Employment laws in Cambodia

Employment laws in Cambodia play a vital role in creating a fair and structured work environment by outlining key aspects, including wages, working conditions, contracts, and termination. 

These regulations only protect employees’ rights in Cambodia and ensure access to benefits. They also provide businesses with a clear framework for operating in compliance and building productive relationships in the workplace.

However, navigating labor laws in Cambodia can be complex, especially for growing businesses. For instance, determining the percentage of employer and employee contributions across different social security schemes can often be complex and confusing for employers, especially when navigating multiple requirements and varying contribution rates under local regulations.

An Employer of Record (EOR) likePayoneer Workforce Management helps manage key tasks such as employment contracts, payroll, statutory contributions, and employee benefits in line with local regulations, making day-to-day operations more efficient.

In this guide, we will read about employment laws in Cambodia. 

Key employment laws in Cambodia

A range of key employment laws plays a crucial role in shaping Cambodia’s employment framework. Some of them are listed below:

• Labor Law of 1997: This is the most comprehensive law that serves as the backbone of the employment landscape in Cambodia. It covers all the aspects related to employee wages, contract types, working hours, leaves, termination rules, and so on.
• Law on Social Security: In Cambodia, a legal framework provides employees with a safety net through social security schemes administered by the National Social Security Fund. The three main schemes include the pension scheme, health scheme, and occupational injury scheme.
• Law on minimum wage: Cambodia has laws that specify a minimum wage for employees so that they are not exploited and can maintain a decent standard of living. This not only protects the dignity of employees but also enhances their productivity. 
• Law on health and safety of workers: Article 229 of the Labour Law of Cambodia specifies that workplaces must be maintained in a clean and hygienic condition. It further requires that working conditions be appropriate to prevent any risk of health hazards to employees. 
• Law against discrimination: Employers should make sure that there is no discrimination at the workplace on account of sex, race, creed, religion, birth, political opinion, social origin, membership of a workers’ union, etc. 

Contract employment laws in Cambodia

There are two types of employment contracts in Cambodia.

1. Fixed duration contract 

This type of employment contract has a specific date of termination. It is usually used for project-based work, for accomplishing a certain kind of task, or for temporarily replacing someone.

A fixed-duration contract should be documented in writing, and all terms of the employment must be clearly mentioned in the contract.

2. Indefinite period contract

An indefinite period contract continues till the agreement is dissolved by either the employer or the employee. Although the labor law does not oblige employers to provide a written employment contract to employees who are being hired for an indefinite period, it is advisable to keep the contract written to ensure accountability. 

Misclassification of employees may lead to serious consequences and penalties. Therefore, review contracts carefully to streamline compliance. 

Essential contract terms

An employment contract should include the following: 

• Name and address of the employer
• The employee’s name and personal information
• The role for which the employee is being hired and its description 
• The type of employment contract
• The date of commencement and conclusion of the contract (if any)
• The working hours, rest periods, leaves, and other statutory benefits to which the employee is entitled
• Information about the salary, pay scale, deductions (if any), and the payment method 

Minimum wage in Cambodia

You must pay employees at least $204 every month to ensure they can enjoy a decent standard of living and are not subjected to exploitation.

Working hours in Cambodia

The maximum working hours for employees in Cambodia are 8 hours, and they shall not work for more than 6 days a week. 

You have to provide employees with at least 24 consecutive hours of uninterrupted rest each week. This may either be granted on Sunday or any other day, so that the employee’s absence does not jeopardize the normal functioning of the organization.

Overtime laws in Cambodia

In case of urgency or excessive workload, you may require your employees to work overtime. However, the overtime hours must not exceed 2 hours per day. 

For overtime hours, you have to pay employees 50% higher rate than the normal working hours. If employees have to perform overtime at night or during a weekly time off, they are entitled to receive double their actual wage. 

Mandatory benefits

Here are a few mandatory benefits you have to provide when you hire in Cambodia:

• Social security: Cambodia ensures the well-being of citizens and employees through a social security scheme managed by the National Social Security Fund (NSSF). 
• Annual leave: Employees in Cambodia are entitled to a paid annual leave of one and a half days every month. This amounts to a total of 18 paid leaves per year.  
• Sick leave: In Cambodia, employees get sick leave for 7 days. If the leave exceeds this period, the employee has to furnish a medical certificate to the employer confirming that the sickness lasted for 8 consecutive days.
• Public holidays: 22 days in Cambodia are observed as public holidays. All workplaces remain closed on these days, and employees get paid time off. 

The list of public holidays in Cambodia is given below: 

• International New Year’s Day
• Victory Over Genocide Day
• International Women’s Day
• Khmer New Year (3 days)
• International Workers’ Day (Labour Day)
• Visak Bochea Day
• King Norodom Sihamoni’s Birthday
• Royal Ploughing Ceremony
• Queen Mother’s Birthday
• Pchum Ben (3 days)
• Constitution Day
• Commemoration Day of the King’s Father
• Coronation Day Of King Norodom Sihamoni
• Water Festival (Bon 0m Touk) (3 days)
• Independence Day
• Peace Day

• Maternity leave: Cambodia’s labor laws allow specific protection for employees experiencing motherhood. You are obliged to grant your female employees a maternity leave of 90 days. This aligns with the maternity leave laws of Thailand.
  
  During this period, you shall pay 50% of the wage to the employee. 
• Paternity leave in Cambodia: Employees get paid paternity leave in Cambodia for 7 days. 

Termination

As an employer, you must comply with certain rules as per the termination laws in Cambodia while terminating an employment contract. 

Types of termination scenarios 

The termination of an employment contract may be considered valid if the employment contract is dissolved under the following circumstances: 

1. If the employee resigns
2. If both you and the employee mutually decide to terminate the employment contract
3. If you terminate an employee while they are still in a probation period
4. If you terminate the employee on grounds of poor performance, misconduct, or absence without leave

Probation period 

You may keep an employee on a probation period in Cambodia of 180 days and assess their professional worth.

Notice period 

If you terminate an employee who is in a probation period, a notice period of 7 days should be observed. 

However, if you decide to dissolve an employment contract after the probation period is over, the notice period in Cambodia should be according to the tenure of the employee’s service. 

Have a look at the table below: 

Severance pay

If an employee, who was in a fixed-duration contract, is terminated, you have to pay severance pay in Cambodia equal to 5% of the total wages of the employee during the contract.

If you terminate an indefinite period contract, the employee shall be entitled to seniority allowance twice a year (in June and in December). 

Navigate employment laws in Cambodia with trusted support

Understanding the employment framework in Cambodia is essential for businesses looking to hire and manage global talent effectively. 

An Employer of Record, such as Payoneer Workforce Management, can simplify this process by helping you handle local employment responsibilities and reducing the burden on internal teams.

From managing employment agreements to handling payroll, benefits, and employee lifecycle processes, such solutions enable businesses to operate more smoothly while navigating the country’s regulatory landscape with greater ease. 

Book a demo today with experts!

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