Reducing Worker Exploitation in Time-Limited, Low-Wage Visa Schemes: Lessons from South Korea and Thailand

Abstract

South Korea and Thailand are two of the seven biggest destination countries for low-wage migrant labour in East and Southeast Asia. They face similar demographic patterns and labour market dynamics but are very different when it comes to their economic, political and geographical contexts. Despite these differences, they have pursued a similar approach to the regulation of low-wage labour migration by taking a more active role in managing the recruitment and stay of migrant workers. As a result, outcomes for low-wage migrant workers in both countries are better than those experienced by their counterparts elsewhere in Asia. This analysis of the low-wage visa schemes in South Korea and Thailand contributes to a more robust understanding of how these restrictive labour migration regimes can be structured to improve outcomes for workers. The paper argues that lessons learned from the regulatory approaches pursued in South Korea and Thailand should be applied in other destination countries in Asia and beyond.

1. INTRODUCTION

Time-limited, low-wage visa schemes, also called ‘tied visa’ regimes,¹ are growing in popularity as a policy tool. Governments in destination countries use them to respond to perceived labour shortages, especially in ‘dirty, dangerous and demeaning’ jobs, without raising wages or creating pathways to permanent settlement. Over 50 destination countries have opened time-limited legal pathways for low-wage migrant workers,² and it is estimated that one-third or more of the world’s 169 million migrant workers are employed through them.³ East and Southeast Asia contain some of the world’s largest migration corridors for low-wage labour migration primarily driven by wage inequality.⁴ The seven main destination countries and territories in East and Southeast Asia (Singapore, Malaysia, Thailand, Hong Kong, Taiwan, South Korea and Japan) employ approximately 7.5 million documented low-wage migrant workers.⁵

Given prevailing economic and demographic trends, the number and size of these labour migration flows are expected to grow. As such, protecting low-wage migrant workers’ rights and improving the outcomes they experience will continue to be a pressing concern. At the same time, ‘a dearth of data on … guestworker programs’ is hindering ‘the ability of policymakers to make informed decisions’ about them.⁶ This study of two of the biggest low-wage labour migration regimes in Asia—South Korea and Thailand—contributes to a more robust understanding of how these restrictive migration regimes are regulated and the impact of different regulatory approaches on outcomes for migrant workers.

Much has been written about the adoption, abandonment and then re-emergence of low-wage labour migration regimes in Europe, North America and Australia.⁷ These regimes and their counterparts in West Asia have been praised by some for creating ‘triple wins’ for destination countries, countries of origin and migrant workers,⁸ but have more often been criticised for creating a class of precarious, disempowered and exploitable workers.⁹ These dynamics can also be observed in contemporary low-wage labour migration regimes in Asia. These regimes have focussed on enforcing the time-limited or circular nature of these migration flows in part due to the perception that previous schemes in the US and Germany led to many ‘temporary’ workers becoming undocumented or gaining permanent residence.¹⁰ While some empirical and comparative studies in the region have been undertaken, ¹¹ these regimes and their impact on migrant workers remain under-theorised.¹²

Low-wage migrant workers employed in Asia’s largest destination countries are generally issued visas tied to a particular employer or sector, are not able to apply for permanent residence and are not permitted to sponsor family members. However, beyond these standard restrictions, there are meaningful variations in the ways destination countries regulate low-wage labour migration that have a material impact on outcomes for migrant workers. This analysis draws upon an in-depth study of regulatory variations across Asia’s seven biggest destination countries undertaken for the author’s doctoral thesis, which argued that the more a destination country government is directly involved in the recruitment of its low-wage migrant workforce, and the more it regulates the migrant worker-employer relationship, the better outcomes such workers experience.¹³

Singapore, Hong Kong, Taiwan and Malaysia have largely delegated management of the entry, stay and treatment of low-wage migrant workers to employers and their agents in the private sector. With respect to Taiwan, Tseng and Wang refer to this as the ‘privatization of governance’ and ‘governance at a distance’.¹⁴ In ‘privatised’ tied visa regimes, employers and their agents recruit migrant workers, workers are generally required to obtain their employers’ consent to change jobs and groups of low-wage migrant workers (for example, foreign domestic workers) are excluded from some basic protective labour laws.¹⁵

South Korea, Thailand and Japan have taken a different approach. These destination countries have asserted some control over the recruitment process, approve workers’ job change requests in a wider variety of circumstances without requiring employer consent and apply protective labour laws to all workers unless an exclusion is justifiable on non-discriminatory grounds.¹⁶ While the tied visa regimes in South Korea, Thailand and Japan are still highly restrictive, predicted outcomes for workers employed through them include lower recruitment costs, increased bargaining power in their employment relationships, higher wages and better protection from mistreatment relative to low-wage migrant workers elsewhere in Asia. Lowering workers’ recruitment costs, which are often debt-financed, by reducing profit-seeking in the recruitment process is a particularly important policy goal.¹⁷

