How Far Can an Employer Demand a Security Deposit or Guarantor in Thailand? Roles Handling Cash and Company Property

The core answer

Thai law neither bans every deposit nor allows one for every job. The rule is a prohibition in section 10 of the Labour Protection Act, with a narrow exception for work in which the employee is responsible for the employer's money or property and could cause damage, such as receiving and paying cash or controlling stock. Which jobs qualify, which forms of guarantee are allowed and how much may be taken are set by the Ministry of Labour notification on the criteria and methods for demanding or accepting work guarantees, B.E. 2551 (2008). The notification lists the eligible jobs by type: chief accountant work, cash collecting or paying, controlling valuables, guarding the employer's premises or property, debt collection, controlling vehicles, and warehouse work only for employees who control the money or property concerned.

Once a guarantee is lawfully taken, the employer has duties: keep it properly, return it within seven days of the employee leaving, and deduct for damage only if the loss is proven, the employee consented in writing, and the deduction stays within section 76. A personal guarantor has protections of their own in the Civil and Commercial Code, so the contract cannot be drafted harsher than the law allows.

1. What do the rule and exception in section 10 say?

Section 10 first paragraph prohibits an employer from demanding or accepting a guarantee for work or against damage from an employee, whether money, other property or a personal guarantor, unless the nature or condition of the work makes the employee responsible for the employer's finances or property, so that damage could result.

The exception turns on the nature of the work, not on the employer wanting comfort. Using a laptop or office equipment does not make a role "custody of property". A job title is not decisive either: look at whether the real duties involve receiving, holding or controlling money or valuables.

The notification issued under section 10 deals with three things: which work may attract a guarantee, the types and value of guarantee, and how it is kept. A clause in the employment contract or company rules does not legitimise a demand that breaches section 10.

An employer who breaches section 10 or section 76 faces section 144 (1): imprisonment up to six months, a fine up to 100,000 baht, or both.

2. Which positions may be required to give a guarantee, and which should not?

This table is a screening guide based on the section 10 test. It does not replace the notification; the final call must be made against the notification and the person's actual duties.

Note that one person may be on either side at different times, for example a shop assistant who becomes a cashier. Take the guarantee when the cash duty starts, and return it when the person moves back to work with no cash duty.

3. In what forms, and with what limits?

Section 10 names three kinds: money, other property and a personal guarantor. In practice:

• Cash. Keep it separate and give a receipt. Do not mix an employee's deposit with the company's working capital.
• Other property, such as a bank savings book. The notification deals with safekeeping.
• Bank guarantee. An alternative to cash for the employee. Agree clearly who bears fees. The total value stays within the same cap.
• Personal guarantor. Allowed for work within the exception, but the guarantor's exposure counts towards the cap together with other guarantees, and the guarantor has Civil and Commercial Code protections (see section 6).

The cap in the notification is 60 times the employee's average daily wage, counted across all forms together. If the employer holds cash and also asks for a guarantor so that the total exceeds the cap, the excess cannot be demanded.

Hypothetical example

A shop cashier's average daily wage is 600 baht (hypothetical figure). The cap is 600 x 60 = 36,000 baht. If the company holds 20,000 baht in cash, no more than 16,000 baht in other guarantees can be asked. Having the employee's sister sign a 100,000 baht guarantee and also holding 20,000 baht cash exceeds the cap on both counts.

4. What should the guarantee agreement contain?

Always in writing. At minimum:

1. The position and duties that bring it within the exception, naming the money or property.
2. The type and amount, with the 60-times calculation shown.
3. How it is kept, for example a separate bank account per employee, with the employee told where.
4. When the employer may apply it to loss, and how loss will be proved.
5. When it is returned and any interest, matching the seven days in section 10.
6. A receipt for every sum or document received.

For a personal guarantor, section 680 of the Civil and Commercial Code requires written evidence signed by the guarantor; without it the guarantee cannot be enforced in court.

5. When must the guarantee be returned, and with what interest?

Section 10 last paragraph: when the employer dismisses the employee, or the employee resigns, or the guarantee contract expires, the employer returns the guarantee with interest, if any, within seven days from that date.

If it is late, section 9 imposes default interest at 15 percent per year. If the employer wilfully fails to return without reasonable cause, a surcharge of 15 percent of the unpaid sum applies for every seven-day period after the first seven days past the due date. If the employer is ready to pay and deposits the money with the Director-General or a designee for payment to the employee, interest and surcharge stop from the day of deposit.

A common situation: the employee leaves suddenly and the stock has not been counted. Section 10 has no exception allowing the employer to hold on while checking. The safer route is to count before the last day, or use a written section 76 (4) agreement with a consenting employee. If you cannot yet prove the loss, return the guarantee and pursue the claim separately.

6. How does the Civil and Commercial Code protect a guarantor?

A guarantor is an outsider who undertakes to the employer to pay the employee's debt if the employee does not (section 680). The law protects them at several points:

• No joint-debtor clause. Section 681/1 makes void any agreement that makes the guarantor liable as a joint debtor. The exception is a juristic person that voluntarily agrees; a friend or relative signing for an employee is not in that position.
• Notice. Section 686: when the debtor defaults, the creditor must send written notice to the guarantor within 60 days. If not, the guarantor is released from interest, damages and ancillary charges arising after the 60 days, but stays liable for the principal.
• Contrary terms. Section 685/1 makes void guarantee terms that depart from the listed provisions, namely section 681 paragraphs 1 to 3 and sections 686, 694, 698 and 699. A clause saying "the guarantor waives notice" is therefore void.
• Reductions. Under section 691, if the creditor agrees a reduction of the guaranteed debt with the debtor, written notice must go to the guarantor within 60 days, and the guarantor is released once payment is made as that section provides.

