory contributions.
Restaurants and other affected businesses are now preparing for the new system, while industry groups continue to seek clarification and discuss the financial impact with authorities.
The coming months will show how businesses adjust to the additional employment costs while employees begin building up savings through the new welfare fund.
Leave a Reply