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Staff Recruitment in Cambodia

Cambodia offers a young working population and more than 60% of the 16 million people are of working age. A key problem faced by foreign firms in Cambodia, however, is being able to recruit workers at the right skill level, with around half of those employed receiving only primary education. The Cambodian government has recognised this issue and is committed to improving the skills of Cambodian nationals, as set out in its first labour policy entitled the National Employment Policy (NEP) 2015-2025. Aside from improving the skills of its nationals, the Cambodia government permits employment of foreign workers, particularly for managers, technicians and skilled workers, if the required qualification and expertise are found not available in Cambodia.

The Ministry of Labour and Vocational Training (MLVT) is the official entity in charge of labour and employment. Cambodia’s Labour Law (1997) governs relations between employers and workers arising from employment contracts made within Cambodia. The key points on Cambodia’s labour law include:

  • All employers shall make a written declaration to the MLVT when establishing a company or business entity. Every employer must also make a declaration when hiring or dismissing, made in writing within 15 days at the latest after the date of hiring or dismissal.

  • Every employer of a company or business entity which employs at least eight workers must establish a set of internal regulations.

  • The working week is fixed at 48 hours per week and the minimum age of employment is 15 (or 18 in some cases).

  • Monthly minimum wage in 2017 is KHR612,000 (about US$153).

Social security rights are governed by the Law on Social Security Schemes (2002), which stipulates a mandatory social security system for private sector employees consisting of:

  • Employment Injury Insurance (EII) – provides coverage for work-related accidents and illnesses. This is the only social security right that has currently been implemented by the Government and payment is made to the National Social Security Fund. Current monthly contribution rates vary between KHR1,600 (US$0.4) to KHR8,000 (US$2).

  • Health Insurance Scheme – details on the timing and benefits of the governmental health coverage have not yet been determined. However, there is a pilot voluntary health insurance scheme for salaried workers in the garment industry. For participating factories the cost is estimated at US$1.6 per month per insured worker.

  • Pension Scheme – both workers and employers will contribute to support the pension fund. Similar to the EII, the pension scheme will be compulsory and will apply to all employees covered under the National Labour Law

For further information on these schemes, it is recommended to visit the National Social Security Fund website.

Workers in Cambodia are free to join trade unions, and the country’s union participation has increased significantly since the early 1990s. The Cambodian Federation of Employers and Business Associations (CAMFEBA) is the arch trade union officially recognised in Cambodia, while there are a number of minority trade unions. MLVT figures estimate that there were more than 3,000 trade unions in Cambodia in 2015, which was instrumental to the subsequent enactment of the Trade Union Law in May 2016, under which union formation and financial reporting requirements are outlined. Benefits aside, there remain concerns over this Law meeting the standards as set by organisations like the International Labor Organisation (ILO).

 

A Practical Guide to Doing Business in Cambodia

  1. Regulatory Environment
  2. Establishing a Presence
  3. Intellectual Property Protection
  4. Staff Recruitment
  5. Tax Considerations
  6. Import/Export Procedures
  7. Further information


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