Overview of Recent Amendments
Cambodia's Labor Law framework continues to evolve as the government modernizes employment protections and aligns with ILO standards. Employers operating in Cambodia — whether through wholly foreign-owned entities, joint ventures, or representative offices — must stay current with these changes to avoid administrative penalties and labor disputes.
Minimum Wage Changes
The National Council on Minimum Wage conducts annual reviews of the garment and footwear sector minimum wage. For 2025, the minimum wage for garment workers has been adjusted. Beyond the garment sector, Cambodia does not yet mandate a universal minimum wage across all industries, though sector-specific floors continue to expand.
Employers in non-garment sectors typically negotiate wages directly with employees, but should benchmark against sector norms to avoid high staff turnover and potential labor inspection findings.
NSSF Contribution Updates
The National Social Security Fund (NSSF) covers occupational risk, healthcare, and pension schemes. Current contribution rates that employers must be aware of:
- Occupational Risk: 0.8% of gross salary (employer contribution only)
- Healthcare: 2.6% of gross salary (employer: 1.3%, employee: 1.3%)
- Pension Fund: 4% of defined contribution base (employer: 2%, employee: 2%)
NSSF registration and monthly contribution filing must be completed by the 15th of the following month. Late contributions attract a 2% per month penalty.
Employment Contract Requirements
The Ministry of Labor Prakas requires that all employment contracts be in writing in Khmer language (with a translated version as needed) and specify:
- Position, duties, and place of work
- Duration (fixed-term contracts cannot exceed two years and are renewable once)
- Working hours and overtime arrangements
- Base salary and allowances
- Leave entitlements
- Termination conditions and notice periods
Contracts that do not include these elements may be deemed indefinite-term contracts by default, with corresponding implications for severance and termination rights.
Annual Leave and Public Holiday Entitlements
- Annual leave: 1.5 days per month of service (18 days per year after 12 months)
- Public holidays: Currently 27 official public holidays per year in Cambodia
- Sick leave: Up to 1 month paid for ordinary illness with medical certificate; additional months at reduced pay for extended illness
Termination and Severance
For indefinite-term employees, termination requires:
- Written notice (1–3 months depending on seniority)
- Severance pay at termination (varies: 7.5 days per year of service for the first 5 years, scaled up thereafter)
- Separation indemnity for employees terminated without cause
EP Partners' legal compliance team assists clients with employment contract drafting, NSSF registration, payroll compliance reviews, and representation in labor dispute proceedings. Contact us for a consultation.