Labour Minister Phiphat Ratchakitprakarn insists on increasing the daily wage to 400 baht nationwide on Oct 1 despite concerns that the rise will harm businesses.
Mr Phiphat on Sunday said that following discussions with business operators and a study by a subcommittee set up by the Ministry of Labour, the ministry confirmed that a nationwide minimum wage increase to 400 baht will take effect on Oct 1 as planned.
"We know the economy is slowing down. Therefore, I have told the permanent secretary of Labour [Phairoj Chotikasatien] to consider the issue with the most analytical information," he said.
A study conducted with the Social Security Office (SSO) found that when the ministry announces a minimum wage of 400 baht, the wage hike policy should apply to companies or factories with at least 200 workers.
"This is a summary that we will have to discuss with the National Economic and Social Development Board and also the Ministry of Finance," the minister said.
He said the SSO will adopt measures to compensate businesses with over 200 employees by providing them with a 1% discount on their contributions to the Social Security Fund (SSF) starting next month until September next year.
Mr Phiphat said small- and medium-sized enterprises (SMEs) with less than 200 employees will not be required to increase wages. However, he emphasised the need to support these smaller companies, which employ over 90% of the country's workforce, until the economy revives.
He said he is confident the new government led by Prime Minister Paetongtarn Shinawatra, whom he said is a new-generation leader, will be capable of boosting the economy.
The minister also disclosed that the Labour Ministry will ask the Finance Ministry to reuse a compensatory measure imposed in 2012 when then-Prime Minister Yingluck Shinawatra announced the increase in the minimum wage to 300 baht.
In addition, Mr Phiphat disclosed the possibility of asking for cooperation from financial institutes to provide low-interest credit to companies to help maintain their businesses' liquidity and cash flow after the pay rise comes into effect.
Moreover, he said there will be a measure to offer tax discounts for companies that provide career training to workers.
Meanwhile, Sanga Ruangwattanakul, president of the Khao San Road Business Association, said he is concerned about the pay rise as it will have both direct and indirect effects, such as a slowdown in employment, layoffs and higher costs.
Mr Sanga asked the government to support the private sector by providing them with tax discounts and exemptions until the economy bounces back.
"I want the government to rethink and find a way to increase the people's income and allow them to survive. Handing out cash is not a sustainable solution," said Mr Sanga. "The government should replace that with creating jobs and developing workers' skills."