Expanding into
Cambodia

Employment contracts in Cambodia may be written or verbal and must contain information regarding the job including work hours, remuneration, and work conditions. In some instances, the contract may need to be registered. Employment contracts for a fixed term must be in writing and specify the start and end date of employment. The initial term of a fixed term contract cannot exceed two years but fixed term contracts can be renewed. A renewal cannot be longer than two years, and the maximum duration of a fixed term contract (including renewals) cannot exceed four years. The total duration of a fixed term contract can be extended if there is a one-month break between the end of one fixed-term contract and the start of a new one. If the renewal of a fixed contract extends beyond two years or the total duration of the contract including renewals extends beyond four years, then the contract is converted to an indefinite period contract. If a fixed term contract concludes and the employee continues that work, a one-month grace period applies. If after that month grace period, another fixed term contract has not been drafted and signed, the old, fixed term contract automatically converts to an indefinite period contract. Employers may perform pre-employment background checks, including criminal record checks and employment verification. A medical examination may also be required.

The standard workweek is 40 hours. Night work occurs between 10 p.m. and 6 a.m. and there are 12 hours of rest between each night of work. Female employees and children cannot The standard work period in Cambodia is eight hours a day and 48 hours a week. Employees are entitled to at least one day, or 24-hour period, off per week. This is commonly taken on Sunday. The maximum overtime allowed is two hours a day. Employees are entitled to 150% of the basic rate for overtime worked. This is increased to 200% of the basic pay if the overtime is worked at night, on Sunday or on a public holiday. Employers are required to get permission from the Ministry of Labour to schedule overtime. Night work performed for at least 11 consecutive hours, including the hours between 10 p.m. and 5 a.m., is paid at a rate of 130% of the normal rate during the day.

Employees receive up to six months of sick leave with a certificate from a doctor. Employees on sick leave receive 100% of their salary during the first month, 60% during the second and third months and no salary in the fourth through sixth months. Employers are permitted to request a medical certificate certifying the necessity for sick leave for the requesting employee. An employer can dismiss an employee on sick leave in excess of 6 months.

Female employees are entitled to 90 calendar days of maternity leave. Employees with at least one year of service receive 50% of their salary. Female employees also receive two paid nursing breaks of 30 minutes each until the child is 12 months old. Male employees may request up to seven days of leave to get married, for the birth or marriage of a child, or illness of a spouse, child or parent. The leave may be deducted from the employee’s annual leave or, if the employee has already exhausted annual leave, the employer may require the employee to work to make up the hours. Cambodia does not require employers to provide parental leave.

The minimum wage in Cambodia varies for employees in the textile, garment and footwear industry. Employers are required to pay full-time employees paid by the piece at least the minimum wage amount. Employees also receive additional benefits for regular attendance, transportation and rent. Employers are required to pay a seniority bonus of 15 days of wages annually to employees continuously employed for the last six months, or seven and a half days for employees with less than six months service. The bonus applies to employees with contracts that do not have a fixed end date. This is referred to as the “seniority bonus” or the seniority indemnity payment. The seniority bonus replaced the severance, or dismissal indemnity, in Cambodia. The bonus is paid twice a year in June and December. Employers are not required to pay the seniority bonus to employees who resign or are terminated for serious misconduct. Employees on a fixed term contract do not receive the seniority bonus but may be entitled to severance.

In addition to public holidays, employees receive annual leave based on the number of work hours and length of service. Full-time employees receive 1.5 days off per month after one year of service, or 18 days per year. Part-time employees, those working less than 48 hours per week, receive leave on a pro-rata basis. This means employees working 40 hours per week receive 1.25 days a month or 15 days a year, employees working 24 hours a week receive 0.75 days per week or nine days a year. Employees are entitled to one extra day of leave for every three years of service. Employees with one to three years of service are entitled to 18 days of leave a year. Employees with four to six years of service are entitled to 19 days of leave. Employees with seven to nine years of service are entitled to 20 days of leave. Employers are required to pay employees in advance of taking vacation leave.

• International New Year Day
• Victory Over Genocide Day
• International Woman’s Day
• National Day of Remembrance
• International Labor Day
• King Sihamoni’s Birthday
• Queen Mother’s Birthday
• Constitutional Day
• Pchum Ben Day (three Days)
• The commemoration of Former King Norodom Sihanouk
• King Norodom Sihamoni’s Coronation Day
• Independence Day
• Bon Om Touk (Water Festival)

Cambodia is transitioning to a universal health care system. Employers may offer healthcare benefits.

Termination of employment can occur during the probation period, at the end of the contract term (if a fixed-term contract), by the employer (with or without cause) or by the employee. Employment may be terminated without notice by the employer or employee during the probation period. The probation period in Cambodia is:

• Three months for regular employees
• Two months for specialized employees
• One month for unskilled employees

An employee can terminate employment without notice for serious misconduct by the employer. Serious misconduct includes failure to pay insurance, not paying or delaying salary, directly or indirectly threatening employee. Likewise, employers may terminate employment without notice for serious misconduct by the employee, including stealing, misappropriation, fraud, sabotage and breach of confidentiality. Fixed-term contracts will terminate at the end of the contract period unless renewed. Employers may need to notify employees if they intend to renew the contract or let it expire. If the length of the contract is less than six months, no notice is required. The notice period is 10 days for contract terms that are at least six months but less than a year, and 15 days for contract periods of one to two years. If no notice is provided, the contract will renew for the same period. Absent a fixed contract or cause or outside the probation period, an employer must have a reason for terminating the contract and provide notice to the employee. This can include termination for performance, behaviour or for economic reasons. The notice period depends on the employee’s length of service:

• Seven days of notice for employees with six months or less of service
• 15 days of notice for employees with six to 24 months of service
• One month of notice for employees with two to five years of service
• Two months of notice for employees with five to 10 years of service
• 3 months of notice for employees with more than 10 years of service

Employers may provide pay in lieu of notice. Employees are entitled to two paid days of leave each week during the notice period to look for work. Employees are entitled to severance pay on termination of a fixed term contract.