Can Companies Require Salary Cuts of 30-50% When Imposing WFH? Understanding Employee Rights to Avoid Disadvantage

"As long as you still have a job, be grateful and keep working." It is common to hear such phrases.

Everywhere you turn, you often hear this because news of layoffs has occurred at companies both large and small, in Thailand and worldwide. Given the current economic climate, those who lose jobs may remain unemployed for a considerable time as companies are not hiring. This atmosphere heightens employees' concerns about how long they will keep their jobs.

Even those who still have jobs sometimes face bad news—for example, companies changing work formats but requesting salary reductions. Some small firms take advantage of the situation by allowing 100% Work From Home (WFH) but demand salary cuts of 30-50%. When faced with this, what can employees do to avoid being disadvantaged? Thairath Money has checked official information and summarized it here.

Is it permissible for companies to mandate WFH and reduce salaries?

Thairath Money consulted the Department of Labour Protection and Welfare. The answer: if a company orders 100% WFH but reduces salaries, it cannot decide this unilaterally.

According to labor protection law, employers may change employment conditions only if the changes benefit employees, such as increasing benefits. However, if the changes are detrimental to employees, employers cannot impose them unilaterally; employee consent is required. This applies equally to regular and daily-wage employees.

For example, reducing previously granted benefits (such as transportation allowances, attendance bonuses), demotions, salary cuts, and so on are not allowed by law.

There are various cases where companies cannot deduct employees' wages, such as:

• Arriving late to work, Employers cannot deduct fines on an hourly basis (some companies may apply a 'No work, No pay' principle, but this must be clearly stated in the employment contract in advance).
• Employees deliberately causing damage to the company, Salaries cannot be reduced (although the company may claim damages or terminate employment without severance pay).

Nevertheless, the law allows for agreements. If employees consent in writing to conditions such as salary reductions, the company may proceed fully.

Therefore, if a company presents new terms for signature, employees should read thoroughly and understand before agreeing.

What should employees do if the conditions are unfair?

Many believe they must sign whatever the company presents, but to fully protect their rights, employees should carefully review the new terms. If unclear or doubtful, they should prepare all documents and seek advice from the Department of Labour Protection and Welfare via phone at 1546 or the Ministry of Labour hotline 1506, option 3.

After gathering complete information, employees can decide accordingly. If exploited, they can file complaints with authorities, following two steps:

• Collect evidence, Keep employment contracts, pay slips, and communications (emails, chats) specifying salary deductions or cuts.
• File a complaint with the labour inspector. Submit evidence and a petition to the local Labour Protection and Welfare Office. Usually, cases proceed to mediation rather than court, possibly resulting in reimbursement of deducted amounts or restoration of original rights.

Additionally, employees should know other rights, such as receiving severance pay if terminated without fault and without prior notice as legally required. This pay compensates for lack of notice and is separate from standard severance based on tenure.
Further details on severance pay for dismissal can be readhere.

ReferencesMinistry of Labour,Royal Gazette

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