Are contractor-supplied workers our employees?

For the purposes that matter most, the law treats them as yours. Where a business engages a contractor to supply workers who perform work that is part of its production process or business, the business operator is regarded as the employer of those workers, and it must ensure they receive fair benefits and welfare without discrimination compared with its direct employees doing the same kind of work. The contractor does not disappear from the picture, but your company cannot rely on the contract to stay outside it.

Do outsourced workers have to get exactly the same pay and benefits?

The standard is fair and non-discriminatory treatment compared with direct employees doing the same kind of work. Differences need a genuine basis in the job, such as skill, responsibility or length of service — not simply the fact that the worker came through a contractor. Allowances, bonuses, meals, transport, uniforms and welfare are where differences are most often challenged.

Does this apply to cleaning and security staff?

The clearest cases are workers on the production line or in the core business. Ancillary services such as cleaning, security or catering are more often argued to fall outside, and the answer depends on how closely the work is tied to your production process. Treat the question as one to assess for each outsourced function rather than assuming either way.

What happens if the contractor stops paying its workers?

The workers can pursue your company. Where the employer is a subcontractor, the contractors above it up to the main contractor are jointly liable for wages, severance and other entitlements. In practice, a contractor that disappears or becomes insolvent turns its unpaid obligations into claims against the companies above it.

What should the outsourcing contract include?

At minimum: a warranty of compliance with labour and social security law, the right to see payroll and social security records, a mechanism for passing through the cost of equal benefits, rules for foreign workers' documents and recruitment fees, an indemnity, audit rights, and termination rights if the contractor does not comply.

Using Outsourced and Subcontracted Workers in Thailand: Equal Treatment and When Your Company Is Liable

Why this is a board-level issue, not an HR detail

Many Thai factories run a large share of their production with workers supplied by a labour contractor. It keeps headcount flexible and payroll simple. The legal position is less simple: for the purposes that matter most, the law looks through the contract to the company where the work is actually done.

That becomes visible at three moments:

A labour inspection or complaint, where outsourced workers compare their conditions with direct employees
A customer audit, such as an RBA assessment, which treats contractor workers as part of your workforce
A contractor failure, when unpaid wages and severance become claims against your company

1. Your company is treated as the employer

Where a business engages a contractor to supply workers who perform work that is part of its production process or business, the law regards the business operator as the employer of those workers. It must ensure they receive fair benefits and welfare without discrimination compared with its own employees doing the same kind of work.

Two consequences follow:

The outsourcing contract cannot move the obligation away from your company
The comparison is made against your direct employees, not against the contractor's other clients

2. What "fair and non-discriminatory" looks like in practice

The rule does not require every term to be identical. It requires that differences have a genuine basis in the job. In practice, disputes concentrate on:

Item	Common problem
Allowances	Shift, skill or attendance allowances paid only to direct staff
Bonuses	Annual bonus excluded for contractor workers on the same line
Welfare	Meals, transport, uniforms, dormitories or medical care provided unequally
Leave and holidays	Different leave treatment for the same work pattern
Overtime	Contractor workers carrying the overtime that direct staff decline

Differences that can be justified usually relate to skill, responsibility or length of service. "They are outsourced" is not a justification.

3. Which work is covered

The clearest cases are workers on the production line or in the core activity of the business. Ancillary services — cleaning, security, catering, landscaping — are more often argued to fall outside, depending on how closely the work is tied to the production process.

Make the assessment function by function, and record why each function is treated as it is.

4. Liability up the contracting chain

Separately, where the employer is a subcontractor, the contractors above it up to the main contractor are jointly liable with it for wages, severance and other entitlements.

For a company that appoints a main contractor who then subcontracts labour, this chain matters. Ask who actually employs the people on your site, and how many layers sit between them and you.

5. When the contractor fails

The scenario that turns outsourcing into litigation is predictable: the contractor falls behind on wages or social security contributions, then stops operating. The workers — who have been working on your line for months or years — pursue the companies that can pay.

Warning signs worth acting on:

Late wage payments or complaints from contractor workers
Social security contributions not reconciled with headcount
Frequent changes of the contractor's legal entity
A contractor price that cannot cover lawful wages and benefits

6. Foreign workers supplied through agencies

Where contractor workers are migrant workers, add these checks:

Recruitment fees paid by workers, including in the country of origin — see what RBA expects from suppliers
Identity documents held by the agency or contractor
Work permits that match the actual employer and work
Contracts in a language the workers understand

7. What the outsourcing contract should say

Compliance warranty with labour, social security and foreign worker law
Record access — payroll, time records, social security filings — on request
Equal-benefit mechanism — how the cost of fair benefits is passed through and priced
Foreign worker rules — no worker-paid recruitment fees, no retention of documents
Audit rights, including worker interviews
Indemnity for claims arising from the contractor's non-compliance
Termination rights for non-compliance, with an orderly handover of workers

A quick self-audit

List every outsourced function and the number of workers in each
Compare pay, allowances, bonus and welfare with direct staff doing the same work
Check the last three months of contractor payroll and social security reconciliations
Map the contracting chain to the actual employer of each group
Review the contract against the seven points above

For a wider employer review, see the Thai labour compliance audit. If a claim has already been filed, see defending an employer in the Labour Court.