This paper considers the labour migration policies applicable to low-wage migrant workers in South Korea and Thailand, two of the three destination countries in Asia that have asserted more direct regulatory control over labour migration flows and the migrant worker-employer relationship. Japan is not included in the analysis because only limited empirical data related to its Specified Skilled Worker visa scheme, which launched in 2019 and was paused during the COVID-19 pandemic, are available.¹⁸

While there are similarities in their regulatory approaches, South Korea and Thailand are very different in terms of the size of their economies, the characteristics of their labour markets, their main sending country partners and other factors that impact the implementation of their labour migration policies and outcomes for workers. Nevertheless, policy reforms in South Korea and Thailand over the last 20 years have achieved similar favourable outcomes for millions of low-wage migrant workers who pay the lowest recruitment costs and earn the highest wages relative to their respective destination country’s citizen populations in the region.¹⁹ As such, lessons can be drawn from these regimes to reform labour migration policies in other destination countries, while recognising that significant challenges remain for protecting and advancing workers’ rights in these restrictive regimes.

This paper takes a combined doctrinal and empirical approach, combining a review of South Korea and Thailand’s low-wage labour migration laws, regulations and policies with an analysis of available data evidencing the impact of these on migrant workers. A focus on outcomes for workers follows the approach suggested by Drahos to move ‘beyond the narrow or juridical view of regulation … to [arrive at] a theory of regulation with much more empirical content’.²⁰ The data related to recruitment costs, the ability to change jobs, and wages were gathered primarily from studies published by migrant worker advocacy groups, government agencies, non-governmental and international organisations, news reports and fieldwork-informed academic research. In addition, the author conducted 12 interviews in Seoul in 2019 and in Bangkok (remotely via videoconferencing platforms) in 2023 with migrant worker advocates, lawyers, academics and policymakers about their work and their experience of designing or advocating for reform of low-wage labour migration policies.

This paper proceeds in four parts. Part 2 considers how these two destination countries differ in terms of their economic, political and geographical contexts. Parts 3 and 4 provide an overview of the low-wage labour migration regimes in South Korea and Thailand, respectively, focusing on policies related to migrant worker recruitment, labour market mobility and protective labour laws. Part 5 concludes by drawing lessons from these case studies for other destination countries in the region and beyond who are currently following the ‘privatised’ approach.

2. ECONOMIC, POLITICAL AND GEOGRAPHICAL CONTEXTS

Among the seven biggest low-wage migrant labour-reliant destination countries in Asia, South Korea and Thailand stand out as destination countries where low-wage migrant workers on the whole experience more favourable outcomes. Specifically, they pay lower recruitment costs, receive higher wages relative to the relevant citizen population, have more labour market mobility and are better protected by labour law and social security programmes. One thing that is notable about this achievement is that it has come about in two countries that are strikingly different in terms of the size of their economies, the characteristics of their labour markets and their political and geographic contexts—all factors that presumably would impact the choice of which labour migration policies to pursue and how to implement them. One thing they have in common is that until relatively recently, both South Korea and Thailand were experiencing larger outflows of workers than they were receiving, which may mean policymakers are more aware of the exploitative potential of ‘privatised’ time-limited visa regimes.

A. Economies and Labour Markets

South Korea is a high-income country with a highly industrialised, technology-driven economy that is experiencing economic growth alongside an ageing population, a declining birth rate and a high degree of labour market segmentation.²¹ Labour market segmentation refers to the division of the labour market into sub-markets that have different characteristics and operate according to different behavioural rules. The phenomenon has been observed in many highly industrialised economies and the social and economic cost of segmentation include wage gaps, variable access to training and social security and marked differences in job security and working conditions.²² South Korea imports a relatively small number of low-wage migrant workers, who comprise just 1.3% of its total labour force. One reason for this is that South Korea has historically met some of its demand for low-wage labour through ethnic return migration.²³

In Thailand, an upper-middle income country with a gross national income per capita that is just 22% of South Korea’s, a low unemployment rate coupled with the same demographic trends is driving demand for low-wage migrant labour. Thailand has a bigger population than South Korea and imports a larger cohort of low-wage migrant workers—the largest in Asia—who comprise 6.7% of its labour force. Table 1 provides a summary snapshot of population, labour force and economic data for South Korea and Thailand.

B. Political Environment

South Korea is a presidential republic that has been a stable democracy since its democratic transition in 1987. Since then, the conservative People Power Party (PPP) and its predecessor parties, who have controlled the National Assembly for all but nine years, have taken a ‘semi-social democratic’ approach to welfare and social insurance programmes.²⁶ Successive conservative administrations have clashed with and brought criminal charges against labour union leaders.²⁷ However, the country has conducted free and fair democratic elections since 1987 and each presidential election has been followed by a smooth transition of power. A conservative party candidate, Yoon Suk-yeol of the PPP, won the most recent presidential election in March 2022—the closest in the country’s history—by less than 1% of the vote.²⁸

