The House committee on economic development says it is backing a Federation of Thai Industries (FTI) call for the government to pay for some of the minimum wage hike itself.
The committee says a government subsidy is necessary to help small and medium-sized enterprises (SMEs) cope with the nationwide minimum wage hike, which took effect on Jan 1.
Chanin Rungsaeng, chairman of the House panel, said several relief measures rolled out by the government including a corporate tax reduction were ineffective.
He said the committee will push for the government to accept the FTI proposal.
The government has yet to respond to the federation's call, he said. The FTI proposal calls for a government subsidy spread over three years starting this year.
It wants the government to subsidise 75% of the wage hike margin this year, 50% next year and 25% in 2015. It would cost the government 143 billion baht.
"The government is sitting on the proposal despite it being the right approach to address the problem. The wage increase will result in massive lay-offs and deal a serious blow to the country's competitiveness," Mr Chanin said.
Labour permanent secretary Somkiat Chayasriwong downplayed recent reports that between 5,000-8,000 workers have been laid off as a result of the wage increase.
Mr Somkiat said the number of lay-offs was not "irregular".
He said one report put the number of laid-off workers at 1,000 as of Jan 15. Of this, 435 were affected by the wage increase.
"Based on the figure, there's nothing unusual. But the estimate may be a bit lower than the actual figure," he admitted.
Mr Somkiat said production efficiency increased after minimum wages were raised to 300 baht on a trial basis last April in seven provinces with large industries.