Employee Welfare Fund (EWF): Key Issues for Employers Before 1 October 2026

Introduction

After years of delay, the Employee Welfare Fund (“EWF“) is scheduled to take effect on 1 October 2026, introducing a new statutory contribution requirement for employers with 10 or more employees. While the EWF is intended to provide financial protection for employees upon termination of employment, many employers assume that existing employee benefit arrangements, particularly provident funds (“PVDs“), will automatically exempt them from the new regime. In practice, however, the scope of the available exemptions is more limited than it may appear. Employers should therefore review their current employment and benefit structures well before the implementation date to identify potential EWF obligations, assess exemption eligibility, and ensure compliance with the Labour Protection Act (“LPA“).

This Update highlights several key issues that employers should consider before the EWF comes into force.

Preparing for the New Employer Contribution Requirements 

Starting on 1 October 2026, employers with 10 or more employees will be required to contribute to the EWF, unless a statutory exemption applies.

Under the new EWF framework, the contributions to be made will be as follows:

1. 1 October 2026 – 30 September 2031: employer and employee contributions of 25% each of the employee’s wages.

2. From 1 October 2031 onwards: employer and employee contributions increase to 5% each of the employee’s wages.

As the implementation date approaches, employers should review their existing benefit structures to assess whether they qualify for an exemption and ensure compliance with the LPA. 

PVD Does not Always Eliminate EWF Obligations 

One of the key exemptions from EWF participation applies where employees are members of a PVD. However, employers should be aware that the exemption is linked to actual PVD membership, not merely the availability of a PVD.

A common issue arises when employees can join the PVD only after completing probation. During the probation period, employees who are not yet eligible to participate in the PVD are generally required to be enrolled in the EWF. Therefore, a PVD structure that permits participation only after probation does not provide a complete exemption from EWF requirements.

Similarly, employees who are eligible to join the PVD but choose not to participate, or who later withdraw from the PVD, will generally need to participate in the EWF instead. 

Should Employers Allow PVD Participation from Day One? 

To reduce administrative complexity, employers may consider allowing employees to join the PVD from their first day of employment. This approach may avoid the need to enrol probationary employees in the EWF and subsequently transfer them to the PVD once they become eligible.

Where PVD participation is postponed until after probation, employers must administer both systems concurrently, which may create additional administrative burdens.

Can Employers Make Participation in the PVD Mandatory?

Employers cannot make participation in the PVD mandatory. Under the Provident Fund Act, participation in a PVD remains voluntary. Employers are not permitted to mandate membership in a PVD through company policy or contractual arrangements.

In practice, however, employers may encourage participation by communicating the benefits of the PVD and helping employees understand the differences between PVD and EWF participation. 

EWF Applicability to Expatriate Employees

The EWF regime generally applies to both Thai and foreign employees. Whether an expatriate is subject to the EWF depends on the nature of the employment relationship rather than the employee’s nationality.

Where a Thai entity hires, supervises, and pays an expatriate employee, that individual will generally be treated as an employee of the Thai entity and may be required to participate in the EWF, unless an exemption applies.

For expatriates seconded from a foreign parent company, relevant factors in determining whether the EWF applies include:

1. whether the Thai entity exercises managerial control over the individual; and
2. whether the Thai entity pays all or part of the individual’s remuneration.

Importantly, participation in overseas pension, retirement, or social security schemes does not automatically exempt expatriates from EWF requirements.

Practical Impact on Employers

Companies may not qualify for a full EWF exemption if:

1. PVD participation starts only after probation;
2. PVD participation is voluntary, and some employees choose not to join; or
3. Expatriate employees are excluded from the PVD without considering whether they are employees of the Thai entity for labour law purposes.

Employers should therefore review their current benefit and employment structures before the EWF takes effect.

Concluding Words

The EWF will take effect on 1 October 2026 and may create compliance obligations for employers with 10 or more employees. As the exemption is not automatic, employers should review their PVD arrangements, employee participation rates, and expatriate employment structures to assess potential EWF exposure. We would be pleased to assist in reviewing your current structure and identifying available exemptions and practical compliance solutions.

For regional Employment matters, please see Rajah & Tann Asia’s Employment Practice for more information.

Contribution Note

This Legal Update is contributed by the listed Contact Partner, with the assistance of Senior Associate Thamolwan Cheewakriengkrai and Associate Pailin Taitorphon.