Thailand’s recent political history has been more tumultuous. Musikawong sums it up starkly: ‘Thailand remains a politically volatile and repressive authoritarian country with apparent economic stability’.²⁹ The constitutional monarchy has experienced bouts of political turmoil since 2005 including a military coup in 2006, which was followed by large-scale street protests by competing political factions in 2008, 2009 and 2010.³⁰ More protests followed the 2011 election, and another military coup was staged in 2014. The military-affiliated National Council for Peace and Order ruled the country for more than four years and drafted a new constitution giving the military a veto over the choice of future prime ministers. The revered Thai King passed away in October 2016 after 70 years on the throne and his only son replaced him in December 2016. The military retained power after the 2019 election and the country once again experienced large-scale anti-government protests in 2020. In the 2023 general election, the Move Forward Party, a social democratic and progressive political party that opposes military control, won 36% of the vote and became the biggest party in the Thai House of Representatives. They formed a coalition but were not able to form a government, with their preferred candidate for prime minister being blocked under the re-drafted constitution in July 2023.³¹

C. Geographic Context

South Korea is on a peninsula surrounded by water and shares a hard, militarised border with North Korea. Thailand, on the other hand, shares long, porous, jungle-filled borders with Myanmar, Laos, Cambodia and Malaysia. The communities along the border have a long history of co-existing and of labour, political, socio-economic and cultural exchange that predate the colonial borders drawn by England and France in the late 1800s.³² These communities ‘view their border-crossing as a day-to-day general movement, and not as an act of international migration’.³³ While the central government ordered the closure of Thailand’s 17 land border crossings during the COVID-19 pandemic, control of these land borders in non-pandemic times remains largely with provincial and village leaders along the Laos and Myanmar borders and with the military police on the Cambodian border.³⁴

3. SOUTH KOREA’S EMPLOYMENT PERMIT SYSTEM AND OTHER LOW-WAGE VISA CATEGORIES

In the early 1980s, over 100,000 mostly male low-wage migrant workers were leaving South Korea each year for West Asia and elsewhere.³⁵ But by the late 1980s, an economic boom was creating demand for low-cost labour at home and within a decade the country made a dramatic transition from country of origin to destination. Some of this new demand for labour was met by migrants of Korean heritage coming mostly from China, ³⁶ but additional workers were needed, so the South Korean government launched The Overseas Investment Enterprise Technical Trainee System in 1991, aimed at large companies.³⁷ Small and medium-sized businesses soon lobbied for similar access to low-wage labour and the government set up the Foreign Industrial Trainee Scheme for that purpose in 1993, ³⁸ which was extended and renamed the Training-Working Scheme in 2002.³⁹ By the early 2000s, as Korea recovered from the 1997 economic crisis, the trainee scheme was bringing ‘around 100,000–200,000 workers from China and Southeast Asia to labour for [two to] three years, for less than the minimum wage, under the guise of “skill transfer”’.⁴⁰

The South Korean Government observed what it deemed to be undesirable outcomes related to these ‘trainee’ programmes including high recruitment costs for workers, breaches of migrant workers’ rights and, at the same time, continued labour shortages for small and medium-sized enterprises in low-wage sectors.⁴¹ High recruitment costs were identified as resulting from the ‘corrupt practices’ of ‘private placement firms’⁴² which, in turn, led trainees to overstay their work visas or change sectors without authorisation to repay their recruitment debt.⁴³ It is estimated that the number of undocumented workers in South Korea grew from a few thousand in 1991 to over 136,000 in 1997, ⁴⁴ and South Korea’s Ministry of Justice estimated that over 70% of its documented trainee workforce became undocumented over time.⁴⁵

To address the issues arising from its trainee schemes and to expand the legal routes for low-wage labour migration, the South Korean government began to sign bilateral labour agreements with countries of origin to arrange for the direct recruitment of workers and introduced the Employment Permit System (EPS) in 2004. The purpose of the EPS was to increase the country’s access to migrant labour, reduce visa overstay by reducing recruitment costs and better protect migrant workers’ rights.⁴⁶ The EPS was developed by the Ministry of Employment and Labor in consultation with Korean trade unions and civil society organisations.⁴⁷ Amendments were made to the Act on the Employment etc. of Foreign Workers⁴⁸ to classify low-wage migrant workers as ‘workers’ instead of ‘trainees’ and to grant them the same protections as citizen workers under the Labor Standards Act.⁴⁹

When compared to its predecessor trainee schemes, the EPS has succeeded in decreasing migrant workers’ recruitment costs, increasing their labour market mobility, increasing their wages and better protecting their labour rights, thereby strengthening their bargaining power in their employment relationships. In recognition of this achievement, the Human Resources Development Service of Korea, which is responsible for administering the EPS, was given the 2011 United Nations Public Service Award for ‘Admission System That Supports Shared Growth of Migrant Workers and Employers (Preventing and Combating Corruption)’.⁵⁰ A 2010 International Labour Organization brochure called the system ‘a courageous experiment in decent work’ and ‘the most important bilateral arrangement for cross-border labour migration in Asia’.⁵¹ Importantly, this progress towards better outcomes for migrant workers was achieved with the help of strong domestic labour unions and favourable rulings from the Korean Supreme Court⁵² and Constitutional Court.⁵³

