Definitive Guide to Hiring in Cambodia

Hiring in Cambodia

Hiring employees compliantly in Cambodia means doing it yourself or using an Employer of Record like Global Expansion. You should be careful using independent contractor agreements in Cambodia so that you don’t run afoul of employment laws. To hire an employee compliantly and offer them mandatory benefits and compliant agreements, you can:

(a) Establish your own new legal entity, banking, accounting and payroll service in Cambodia or

(b) use an Employer of Record like Global Expansion who can handle all of the details for you.

Labor Laws in Cambodia

Employee Probation Period

• Probationary periods of up to 3 months are allowed.

Annual Leave in Cambodia

• Employees are generally entitled to 1 1/2 days of annual paid leave for every month worked.
• This equals 18 working days for 12 months of service.
• After every 3 years of service, employees are entitled to an additional day of vacation per year.

Holidays in Cambodia

Here is the full list of public holidays in Cambodia:

Maternity Leave Cambodia

• Female employees who have worked for the employer for at least one year are generally entitled 90 days of leave at half of their normal salary

Paternity Leave Cambodia

• Fathers are entitled to one day of paid paternity leave.

Sick Leave in Cambodia

• Employees are generally entitled to up to 6 months of sick leave, with a doctor’s certificate, and are compensated as follows:
• 100% of wages during the first month of sick leave
• 60% of wages during the second and third months of sick leave
• unpaid leave from the fourth until sixth month

Working Hours in Cambodia

• In general, Cambodians work an 8-hour day and the workweek is no more than 48 hours.
• Employees should not be expected to work more than 9 hours per day

Overtime in Cambodia

• Employees may not work more than 2 hours of overtime per day.
• Overtime is compensated at 1.5 times the regular wage, or if performed at night, on a Sunday or holiday, at 2 times the regular wage.

Termination of Employment in Cambodia

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• Termination notice must be served in writing according to the following schedule:
  • Over 6 months’ service: 10 days
  • Over 1 year pf service: 15 days
• At the end of a fixed-term contract, employees are generally entitled to severance pay of at least 5% of the wages received during the contract.
• Employees with indefinite contracts receive severance pay based on their length of service, as follows:
  • for 6 to 12 months of service: 7 days’ wages
  • for each year of employment: 15 days’ wages, up to a maximum of 6 months of wages

Notice Period in Cambodia

• Termination notice must be served in writing according to the following schedule:
  • Over 6 months’ service: 10 days
  • Over 1 year pf service: 15 days

Severance in Cambodia

• At the end of a fixed-term contract, employees are generally entitled to severance pay of at least 5% of the wages received during the contract.
• Employees with indefinite contracts receive severance pay based on their length of service, as follows:
  • for 6 to 12 months of service: 7 days’ wages
  • for each year of employment: 15 days’ wages, up to a maximum of 6 months of wages

Cambodia Salary and Wages

13 / 14th Month Salary in Cambodia

• Yes (Mandatory)
• There is a statutory requirement to pay the 13th month salary.
• Other bonuses include can be given at the discretion of the employer.
• The 13th month is divided in to payments, one in June and one in December.

• Employers are required to make Occupational Risks Contribution (ORC) and payment for healthcare to the National Social Security Fund (NSSF).
• With regard to ORC, an employer with at least eight employees must register itself and all its employees with the NSSF.
• The employer is required to contribute ORC equal to 0.8% of the monthly average wage of an employee to the NSSF’s designated bank account.
• In addition to the NSSF contribution payment for occupational risks, the employer is also required to contribute, collect, and remit the contribution for healthcare to the NSSF on a monthly basis.
• Employers must contribute 2.6% to the NSSF for healthcare
  
  

Immigration Cambodia

• All foreign nationals who wish to work in Cambodia must obtain work permits from the Cambodian Ministry of Labor.
• To be eligible for a work permit, a foreigner must have a business visa. An employer who has established an office and registered with the Ministry of Labor in Cambodia is responsible for processing an application for the employee’s work permit.
• Work permits normally have an initial duration of one year.
• The two types of work permits are the temporary work permit and the permanent work permit.
• Temporary work permits are issued to the following foreigners:
  • Staff and management specialists
  • Technical staff
  • Skilled workers
  • Service providers or other laborers
• Permanent work permits are issued to the following foreigners:
  • Foreign immigrants recognized by the Ministry of Interior
  • Foreign investors, spouses and dependents recognized by the Council for the Development of Cambodia
• It takes one to three months to obtain an approval for a work permit.
• A work permit must be renewed every 12 months before its expiration.
• Before March of each year, an application to renew the work permit must be submitted to the Ministry of Labor together with the updated documents regarding the initial work permit submission.

Value Added Tax (VAT) in Cambodia

• VAT is charged at 10% on the value of the supply of most goods and services.
• Exported goods and services rendered outside Cambodia are zero-rated.
• In addition, 0% VAT applies to the supporting industries or contractors who directly supply goods (including milled rice) or services (including milled rice production services) to export-oriented garment, textile, footwear, bag, handbag, and headwear manufacturers, milled rice exporters, and domestic supplies of paddy rice.

Mandatory Benefits in Cambodia

• These are mandatory benefits as postulated by law
• These include probationary period, annual leave, public holidays, sick leave, maternity leave, paternity overtime pay, notice period, and severance pay
• Mandatory benefits also include social security benefits.

Payroll Accrual in Cambodia

Country Accruals Additional Information

Description

Employers are required to contribute 3.4% of the average monthly wage of workers to the National Social Security Fund (NSSF).

Payroll Accruals Additional Information

Accrued Benefits in Cambodia

Why use Global Expansion to hire in Cambodia

Establishing a branch office or subsidiary in Cambodia can be time-consuming, expensive and complex. With such a robust labor market in place, one must pay great attention to detail when structuring employment because Cambodia labor laws are complex.

The company also has a responsibility to comply with specific employment practices dictated by Cambodia law to maintain its good standing as an equal opportunity employer.

Global Expansion makes it easy for you to expand into Cambodia. We'll help you hire your candidate of choice, handle HR matters and payroll, and ensure that you comply with local laws without the burden of setting up a foreign branch office or subsidiary. In addition, you'll have complete control and direction over your employees.

We enable you to stay in control of everything. Our Cambodia Global Professional Employer Organization (PEO) and Employer of Record (EOR) solution provides you with peace of mind to focus on running your company and the security to enter new markets.