Table of Contents

Cambodia

Table of Contents

Currency

Cambodian Riel (KHR)

Payroll Frequency

Monthly

Employer Taxes

3.40%

About Cambodia

Cambodia is a South East Asian country surrounded by the Gulf of Thailand, Vietnam, Laos, and Thailand. It has natural resources in hydropower, minerals and fertile land. Cambodia is a kingdom with a parliamentary constitutional monarchy. Most Cambodians (about 96.6%) speak Khmer, which is the official language and practice Buddhism. Cambodia experienced a steady average economic growth of 7 percent since 2012, with a real GDP growth rate reaching 6.9% in 2017. This growth was influenced by construction activity, high public spending and a boost in tourism.

Cambodia still largely depends on international aid from countries such as China. Services comprise the largest share of GDP at 43.5 percent. Tourism, specifically gambling and betting services, include the largest share, followed by the industry sector at 32.8 percent. This includes tourism, the garment industry, construction and rice milling, among many others. Agriculture represents the remaining 25.3 percent, producing rice, rubber, and corn, vegetables and cashews.

Employment Relationship

• Permanent Employment

In Cambodia, the Labor Code defines regular or permanent workers as those who regularly go to work for an indefinite period. Every employee of Cambodian nationality needs an employment card. Employers are not permitted to hire persons who do not comply with this requirement. The contract for permanent employment may include a clause for a probation period of up to 3 months.

• Fixed-Term or Specific-Purpose Contracts

Fixed-term labor contracts must include a finishing date and may not exceed 2 years. They can be renewed up to a total maximum duration of 2 years. Any violation results in the contract becoming permanent. Short-term agreements for daily or hourly workers, however, are considered fixed contracts with unspecified dates and can be renewed at will as many times as needed. All fixed contracts must be in writing, otherwise, they become permanent.

• Temporary Employment Contratcs

The Labor Code of Cambodia defines casual employees as individuals who are hired to perform temporary or seasonal jobs, or to perform specific work within a short timeframe. They may also be employed to replace a temporarily absent employee.  Temporary employment agreements are made in writing. Contracts without a precise termination date can be renewed at will as many times as necessary without losing their validity.

Probationary Period

A probationary period allows the employer to determine the professional aptitude level of the employee and for the employee to better understand the conditions of employment. The maximum probationary period depends on the type of employee: Permanent employee –  3 months Specialized fixed-term worker –  2 months Non-specialized worker – 1 month

Working Hours

Employees are required to work for a maximum of 8 hours per day, 48 hours per week, with 1 rest day per week. It is prohibited to employ a person for more than 6 days in a week. Working hours cannot exceed 10 hours per day in case of overtime. Employers can divide a work schedule into 3 shifts (morning, afternoon, and night) with each shift not exceeding the maximum of 8 hours daily. An employee can work for more than 1 shift per day provided that the duration of all daily work shifts does not exceed the total mandated number of working hours per day. 

Holidays / PTO

• Statutory Holidays

International New Year Day – January 1 7-Jan Victory over Genocidal Regime Day; 11-Feb Meak Bochea Day; 8-Mar International Women's Day; April 14, 15, 16 Khmer New Year Day; 1-May International Labor Day; 10-May Visak Bochea Day; May 13, 14, 15 King's Birthday, Norodom Sihamoni; 14-May Royal Plowing Ceremony; 1-Jun International Children's Day; 18-Jun King's Mother Birthday, Norodom Monineath Sihanouk; September 19, 20, 21 Pchum Ben Day; 24-Sep Constitutional Day; 15-Oct Commemoration Day of King's Father, Norodom Sihanouk; 23-Oct Paris Peace Agreements Day; 29-Oct King's Coronation Day, Norodom Sihamoni; November 02, 03, 04 Water Festival; 9-Nov Independence Day; 10-Dec International Human Rights Day.

• Paid Annual Leave

Employees must receive paid annual leave of 1.5 days per month, for a total of 18 days per year (increasing by 1 additional day for every 3 years of continuous service). The entitlement to annual leave becomes effective after 1 year of service. Paid holidays and sick leave do not count as paid annual leave. Any collective agreement providing compensation in place of paid leave, or waiving the right to paid annual leave, is void. Acceptance by the employee to postpone all or part of their rights to paid leave until the termination of the employment agreement is not considered as renunciation. Postponement of this leave cannot exceed 3 consecutive years and can only apply to leave exceeding 12 days per year.  

• Sick Leave

Employees are entitled to sick leave for up to 6 months if the sickness is certified by a licensed doctor. The employer may dismiss the employee if sick leave extends beyond 6 months. The Labor Code does not have regulations on paid sick leave; however, employers may provide paid sick leave through internal work regulations. An example of sick leave pay is as follows:  100% of wages during the first month of sick leave 60% of salary during month 2 and 3 of sick leave Unpaid leave during month 4, 5 and 6

• Maternity Leave

Female employees in Cambodia are entitled to a maternity leave of 90 days, with 50% of their wages paid by their employer. There is no restriction on whether the leave must start before or after childbirth. It is prohibited to lay off women in the workforce during their maternity leave or at a date when the end of the notice period would coincide with the maternity leave. During leave, female employees are entitled to 50% of their wages, including perquisites, paid by the employer, as well as any other benefits in kind they were entitled to. 

• Paternity Leave

The law does not have regulations explicitly related to paternity leave; however, it offers a provision for special paid leave of up to 7 days for events that directly affect an employee's immediate family. This leave is deducted from the annual leave. If the employee has used the entire annual leave for the year, the employer cannot deduct the special leave from the employee's annual leave for the next year.

Termination of Employment

• Notice Period

For permanent employment contracts, the minimum notice period ranges from 7 days to 3 months, depending on the length of service. Notice period is not required for termination during probation or due to gross misconduct. During notice period, employees have a right to 2 fully paid days, at regular rates, per week to look for a new job. For fixed-term contracts between 6 months and 1 year, the employer must give notice at least 10 days prior to the expiration date. If a fixed-term agreement is over 1 year, the organization must give notice at least 15 days before the expiration date. Failure to provide prior notice to the employee will result in the renewal of the fixed-term agreement for a duration equal to the original contract.

• Severance Benefits

Seniority payment is calculated as 15 days' wages and benefits per year of service, paid in 2 installments every year, limited to a maximum of 6 months' wages and benefits. In case of termination, the employer must pay at least 7 days' wages and benefits per year of service for the remaining year. Persons dismissed due to gross misconduct are not eligible to receive any severance pay.  Employees under fixed duration contracts are entitled to severance pay of at least 5% of the total wages during the term of the contract.