Key Factors to Consider When Employing in Cambodia:
There are several key areas to be aware of within Cambodia’s employment regulatory framework, especially for companies that plan to initiate a full local office and human resources department. These challenges can be mitigated by use of a locally sourced payroll provider who is familiar with all of the local laws and rules for both local employees as well as foreign nationals.
In Cambodia, employment relationships between an employer and employee can be governed either by oral or written contract. There are two types of contract – Fixed Duration Contracts (also referred to as Specific Duration Contracts), and Undetermined or Unfixed Duration Contracts. The former must be made in writing, otherwise it becomes an unfixed duration contract. Contracts made for a specific duration cannot be made for a period exceeding two years, and may be renewed within this two year limitation. After the two years, the contract becomes an undetermined duration contract.
Working on Sundays
100% overtime pay is required if employees are requested to work on Sundays.
Disclosure and Confidentiality of Personal Information
Employees are protected from disclosure of personal information.
Employee Protection and Anti-discrimination Rights
The law provides that employers are required to protect employees from discrimination and sexual harassment, although it does not set out penalties if employers fail to do so.
Time Off Work
Full time employees, who work 48 hours a week, are entitled to 1.5 days of annual leave for one month of service. Payment of the wages during annual leave is required to be made before the worker takes their leave. This is organised individually with the employer.
Workers are entitled to up to 6 months sick leave if medical certification is provided by a qualified doctor. For the first month, the employee is entitled to 100% of wages, then 60% for the second and third months, and unpaid leave for the fourth to sixth months.
Employers are entitled to dismiss workers after more than 6 months sick leave.
Annual Leave Accrual Entitlement
A minimum of eighteen days leave with pay is stipulated by law. There is also paid leave for public holidays on New Years Day, Victory Day, Khmer New Year, King’s Birthday and various other holidays.
Maternity Leave in Cambodia
Female employees are entitled to not less than 90 days at half their regular wage. Some companies allow workers to have a monthly medical check up during their pregnancy by using their annual leave, for up to 5 pre-natal check ups.
Severance / Redundancy Pay
Severance pay is as follows:
- 7 days wages for employment from 6-12 months; and
- 15 days wages for every year of employment (up to a maximum of 6 months wages)
Termination of Employment
Only under very specific circumstances may an employment contract be terminated. These are:
- When the contract has expired or is otherwise completed
- With both parties’ consent
- In the event of serious and/or willful misconduct
- At the will of each party.
If one party unilaterally terminates an employment contract, the notice period set forth by employment law must be adhered to. They are as follows:
- Contracts less than 6 months: 7 days notice required
- Contracts more than 6 months: 10 days notice required
- Contracts more than 1 year: 15 days notice required
- Employee service between 2-5 years: 1 month notice required
- Employee service between 5-10 years: 2 months notice required
- Employee service more than 10 years: 3 months notice required
Probationary periods must be separately accounted for within a probationary contract, which can be of a term from between 1 and 3 months.
Pension and benefits have not yet been formally implemented in a scheme for Cambodians, but it is common practice for them to be regulated internally by some companies.