Cambodia or the Kingdom of Cambodia is located on the south of the Indochina Peninsula and borders the Gulf of Thailand. The country’s GDP is $59 billion (PPP) which grew at an annual rate of 6.9% in 2016 and the rate has been nearly 7% during most of the last decade. Foreign trade is critical to the economy of Cambodia as the combined value of imports and exports equals 125% of its GDP. The country’s export trading mainly revolves around footwear, textiles, vehicles, fish, and natural rubber.
Currency: Cambodian Riel
Principal Language: Khmer
Government: Parliamentary System, Constitutional Monarchy, Unitary State
Capital City: Phnom Penh
Major Cities: Ta Khmau, Battambang, Serei Saophoan, Siem Reap
Employment contracts in Cambodia can be for a fixed or indefinite term. Fixed contracts need to be in writing while indefinite contracts may be verbal or written. The 3 main elements of a fixed period contract are:
- A contract in writing
- Specifies start and expiry dates, and
- The duration including renewals is not more than 2 years.
When any of these elements is missing, a contract is deemed to be for an indefinite period.
Providing written employment contracts is a common practice in Cambodia, in Khmer, which specifies the conditions relating to employee’s compensation, benefits, and dismissal. In Cambodia, the offer letter and employment contract should specify the salary and compensation amounts in Riel instead of foreign currency.
The general work schedule in Cambodia comprises 8 hours per day, and the workweek cannot be more than 48 hours. Employees are not expected to work more than 9 hours, and they should not work longer than 2 hours of overtime daily.
Compensation for overtime is at 1.5 times the regular rate, and when performed at night, on a holiday or Sunday, at 2 times the regular rate.
Cambodia observes the following 19 public holidays:
- International New Year Day
- Victory Over Genocide Day
- Meak Bochea Day
- International Woman’s Day
- Khmer New Year (3 Days)
- International Labor Day
- King Birthday (3 Days)
- Visak Bochea Day
- Royal Plowing Ceremony
- Children’s Day
- King Mother’s Birthday
- Constitutional Day
- Phum Ben Day (3 Days)
- The commemoration of Former King Norodom Sihanouk
- Paris Peace Agreement Day
- King’s Coronation Day
- Independence Day
- Water Festival (3 Days)
- International Human Rights Day.
Mostly, employees are entitled to 1½ days of paid leave annually for every month of work. After completing every 3 years of service, employees get an additional vacation day per year.
Female employees who have completed minimum 1 year of work for their employers are eligible for 90 days of leave at 50% of their regular salary.
Employees are usually entitled to sick leave for up to 6 months, and are compensated as follows:
- 100% of remuneration for the 1st month of sick leave
- 60% of remuneration for the 2nd and 3rd months of sick leave
- Unpaid leaves from the 4th until the 6th month.
National Social Security Fund
The Social Security plans are under the management of the National Social Security Fund (NSSF), which is the public establishment that provides benefits to the following:
- Workers whom the provisions of the Labor Law declare eligible if they work in the territory of the Kingdom of Cambodia to provide service or benefit to one or more employers
- Those public workers, state workers and every other who is not covered under the laws that benefit civil servants and diplomats, as well as temporary public officials
- Trainees and apprentices attending a rehabilitation center
- Self-employed professionals, and
- Occasional or seasonal workers
Employers and employees listed above need to pay a mandatory contribution to NSSF.
The pension benefits that the NSSF provides include old age pension with allowance, survivors’ pensions and allowance, and invalidity pension. NSSF members aged 55 years are eligible to old age pension if they fulfill the following conditions:
- To be registered with NSSF for a minimum period of 20 years
- To pay contributions for at least 60 qualifying months towards Social Security Schemes for a minimum period of 10 years, up to the date of the eligibility.
All the NSSF members who have fulfilled such conditions can request a pension even before the age of 55 if they can prove that they have lost their earning capacity. Every 55 or more years old NSSF member who has made at least 60 contributions to Social Security Schemes and has completed all wage-related works, but has not fulfilled other important conditions to qualify for old age pension is eligible for old age allowance which is paid as a lump sum.
Occupational Risk Coverage
An employee meeting with an accident is considered to be an employment-related injury, if it happens at work or during working hours, regardless of the person who was at fault. Equally, accidents that occur with workers during their direct commute from their residence to the workplace are also considered to be employment injury.
An occupational disease also comes under the purview of occupational risk. The Health and Social Security Ministers issue a Joint list identifying the occupational disease list with a list of employment that involves physical work, exposure to toxic substances and other employment performed under hazardous conditions.
Benefits for occupational risk are as follows:
- Medical services for occupational risk caused by injury due to employment injury or an accident while commuting or occupational diseases whether the accident stops the work or not
- Daily allowance on account of employment injury or occupational diseases or commuting accident that cause temporary disability
- Allowance for injury or disability on account of a commuting accident or occupational disease that led to permanent disability
- Survivors’ pension and funeral benefits.
The daily allowances to a temporarily injured employee are provided only till the employee recovers from the injury. The daily wage of the worker to compensate for the first day of absence is payable by the employer.
How GPS can Help
With our Global PEO/Employer of Record services, companies can expand into Cambodia and hire their employees without having to establish a branch office or subsidiary in Cambodia.
- Your candidate is hired via our Cambodia PEO. If needed, we can also help you find the right talent in any country with our comprehensive global staffing services.
- Your new employee begins work quickly as we take care of employment contracts, statutory and non-statutory benefits, and running their payroll - all in full compliance with Cambodia laws.
- Global PEO Services experts manage all day-to-day operational issues such as employee expenses, and severance/termination if required.
- With no contractor risks, pass on the compliance burden to Global PEO Services.
Spin Off/M&A Support
- Ensure continuity of payroll, benefits and HR support when acquiring or spinning off a business with employees overseas.
24/7 Support in 100+ Countries
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With our Global PEO, you get access to Mihi, our proprietary SaaS solution for time and attendance, vacation, leave management and benefits enrollment and management. Mihi enables clients to have easy access to employee data in real time. It is designed specifically for companies with a global workforce, especially when working in multiple countries with low headcount.
Ready for Growth When You Are
When ready, we can seamlessly transition you from the PEO/EOR model to your own legal entity and provide ongoing international HR, finance, legal, compliance and staffing support. Learn more about our end-to-end international expansion services.