Practical result: state the amount and the duties covered (for a future debt, section 681 also requires the purpose of the debt, its nature, the maximum amount and the period), never take a blank cheque, never write "everything, forever", and have a process to send the 60-day notice when an employee defaults on a genuine loss.

7. How far may damages be deducted from wages?

Section 76 prohibits deductions from wages, overtime pay, holiday pay and holiday overtime pay except for listed purposes. Item (4) is the relevant one: deduction as the section 10 guarantee, or to compensate the employer for damage the employee caused wilfully or by gross negligence, with the employee's consent.

All of the following must hold:

1. A cause. The damage comes from wilful or grossly negligent conduct. An ordinary mistake does not qualify.
2. Consent. Under section 77 the employer must put it in writing, signed by the employee, clearly and specifically. A general line in the first employment contract that names no event is risky.
3. Within the cap. For items (2), (3), (4) and (5), each deduction may not exceed 10 percent, and together they may not exceed one fifth of the money the employee is entitled to for that pay period, unless the employee consents.

Keep two routes apart. A lawfully held deposit may be applied to proven loss under the guarantee agreement. A wage deduction must pass sections 76 and 77. Neither lets the employer recover more than the actual loss. Anything over the cap, or without consent, is a debt to be claimed in the ordinary way.

Dismissal for dishonesty or a criminal complaint is a separate path: see the guide on investigating employee fraud and employee dismissal rights.

8. How do you prove the loss?

Both applying a deposit and deducting wages need evidence of how much was lost, why, and that this employee caused it.

• Signed handover sheets: the cash or stock received at the start of the shift or job and returned at the end.
• Stock-count reports done with the employee and a second checker, signed by both. If the employee refuses to sign, record why and who witnessed.
• Cash reconciliation: daily sales report against the drawer, POS and bank deposit slips.
• CCTV: usable as support, but it must fit the employer's personal-data policy. See PDPA and employee data.
• A chance to respond: give the employee the count result and a written opportunity to dispute before deciding to deduct.
• Shared access: if several people use the same drawer or store with no named custodian, the person responsible is hard to identify. Separate user codes and shifts.

Natural shrinkage, spoilage and small change errors are not wilful or grossly negligent damage. An employer that sets and records an acceptable loss rate has an easier time explaining a dispute.

9. What internal process should a company set up?

1. List the positions that truly handle money or property, with reasons, checked against the notification. Positions outside it get no guarantee.
2. Write a policy covering type, amount, safekeeping and return.
3. Sign a guarantee agreement in writing, three copies (employer, employee, guarantor if any), the guarantor signing personally.
4. Issue receipts for each sum or document.
5. Open a separate account so employee deposits are not mixed with company money, and tell the employee where.
6. Count and reconcile regularly and keep records of every round.
7. Set a return calendar: a seven-day reminder when anyone leaves.
8. Close with a return or settlement memo, signed by the employee, with the loss evidence attached for any deduction.

10. What are the common mistakes?

• Demanding deposits from all staff, including people who do not hold money or goods. This risks section 144 (1) and the deposit must be returned.
• Not checking the cap: cash plus guarantor above 60 times average daily wage.
• Holding the deposit without proof of loss and missing the seven days because of "checking" that never happens. Interest of 15 percent per year, and possibly the section 9 surcharge, follow.
• Deducting above the limits or without written consent, in breach of sections 76 and 77.
• A blank cheque from the guarantor, or unlimited liability with a waiver of notice.
• No notice to the guarantor within 60 days of default, so the guarantor escapes interest and charges after that.
• Mixing the deposit with company funds with no record of where it is.
• Reusing an old contract that was never checked against the current notification.

11. Checklist for employers

• The role genuinely involves the employer's money or property and falls within the notification
• The 60-times average daily wage cap is calculated across all forms of guarantee
• A written agreement is signed, the guarantor signs personally, and the amount and duties covered are stated
• A receipt is issued each time
• The deposit sits in a separate account and the employee has been told
• Handover sheets, counts and cash reconciliations are done on schedule and recorded
• Consent to deduct is written, specific and signed; each deduction is within 10 percent and the total within one fifth unless the employee consents
• A seven-day return reminder is set
• A 60-day reminder is set for notice to the guarantor after default
• Existing guarantee agreements have been reviewed against the current notification

Further reading

• Training bonds and repayment on resignation — why training costs cannot simply be deducted from pay
• Investigating employee fraud or embezzlement — when the loss comes from dishonesty
• Employee dismissal rights — dismissal and compensation linked to guarantee return
• Reducing wages, working days or benefits — changes that need the employee's consent
• PDPA and employee data — using CCTV and staff data as evidence

An employer may take a guarantee only for work that truly involves responsibility for its money or property, up to 60 times average daily wage, must keep it properly and return it within seven days, and may deduct for damage only when the loss is proven and the employee has consented in writing under sections 76 and 77.

We help identify which positions may carry a guarantee, draft guarantee and suretyship agreements, set up the receiving, keeping, returning and deduction process, and assemble the evidence of loss. For an initial consultation, call +66 92 254 2045 or send us the details. See also HR documents and employee investigations.

This guide is published by Suwanvara Law Firm — a Khon Kaen law firm established in 1986. General information only, not legal advice on a specific matter.