South Korea imports a relatively small number of low-wage migrant workers given its size—under 400,000—who comprise less than 2% of its total labour force.⁵⁴ For comparison, in Hong Kong, Malaysia and Singapore, low-wage migrant workers make up between 10% and 24% of the labour force. About half of South Korea’s low-wage migrant workers are recruited through the EPS on E-9 (Non-professional Employment) visas.⁵⁵ Another 12,500 seasonal workers on time-limited visas, which are administered by the Ministry of Justice and local governments in rural areas, are recruited outside of the EPS’s bilateral labour agreements through private recruitment agents.⁵⁶ In addition, about 27,000 foreign seafarers recruited outside of the EPS work for Korean fishing operations offshore.⁵⁷ These workers face high recruitment costs, less protection under relevant labour laws and an increased risk of exploitation compared to EPS workers.⁵⁸

The restrictions and working conditions faced by workers in these visa categories can be compared to low-wage workers on H-2 (Work and Visit) visas, the most permissive and flexible of South Korea’s low-wage visa schemes, which are available to non-citizens of Korean heritage. Up to 303,000 such visas are available to applicants who have family in South Korea or who are the parent or spouse of someone in Korea on a student visa, and on a lottery basis, to non-citizens of Korean heritage from China and the Commonwealth of Independent States.⁵⁹ In recent years, take-up on the low-wage visa scheme for non-citizens of Korean heritage has fallen to about half of its capacity.⁶⁰ This has likely contributed to the emergence of seasonal visa schemes outside of the EPS to fill perceived labour shortages in low-wage sectors.

Only small- and medium-sized enterprises with fewer than 300 workers in the manufacturing, agriculture and livestock, construction, fisheries and service sectors are eligible to employ EPS workers on E-9 visas.⁶¹ Furthermore, the number of E-9 visa holders an employer can hire depends on the number of citizen workers on their payroll, with extra allowance for companies outside of Seoul up to a maximum of 50 E-9 workers. Companies are less constrained when it comes to employing workers on H-2 visas, who can enter the country without an employment contract and find work in a wider set of sectors.⁶²

Applicants to the E-9 visa scheme must be under the age of 40⁶³ and must pass a basic health screening and a Korean language proficiency test in their country of origin.⁶⁴ The vast majority of E-9 workers are male, under the age of 30, have completed at least 9 years of basic education and have worked in South Korea for between 1 and 3 years.⁶⁵ By contrast, over 50% of H-2 visa holders were between the ages of 50 and 59 in 2021.⁶⁶ The rest of this section considers how South Korea regulates the entry, stay and treatment of low-wage migrant workers with a focus on three policy areas that have a large influence over the outcomes they experience: recruitment, labour market mobility and the scope and application of protective labour laws.

A. Recruitment

Under the EPS, E-9 visa holders are recruited through 16 bilateral labour agreements.⁶⁷ The Human Resources Development Service of Korea works with countries of origin to identify and screen workers, and government job centres act as intermediaries between employers and pre-cleared workers. As a result, E-9 visa holders in South Korea pay the lowest recruitment costs in the region relative to their average monthly wages (US$950 on average in 2012)⁶⁸ and the second lowest after Thailand in absolute terms. Under its former trainee schemes, workers paid, on average, US$3,509 in recruitment costs in 2002.⁶⁹ Workers under the trainee schemes often became undocumented to stay in South Korea and maximise their earnings.

A variety of factors are considered by the Korean government when deciding whether to enter a new, or maintain an existing, bilateral labour agreement with a country of origin. These include employers’ preferences; how well the country of origin manages worker recruitment; the track record of workers returning to their country of origin when their visa expires; and South Korea’s diplomatic and economic relationship with the relevant country.⁷⁰ Countries of origin are incentivised to comply with the terms of their bilateral labour agreement because otherwise South Korea may reduce the quota of workers it draws from that country.⁷¹ The system is designed to encourage countries ‘to “compete” for larger quota allocations by demonstrating that they can adhere to sending procedures, reduce sending costs, eliminate “irregularities,” and guarantee fairness in recruiting’.⁷²

It is difficult to find data on recruitment fees paid by migrant workers in South Korea on seasonal work visas and in the offshore fishing industry but given that these workers are recruited by private agents outside of government-to-government channels, it is likely that, just like elsewhere in the region where private recruiters dominate labour migration corridors, they pay fees worth between five and eight months of their wages in Korea.⁷³ On the other end of the recruitment fee spectrum, according to a 2021 Korean government survey, less than 20% of H-2 visa holders paid a private recruiter a fee of around US$120 to find a job in South Korea.⁷⁴

B. Labour Market Mobility

In South Korea, low-wage migrant workers on E-9 visas are primarily limited to working in four sectors: manufacturing, agriculture and livestock, construction and fisheries. A proposal has been made to allow E-9 visa holders to also work in restaurants and hotels.⁷⁵ H-2 visa holders, by contrast, have access to 29 sectors and only need to notify the relevant government authority when they change jobs.⁷⁶ The government sets annual low-wage migrant worker quotas by sector, ⁷⁷ taking into account the level of activity in the domestic economy, the unemployment rate, demographic trends and industry surveys tracking labour shortages.⁷⁸ This rigidity in terms of assessing which sectors are experiencing labour shortages leads to a reluctance to let workers move freely between sectors.

