Understanding Cambodia employment & labour law.

When hiring employees in Cambodia, there are specific requirements that employers must be aware of. This guide on employment & labour law in Cambodia highlights the key topics necessary for employment.

Let’s dive in.

Hiring foreign employees in Cambodia

If an employer wants to hire foreign staff, the employer must ensure that the foreigner:

• Has a valid passport and visa
• Does not have a contagious disease

The Employer will then need to obtain approval from the Ministry of Labour and Vocational Training (MLVT) for a quota to employ the foreigner and then apply for a Work Permit for the foreigner

What leave are employees entitled to?

Paid leave

The Labour Law provides paid leave to all employees of 1.5 days per month of employment. The right to use paid leave is acquired after one year of service.

Any worker who has worked for two continuous months is entitled, at the termination of his/her labour contract, to compensation for paid leave calculated in proportion to the amount of time he/she has worked in the enterprise.

For every three years of continuous service, employees are entitled to one extra day of paid leave.

Paid holidays

Employees in Cambodia are entitled to paid days off during festivals, memorials and religious holidays. The holidays will be announced by the government every year.

If the public holiday falls on a weekend, employees are given a day off the next working day. There are approximately 21 paid holidays in 2021.

Weekly day-off

It is required by the law that all employees must receive at least one full day off per week, which is usually a Sunday. Having the same employee work for more than six days a week is prohibited.

If having all the staff taking Sunday off affects the operation of the company (e.g. a restaurant), the following conditions may be applied:

• Give the staff a day off on another day other than Sunday
• Have the staff rest from Sunday noon to Monday noon
• Give the staff a rest by rotating all the staff

Sick leave

Employees are entitled to sick leave when they provide certification from an authorised hospital and legally recognised doctor verifying the employee’s illness.

Although paid sick leave is not provided for in the Labour Law, the Ministry of Labour has issued guidelines that sick leave should be paid according to the following table:

Maternity leave

Expecting mothers are entitled to 90-day maternity leave with pay after working for one continuous year.

The 90-day period includes weekends and public holidays. If the employee has not completed one year of work, she will be entitled to maternity leave without pay.

Employees are entitled to 50% of their normal wages and benefits during maternity leave.

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Working hours in Cambodia

Overtime work hours

The normal working hours in Cambodia are eight hours a day and 48 hours a week.

If employees are required to work overtime, including regular work hours, it must not exceed 10 hours a day, and employees can choose whether they want to work overtime or not.

It is required that employers receive permission from the Ministry of Labour and Vocational Training before having employees work overtime, and overtime is limited to two hours a day.

The employer must pay at least 150% of the employee’s wage if the work is performed on normal working days and 200% if work is done between the hours of 10pm and 5am.

Night work hours

As stipulated in article 144 of the Labour Law, night work is at least 11 consecutive hours, including the interval between 10pm and 5am.

Night work is paid at a rate of 130% of the hourly wage paid during the day. If overtime work is required at night, it is paid at a rate of 200% of the employee’s salary during the day.

If employees are required to work at night, employers must provide accommodation or transportation.

National Social Security Fund

The National Social Security Fund (NSSF) covers companies with any employees, which include:

• Employees defined by the provisions of the Labour Law
• Trainees, apprentices and individuals attending the rehabilitation centre
• Seasonal or occasional workers

Employee injury insurance scheme

For the Employment Injury Insurance Scheme, employers must pay 0.8% of the assumed wage of the employee’s monthly salary before taxation.

It is required that employers pay because any employee’s injury is considered to be the employer’s responsibility as they create jobs for employees and, at the same time, create an occupational risk.

The minimum monthly salary to calculate the contribution is KHR 200,000, and the maximum is KHR 1.2 million. For employees with salaries over KHR 1.2 million, the contribution per month is fixed at KHR 9,600 per employee.

The benefits or compensation that the NSSF provides to its members include:

• Medical treatment benefit
• Temporary disablement benefit
• Nursing benefit
• Permanent disablement benefit
• Constant attendance benefit
• Survivor’s benefit

Health care scheme

Employees in Cambodia are also entitled to the Health Care Scheme.

The contribution rate is 2.6%, all of which is covered by the employer.

The calculation of the Health Care Scheme contribution is the same as the Employment Injury Insurance Scheme. For employees with salaries over KHR 1.2 million, the contribution per month is fixed at KHR 31,200 per employee.

Types of employment contract

There are two types of employment contracts in Cambodia: the fixed duration contract (FDC) and the undetermined duration contract (UDC).

A FDC is for a fixed period of up to two years and may be extended once by agreement between the employer and the employee.

A UDC is a contract that does not have a fixed termination date.

Seniority Payments

Seniority payments must be made to employees on UDCs every six months. Employees must be paid 7.5 days of wages and benefits each June and each December.

Termination of employment

What is the notice period?

A notice period is required when an employer terminates the employee’s contract.

Fixed duration contract

For an FDC of more than six months up to and including a year, the employer must inform the employee about the contract’s expiration 10 days in advance.

If the contract has a duration of more than one year, the employee must be informed 15 days in advance.

If notice in advance is not given, the contract will be extended to the length of its initial duration or considered as a UDC.

Undetermined duration contract

The notice period for a UDC is as follows:

• Continuous service of less than six months – seven days
• Continuous service of six months to two years – 15 days
• Continuous service of two years to five years – one month
• Continuous service of five years to 10 years – two months
• Continuous service of more than 10 years – three months

Severance payment

If an employee is terminated without cause, the employer must provide severance payment as follows:

• FDC employees:
  • Severance pay of at least 5% of the salary
  • Compensation for accrued annual leave
  • Last unpaid salary
  • Damages equal to the wage and benefit the employee should be entitled to up to the expiration date of the contract
• UDC employees:
  • Compensation for accrued annual leave
  • Last unpaid salary
  • Two days of paid leave per week while the employee looks for a new job during the notice period
  • Seniority payment

Conclusion

Employers are required to follow regulations set out in Cambodia’s employment & labour law, which protects an employee’s rights. Contact Acclime for more information about human resources in Cambodia.