Cambodia Employment Laws: A Complete Guide for Employers

Situated in the Southeastern region of Asia, Cambodia has evolved its labor laws substantially over the years. It is known that their labor laws became over five main stages constituting the pre-independence era, post-independence eras from 1953 to 1970, 1970 to 1974, 1979 to 1992, and 1993 to the present. Hence, Cambodian labor law constitutes primal aspects of French colonization. 

The main components of the labor regulations of Cambodia consist of Civil, Criminal Codes and different rules of law prescribed in the constitution. Hence, the Ministry of Labor and Social Affairs was established in 1951 to ensure adherence to these rules and safeguard the employees’ and employers’ rights. 

The Cambodia Labor Law is highly dynamic and constantly subject to upgrade as per the political and societal norms. The labor act rules in Cambodia also provide social security to the employees, which would even make expatriates come and work here. 

In this article, let’s learn about the different labor regulations in Cambodia that would give one an idea before working or setting up their business here. 

Applicability of the Act 

The Cambodia Labor Law safeguards the rights of the national citizens and foreign nationals working in the country. Let’s read who is entitled to refer to the Cambodia Labor Law. 

• Individuals who are citizens of Cambodia and have reached the age of 15 or above are eligible for employment. Those between the ages of 12 and 15 may engage in light work. 
• Expatriates who are transferred here by the principal company to work. They receive equal benefits as the citizens of the country. 
• The employers who are operating both in and outside of the country. They have to abide by the social security of the country. 
• Employers’ interest groups are the stakeholders of the company. 
• Trade unions safeguard the rights of the employees in Cambodia. 

Employment Contract 

The fundamental need for establishing an employment contract in Cambodia is safely entering an employment relationship. Cambodia has two employment contracts: Fixed Duration Contracts (FDC) and Unfixed Duration Contracts (UDC). 

The duration of FDC is roughly two years. The contract has to specify the start and the expiry dates. The concept of expiry date is subjective depending upon the components of the contract. According to labor regulations in Cambodia, the FDC contract is also entitled to be renewed. 

Both FDC and UDCs are not required to be in writing. The parties, however, must be aware of their rights and regulations in a written format. UDCs must meet the minimum standards through the Cambodia Labor Law, or it will be achievable.

Specific mandatory components should be included in the Employment Contract. They are: 

• Both parties’ references as “employer” and “employee.”  
• Employers are only allowed to change the terms and conditions of the contract if they are in charge of the contract.  
• The overtime pay, leaves, and other benefits and compensation packages should be mentioned in the contract. 
• The specification of notice periods, termination grounds, and other vital components should be mentioned in the contract. 

The above labor regulations in Cambodia make an employment contract concrete and specific. Without the inclusion of the above regulations, the contract thus becomes voidable. 

Key Provisions of the Act 

The Cambodian Labor Code is a medley of different laws and regulations. The labor code consists of provisions from: 

• The constitution. 
• The labor law. 
• Regulations by the royal government consist of sub-decrees. 
• Ministry of Labor. (Prakas, Notices, and Circular). 
• International Labor Standards of the ILO. 
• Collective Bargaining Agreement. 
• Employer’s Internal Regulations. 
• Employment Contracts. 

Let’s read about the other important aspects of Cambodia’s Labor Law. 

Minimum wage 

According to the labor regulations in Cambodia, employers must pay all full-time employees at least the minimum wage of $182. The minimum wage chart of the employees is as follows. 

This is the minimum wage rate that Cambodian employers have to abide by to have a seamless business. 

Minimum age 

The Cambodia Labor Law also specifies a minimum age of employment. The minimum age of employment for full-time employees is 15. However, there are also rules for employees aged 12-15. Children between the age of 12-15 can work part-time for lightweight work. 

Wage payment 

The wages are paid in the following ways:

• The employers pay their employees directly according to the labor regulations of Cambodia. 
• The employers must pay the employees via cash. 
• The employer must pay the wage during working hours. 

Working hours and overtime

As per the Cambodia Labor Law, the regular working hours must not exceed eight a day or 48 hours a week. The employees are also entitled to 24 hours or at least one full day off per week. 

Overtime work is only allowed for exceptional and urgent hour work. Employees have the choice to work overtime or not. Employers must get permission from the Ministry before bestowing overtime on the employee. The maximum time of overtime is 2 hours a day. 

Payment for overtime is as follows: 

Public holidays and leaves 

 All employees are entitled to take paid annual leaves. Full-time employees get 1.5 days of annual leave a month. This amounts to 18 days of annual leave per year. 

All employees are also entitled to get sick leave. Employees should have the regulation to incorporate paid sick leaves. 

A female employee is entitled to get paid maternity leave for 90 days. She would also not be terminated if she is pregnant or is on maternity leave. 

All employees are entitled to public holidays. The public holidays adhere to Cambodian festivities and other important days. 

Pension 

The Cambodia Labor Law provides for full pension and old age allowances. The employee has to complete 55 years of service to be entitled to receive a pension. The employee must also be an employee of NSSF  for at least 20 years. The employer would provide the pension once the employee retires from their service. 

Severance pay 

The Cambodia Labor Law has the provision to provide both severance as well as redundancy pay. Payments made at the end of the contract discuss last month’s wage, payments for unused leave, and severance pay as applicable. 

On the contract’s expiry date, the employee has the right to receive severance pay. The severance pay must be 5% of the total wages paid to the employee during the fixed-term contract. 

Penalties 

If an employer or company violates labor regulations in Cambodia, no fixed penalties are specified. However, non-compliance with government decrees and the requirements of the Ministry and industry social security systems can lead to the closure of the business.

Compliance Strategies for the Employers 

Companies must strictly adhere to the employment law Cambodia guide for hiring and maintaining employees. They are: 

• Be updated about the latest labor code in Cambodia that adheres to overtime pay, working hours, overtime, and sick leave regulations. 
• Maintaining a meticulous record of the employees’ working hours and other vital information.
• The employer must obtain permits and licenses regarding the nature of the business from the local authorities. 
• Ensuring to put up workplace safety measures and adhere to the labor code in Cambodia regarding dispute resolution guidelines. 
• Conduct regular audits to maintain compliant laws and regulations per Cambodia Labor Law. 

How Can Multiplier Help?

Multiplier is a one-stop solution to help businesses with automated employment contract generation. They also help both employees and employers adhere to the latest employment codes. Multiplier also helps in setting up multi-lingual contracts with compliant expansion systems. 

Besides this, Multiplier helps set up international payroll with seamless employee onboarding methods.