Still, the EPS grants workers the opportunity to change employers more freely its predecessor trainee regimes. Following amendments made to the EPS in 2012 prompted by a 2011 Constitutional Court case, ⁷⁹ workers on E-9 visas are permitted to change jobs for any reason within their sector with the permission of their employer up to three times during their initial three years of employment and an additional two times if their visa is extended to the maximum duration of 4 years and 10 months.⁸⁰ E-9 workers do not need their employer’s permission to change jobs if their working conditions deteriorate for reasons outside of their control. For example, they are permitted to change jobs if their employer engages in wage theft or unfair treatment, or upon the closure of their workplace.⁸¹ In that case, they can go directly to a government-run job centre to request an alternative employer. A worker can remain in South Korea for up to three months to find a new job if they have sufficient time left on their visa. Between 2012 and 2015, an average of 57,000 workers per year requested a change of employer with an 88% success rate.⁸² In 2013, 342 EPS workers applied for a change of employer on the basis that they had suffered verbal abuse, physical violence, sexual assault or harassment and in 339 cases the request was granted.⁸³ Between 2011 and 2015, almost all EPS workers who switched jobs were re-employed within the same industry, but if the job centre is unable to find suitable opportunities for the worker within two months, it will expand its search beyond the sector and location in which the migrant worker was initially employed.⁸⁴ The Korean government also holds job fairs and has implemented a text message alert system to inform migrant workers of job openings. Further reform to uncouple E-9 visa holders’ immigration status from their employers completely, as is already the case for H-2 visa holders, would increase E-9 workers’ bargaining power in their employment relationships and make it easier for workers to assert their labour rights.

C. Protective Labour Laws

A third important aspect of South Korea’s approach to the management of its low-wage migrant workforce concerns the scope, application and enforcement of its protective labour laws. Under the EPS, South Korea applies its suite of protective labour legislation, including the Labor Standards Act, Minimum Wages Act, Industrial Health and Safety Act and National Health Insurance Act, to most low-wage migrant workers in the country. A 2014 International Labour Organization study found ‘very few’ cases of low-wage migrant workers in South Korea being paid less than the statutory minimum wage.⁸⁵ An empirical study of the working and living conditions of over 1,000 low-wage migrant workers from 15 countries conducted by the Migration and Human Rights Institute in 2018 found that men in the manufacturing sector fared better than any other category of E-9 worker, earning higher wages and working fewer hours per week than women in the agricultural sector.⁸⁶ But overall, the EPS has been successful in reducing the amount of wage theft related to late payment of wages suffered by low-wage migrant workers in South Korea. In 2001, a survey found that almost 40% of low-wage migrant workers employed under the Foreign Industrial Trainee Scheme reported that their employer owed them overdue wages.⁸⁷ In contrast, surveys of EPS workers conducted in 2007 and 2011 found that only 9% and 1.1% of respondents, respectively, reported being owed wages.⁸⁸ It is difficult to know how representative these percentages are given the power dynamics that deter workers from lodging complaints against their employers, but this does seem to be a marked reduction in wage theft compared to what workers experienced under previous trainee schemes.

The EPS gives low-wage migrant workers access to the country’s four major nationalised insurance systems: health insurance, industrial accident compensation, unemployment insurance and the national pension.⁸⁹ Since the implementation of the EPS, occupational accidents for low-wage migrant workers have fallen by nearly 50%.⁹⁰ In addition, workers and their employers must pay into migrant worker-specific insurance or savings schemes including departure guarantee insurance, wage payment guarantee insurance and repatriation cost insurance.⁹¹ When an E-9 visa holder’s stay in Korea comes to an end, the Human Resources Development Service pays them a lump sum representing their contributions to the pension, departure guarantee and repatriation cost funds.⁹²

Despite better coverage generally under protective labour laws compared to the previous trainee schemes, there are exceptions that apply for businesses that employ fewer than five workers and to employers in the agriculture and livestock and fisheries sectors. Because many EPS workers are employed in these sectors and are exclusively employed by small and medium-sized businesses, they are much more likely to be impacted by these exclusions than citizen workers.⁹³ Even manufacturing companies that employ up to three hundred workers, where employment relations are relatively formalised, may escape regulatory oversight and are far less likely to have a union presence than larger companies that do not employ low-wage migrant workers.⁹⁴

Migrant worker advocates in South Korea recommend that the Ministry of Employment and Labor should be given oversight of all ‘migrant worker visa categories and quotas in order to implement a more coherent and less fragmented labour immigration policy’.⁹⁵ The country’s social insurance schemes should also apply to all low-wage migrant workers, as they currently do to most E-9 and H-2 workers. In addition, ensuring compliance with labour laws requires continued monitoring and routine and robust enforcement.

