Nod for 40% nationwide wage hike

The Central Wage Committee yesterday approved a 40-per-cent hike in the daily minimum wage across the country.
The pay rise, however, will take effect not from January 1 but from April 1 because of the flood crisis.
Speaking in his capacity as the chairman of the Central Wage Committee, Labour Ministry permanent secretary Dr Somkiat Chayasriwong disclosed that the committee’s members unanimously agreed to the 40-per-cent increase and that a vote was not deemed necessary.
Earlier, many employers were reluctant to embrace the big hike, but Somkiat hinted at the possibility of calling a vote. Given that the tripartite committee comprises representatives from the government and workers, however, it was apparent that the representatives of employers would not have been able to win such a vote if it were called.
In addition, the government has now offered many measures to help employers cope with the significant increase in the daily wage.
With the 40-per-cent increase, the minimum wage in Bangkok, Phuket, Samut Prakan, Samut Sakhon, Pathum Thani, Nakhon Pathom and Nonthaburi is going to soar to Bt300 a day. “As for workers in other provinces, their daily minimum wage will rise by 40 per cent from April 1 next year and rise to Bt300 before the end of 2013,” Somkiat said.
The Labour Ministry has been pushing hard for the Bt300 daily minimum wage because it is one of the major election policies pledged by the Pheu Thai Party.
Somkiat said that if the country’s economy improved, the government would try to ensure that workers across the country get at least Bt300 a day ahead of the above schedule.
He was speaking after the Central Wage Committee’s meeting, which lasted more than an hour.
During the meeting, Fiscal Policy Office director Somchai Sajjapong said the Finance Ministry had approved many measures to cushion the wage-hike impacts on employers. For example, the corporate income tax will be reduced from 30 per cent to just 23 per cent in 2012 and to 20 per cent in 2013.
Moreover, for small and medium-sized enterprises with registered capital of not over Bt5 million and annual income of no more than Bt30 million, their expenditure on the additional wages could be 1.5 times what they actually report on tax forms.
Representatives of employers have also asked that the value-added tax (VAT) be reduced from 7 to 3 per cent.
“The Finance Ministry has agreed to consider it, but we have not yet concluded the issue,” Somkiat said.
He added that he planned to ask the Social Security Office (SSO) board to consider a proposal to lower contributions to the Social Security Fund and extend the contribution-collection deadline.
“We will present it to the SSO board on October 25,” he said.
Somkiat expects the conclusions on what measures would be taken to assist employers to ease the 40-per-cent wage hike would come out in the next few weeks.
Labour leaders agreed to drop demands for an immediate nationwide rise in the minimum wage to Bt300 because of the floods, Thai Labour Solidarity president Chalee Loysoong said. The group, which has about 280,000 members, may oppose the provision to freeze wages until 2015 if inflation accelerates, he said.
The increase in wages in seven provinces to Bt300 a day first is acceptable, Chalee said, adding that his group understood that employers had suffered from the floods.