4. THAILAND’S PATHWAYS FOR LOW-WAGE LABOUR MIGRATION

Like South Korea, Thailand exported low-wage workers to West Asia and elsewhere, with over 200,000 workers emigrating at the peak in 1995,⁹⁶ before becoming a key destination country for its neighbours.⁹⁷ A low unemployment rate, ageing population and increasingly segmented labour market are driving demand for low-wage labour migration and the country’s ‘heavy reliance on labour provided by migrant workers … is likely to continue’.⁹⁸ In 2002 and 2003, Thailand signed labour migration MOUs with its neighbours, but most migrant workers enter through other channels or regularise their status through amnesty programmes. Since 2017, the Thai government has sought to reduce reliance on non-MOU channels and develop a more comprehensive legal framework for migrant rights protection but faces challenges including geographical (long and porous borders) and geo-political (an influx of migrants related to economic and political instability in Myanmar). Today, Thailand’s 20.6 million low-wage migrant workers, representing almost 7% of the labour force, are primarily employed in fishing, seafood processing, agriculture, construction, manufacturing, domestic work and other services.⁹⁹ Notably, low-wage workers from Thailand migrate to South Korea and as a result the government is familiar with the Korean model and has held it up as an example when reforming their own MOU process.¹⁰⁰

Thailand draws most of its low-wage migrant workers from its immediate neighbours, Cambodia, Laos and Myanmar.¹⁰¹ MOUs with each of these countries provide a pathway for legal low-wage labour migration and in 2016 Thailand signed another MOU with Vietnam. In 2017, the Royal Ordinance Concerning the Management of Employment of Foreign Workers (the Royal Ordinance)¹⁰² came into force, making the MOUs the preferred channel for low-wage migrant workers to come to Thailand.¹⁰³ Nevertheless, only a small proportion of migrant workers—564,523 workers out of about 2.6 million documented migrant workers in 2023¹⁰⁴—gain entry to Thailand’s labour market through these agreements as the process is considered to be complicated, lengthy and expensive for both workers and employers.¹⁰⁵ Nevertheless, there has been an increase in the use of the MOU channels since the 2017 Royal Ordinance came into effect.¹⁰⁶

Section 64 of the Royal Ordinance sets out an exception to the MOU process for employers hiring migrant workers in Thailand’s border areas for between one month and two years.¹⁰⁷ As of 2023, there were 17,612 migrant workers from Cambodia and Myanmar employed on time-limited border passes.¹⁰⁸ In addition, the Department of Fisheries was authorised through Section 83 of the 2015 Royal Ordinance on Fisheries to provide migrant workers in the fisheries sector with a migrant seabook, which is a work permit valid for working on a specific vessel for up to one year.¹⁰⁹ This so-called emergency measure enables the Department of Fisheries to facilitate the employment of migrant workers while bypassing Ministry of Labour regulations relating to worker recruitment and working conditions.¹¹⁰ In response to criticism and increased scrutiny over working conditions in its fishing industry, Thailand ratified the ILO Work in Fishing Convention (C188) in 2019, which came into force in 2020 and sets minimum standards for working conditions on fishing vessels and passed the Labour Protection in Fisheries Act (BE 2562) in 2019.¹¹¹ Between 150,000 and 200,000 migrant workers are currently authorised to work on the basis of migrant seabooks issued by the Department of Fisheries.¹¹²

By far the largest group of documented migrant workers in Thailand are those who have received up to two-year residency permits through periodic regularisation opportunities and amnesties announced in Thai Cabinet resolutions.¹¹³ These Cabinet resolutions offer migrants from Cambodia, Laos and Myanmar who have either entered Thailand without documentation or have lost their documented status, the opportunity to register through a nationality verification process.¹¹⁴ When the Royal Ordinance came into effect in 2017, new penalties for irregular migration were introduced to encourage workers to apply for work visas through the MOU process, but the announcement of these penalties instead resulted in about 60,000 already-present migrant workers leaving Thailand between 23 and 28 June 2017.¹¹⁵ To stem the tide, the government postponed the implementation of the Royal Ordinance¹¹⁶ and the Cabinet enabled over 1.2 million migrant workers to regularise their status between July 2017 and June 2018.¹¹⁷ During the COVID-19 pandemic, similar measures were implemented to prevent workers from becoming undocumented because their national identity document was scheduled to expire while national borders were closed.¹¹⁸ An April 2021 Cabinet resolution specifically applied to fishery workers and allowed for an extension of their seabooks for one year.¹¹⁹ In July 2022, a Cabinet resolution again provided 2.1 million migrant workers the chance to renew their work permits without incurring the cost of returning to their countries of origin.¹²⁰ Musikawong notes that these regularisation windows have ‘created a “zone of temporary legality” fraught with anxiety and financial burdens as workers often pay brokers to assist them with the bureaucratic procedures for registration and work permits’.¹²¹

While the periodic availability of regularisation windows since the 1990s may be a disincentive for workers to migrate through the MOU process, these regularisation opportunities are not guaranteed and working irregularly carries the risk of deportation, fines and up to two years of imprisonment.¹²² Despite these risks, a significant part of the demand for low-wage labour in Thailand continues to be met by almost a million undocumented migrant workers.¹²³ Even when regularisation windows are opened, the Cabinet resolutions impose different, complicated procedures each time that many migrant workers find difficult to meet and many workers are unable to obtain or renew their passport or temporary ID document, which they need to complete the nationality verification process.¹²⁴ Migrant workers also have to pay fees to register, which can be burdensome.¹²⁵ As a result, the ILO estimated that more than half a million eligible migrant workers failed to regularise their status under the latest Cabinet resolution.¹²⁶ In addition, these regularisation opportunities only extend a worker’s right to remain in Thailand for another year or two, at which point they may become undocumented again. The rest of this section considers how Thailand regulates the entry, stay and treatment of low-wage migrant workers with a focus on recruitment, labour market mobility and the scope and application of protective labour laws.

A. Recruitment

Thailand’s MOUs with countries of origin stipulate that Thailand will compile a list of jobs to be filled, the country of origin will compile a list of suitable workers and then the countries will cooperate to furnish each worker with an entry visa, work permit, health insurance and a standard two-year employment contract.¹²⁷ The MOUs require employers to pay 15% of their workers’ salaries into a savings fund, to be paid back to the worker with interest once they have returned to their country of origin at the end of their contract.¹²⁸

The Royal Ordinance prohibits employers and recruitment firms in Thailand from charging workers for recruitment-related costs but there are still documentation and travel costs that workers either pay upfront or take on as debt, plus ‘processing’ fees owed if they use a registered recruitment firm to help them navigate the MOU process.¹²⁹ In fact, Musikawong notes that since the Royal Ordinance came into force, migration costs paid by migrant workers have risen¹³⁰ and this is especially true in the Myanmar to Thailand corridor, likely due to inflation and the political and economic crisis in Myanmar, which has increased the pool of willing labour migrants.¹³¹

However, it seems migrant workers in the fishing industry have benefited from the Thai Government’s efforts to promote more regular migration through the MOU process. An ILO survey of seafood and fishing sector migrant workers found that in 2017, 65% of the workers surveyed had migrated to Thailand irregularly but later regularised their status while only 19% of seafood workers and 2% of fisheries workers had entered the country via the MOU process. These figures increased to 83% and 39% of migrant workers surveyed in these industries in 2019.¹³² According to the same survey, the use of recruitment agencies by migrant fishers dropped sharply in the same period from 30% in 2017 to 9% in 2019, and the number of workers who said they paid no upfront recruitment fees rose from 45% to 90%.¹³³ In addition, implementation of mandatory electronic bank transfers and greater scrutiny by the government of fishing industry recruitment practices has made it more difficult (although not impossible) for employers to recoup recruitment costs through wage theft.¹³⁴

Thailand has sought to channel more migrant workers through the MOU process and has had some success in increasing the use of this channel, at least in the seafood processing and fisheries industries. Overall, migrant workers in Thailand pay the lowest recruitment costs in the region in absolute terms and the second lowest relative to their average monthly salary after South Korea. Although Thailand has not yet been successful in the complete eradication of recruitment costs or in channelling all migrant workers through its MOU routes, it has improved outcomes for many migrant workers through its recruitment-related policies.

B. Labour Market Mobility

When a worker migrates through the MOU process, they receive a two-year work visa that is renewable once for a maximum duration of four years. After that, the worker must return home and cannot reapply for three years.¹³⁵ Prior to the introduction of the 2017 Royal Ordinance, low-wage migrant workers were strictly tied to one employer for the duration of their work visa. One result of this was that migrant workers often became undocumented when moving to a new workplace.¹³⁶ Under the 2017 Royal Ordinance, workers are permitted to change employers if the employer dies, closes the business, abuses the worker, or violates the Labour Protection Act.¹³⁷

While the Royal Ordinance has increased opportunities for labour market mobility, changing jobs requires obtaining permission from the Registrar, a burdensome administrative hurdle and workers experiencing abuse or exploitation in the workplace may be reluctant to approach the authorities for fear of reprisals from their employer.¹³⁸ A ‘lack of flexibility to change jobs contributes to increased vulnerability to abuse’.¹³⁹ Empirical work published by the Five Corridors Project determined that it indeed remains very difficult for migrant workers who have been recruited under the MOU between Thailand and Myanmar to change jobs.¹⁴⁰

C. Protective Labour Laws

The 1998 Labor Protection Act applies to all workers in Thailand except for workers in agriculture, fisheries and domestic work—all sectors that employ a high proportion of migrant workers. In the agricultural sector, workers are categorised as seasonal workers or even independent contractors, which means they are not legally entitled to full social security and other benefits of employment.¹⁴¹ However, the minimum wage was increased on 1 January 2020 and other reforms have been promised: ministerial regulations are in the process of being amended to extend social security benefits to workers in informal sectors such as migrant domestic workers.¹⁴² In addition, Thailand has set up ten migrant worker assistance centres, which provided support to around 18,000 migrant workers in 2020¹⁴³ and 41,823 in 2022.¹⁴⁴ The government has also organised training for employers and workers at Fishing Workers’ Coordination Centres in 22 provinces.¹⁴⁵

5. LESSONS TO BE DRAWN FROM THE CASE STUDIES

South Korea and Thailand are two destination countries in Asia experiencing some of the same demographic, economic and labour market challenges, but they are very different in terms of their geographic and economic size and the governance capacity of their democratic institutions. This makes the fact that they have followed a similar approach to the regulation of low-wage migration, implemented similar policies and achieved similar favourable outcomes for low-wage migrant workers remarkable. An analysis of the low-wage labour migration policies in these two destination countries indicates that efforts to directly control migrant worker recruitment processes, increase migrant workers’ labour market mobility and expand the application and scope of protective labour laws can materially improve outcomes for migrant workers. Wealthier destination countries that admit fewer low-wage migrant workers will have more capacity to invest in and directly manage workers’ recruitment and stay. However, Thailand’s experience shows that gains can be made for migrant workers even if the ratio of migrant workers in the labour market is high and further investment in directly recruiting migrant workers and protecting their labour rights is constrained by a more challenging economic and political context. Lessons can be drawn from these case studies and applied in high-income and upper-middle-income destination countries alike to counteract the exploitative dynamics of time-limited, low-wage visa schemes.

The first lesson from these case studies is that to reduce worker-borne recruitment costs for migrant workers, destination countries should centralise control of the recruitment process in government agencies. The effectiveness of a government-managed approach to recruitment has also been observed in other geographical contexts.¹⁴⁶ South Korea and Thailand have sought to do this for some migrant workers through bilateral labour agreements with countries of origin with varying levels of success. In South Korea, 57% of low-wage migrant workers are recruited through the EPS with another 33% of migrant workers granted ‘work and visit’ visas reserved for non-citizens of Korean descent. South Korea’s bilateral labour agreements set limits on fees that can be collected in the country of origin while making it unlawful to charge recruitment fees in South Korea. Capping recruitment costs for workers instead of seeking to eliminate them contravenes International Labour Organization guidance, which is that recruitment services should be provided for free by government agencies or paid for by employers and in no event should such costs be borne by migrant workers.¹⁴⁷ In Thailand only 21% of low-wage migrant workers are currently recruited through the MOU process, although in the fisheries industry, the use of the MOU channel is rising.¹⁴⁸

Importantly, implementing bilateral labour agreements that formalise the involvement of private recruitment agents, as Malaysia has done, do not produce the same favourable outcomes for workers. In other words, signing bilateral labour agreements with countries of origin only reduces worker-borne recruitment costs if the recruitment process is genuinely managed by the destination and country of origin governments with adequate investment made to reduce the role and influence of private recruitment agents. Pushing beyond what has been achieved in South Korea and Thailand, the benefits and protections offered by government-to-government recruitment arrangements should be available to all low-wage migrant workers. A proliferation of other legal and irregular recruitment channels undermines the benefit of a destination country’s efforts in this regard.

Another lesson to be drawn from these case studies is that a worker’s visa should not be tied to one employer. Increasing the flexibility of a work visa so that it can move with the worker to a new employer or even a new industry, increases workers’ bargaining power in their employment relationships. This, in turn, improves outcomes for workers by reducing violations of labour rights while also reducing the incidence of migrant workers becoming undocumented in search of better working conditions and higher wages. In addition, setting up migrant worker assistance centres, as both South Korea and Thailand have done, provides workers with support when seeking a new job or reporting a labour rights violation. To be useful, migrant worker assistance centres need to be well-funded, staffed with people who can communicate with workers in a common language and located where migrant workers are based.

Finally, destination countries should apply basic labour law protections, minimum wage legislation and social security schemes to low-wage migrant workers, as both South Korea and Thailand have done. Doing so helps to narrow the wage gap between low-wage migrant workers and the resident population. In South Korea migrant workers earn, on average, 45% of the resident median monthly wage. In Thailand, the gap in wages earned by these two groups is even smaller with low-wage migrant workers earning 57% of the resident median monthly wage. These ratios are higher than low-wage migrant workers achieve in the other four destination countries in Asia for which data is currently available: Singapore (11-20%), Hong Kong (24-34%), Taiwan (32-41%) and Malaysia (21%). Destination countries should make reducing the harmful economic consequences of segmented labour markets experienced by migrant workers, including persistent wage gaps, job insecurity and sub-standard working conditions, a priority.

To provide the most benefit to low-wage migrant workers, the policy reforms outlined above must be implemented in an outcomes-oriented and consistent manner. Even South Korea and Thailand, which have made gains for migrant workers through the implementation of a government-managed approach to low-wage labour migration, have not afforded all migrant workers the same level of protection. These persistent gaps in protection for some migrant workers, who, for example, are recruited outside of government-to-government arrangements, illustrate the challenge of overcoming the exploitative dynamics that are built into the logic of these time-limited low-wage visa regimes. Nevertheless, incremental gains can be achieved for migrant workers through policy reform and the approach pursued by South Korea and Thailand can be a model for other destination countries in Asia and beyond.

Footnotes