Cambodia is a popular destination for foreign investors, and as a result, there are many job opportunities for both Cambodian citizens and foreign nationals. However, hiring foreign employees in Cambodia can be a complex process, with various legal and administrative requirements that employers must meet.
If you’re considering hiring foreign employees in Cambodia, it’s important to understand the eligibility criteria, procedures for obtaining work permits and visas, and the benefits and challenges of employing foreign nationals. Here’s what you need to know:
Requirements and Eligibility for Foreign Employees in Cambodia
Foreign nationals who wish to work in Cambodia must meet certain requirements and eligibility criteria. These include:
- Holding a valid passport or travel document
- Being of legal age (18 years or older)
- Possessing the necessary skills and qualifications for the job
- Not having a criminal record or being on a blacklist
- Passing a medical examination (for certain types of work)
In addition, some types of employment are restricted to Cambodian citizens only. These include domestic work, unskilled labour, and jobs in certain sectors such as agriculture, forestry, and fisheries.
Procedures for Obtaining Work Permits and Visas
Employers must obtain a work permit for each foreign employee they hire. The work permit is issued by the Ministry of Labour and Vocational Training (MLVT) and is valid for one year.
To obtain a work permit, the employer must submit an application to the MLVT, along with supporting documents such as the employee’s passport, qualifications, and medical certificate. The application must also include details of the job, including the salary, job description, and employment contract.
Once the work permit has been issued, the employee must apply for a visa at the nearest Cambodian embassy or consulate. The type of visa required will depend on the length of stay and the purpose of the visit.
Types of Visa in Cambodia
When it comes to working and living in Cambodia, there are different types of visas that foreign nationals need to be aware of. Here are some of the common types of visa in Cambodia:
- EP visa: EP visas are issued to foreign nationals coming to Cambodia to look for a job, start a business, or remain in the country after their initial 30-day stay under the E-class visa expires.
- EG visa: The general visa that applies to those searching for employment. It can last one, three, or six months.
- ER visa: An ER visa is for those looking to retire in Cambodia. They must show documentation of retirement in their home country and prove they can financially support themselves.
- ES visa: A visa issued to students going to a school or university in Cambodia. Holders can extend it indefinitely as long as they can provide a letter from a registered Cambodian school and show they can financially support themselves.
- ET visa: This is the technician visa extension, meant for those who work in specific trades or industries.
It’s important to note that the visa requirements and regulations in Cambodia can change, so it’s best to consult with the relevant authorities or a legal professional to ensure that you have the right type of visa for your situation.
The Benefits and Challenges of Hiring Foreign Employees
Hiring foreign employees can bring many benefits to a company, such as access to a wider pool of talent, international expertise, and language skills. However, it can also present challenges such as language barriers, cultural differences, and the need for additional administrative and legal processes.
To overcome these challenges, it’s important to have clear communication channels, provide cultural training and support, and ensure that all legal and administrative requirements are met.
Understanding Leave Entitlements for Employees in Cambodia
In Cambodia, employees are entitled to various types of leave, including paid leave, paid holidays, sick leave, and maternity leave. Here’s what you need to know about each type of leave:
Paid Leave
Under Cambodia’s Labour Law, all employees are entitled to 1.5 days of paid leave per month of employment. This right is acquired after one year of service. For every three years of continuous service, employees are entitled to one extra day of paid leave.
When an employee’s labour contract is terminated, they are entitled to compensation for any paid leave they have not used, calculated in proportion to the amount of time they have worked in the enterprise.
| Years of Service | Leave Per Year |
|---|---|
| 1-3 | 18 |
| 4-6 | 19 |
| 7-9 | 20 |
Paid Holidays
Employees in Cambodia are entitled to paid days off during festivals, memorials, and religious holidays. The government announces the holidays every year. If a public holiday falls on a weekend, employees are given a day off on the next working day. There are approximately 21 paid holidays in 2021.
Weekly Day-Off
By law, all employees in Cambodia must receive at least one full day off per week, usually on a Sunday. It is prohibited to have the same employee work for more than six days a week.
If having all the staff taking Sunday off affects the operation of the company, companies can choose from the following conditions:
- Give the staff a day off on another day other than Sunday.
- Have the staff rest from Sunday noon to Monday noon.
- Give the staff a rest by rotating all the staff.
Sick Leave
Employees in Cambodia are entitled to sick leave when they provide certification from an authorized hospital and legally recognized doctor verifying the employee’s illness. Although paid sick leave is not provided for in the Labour Law, the Ministry of Labour has issued guidelines that sick leave should be paid according to the following table:
| Number of Months of Sick Leave | Percentage to be Paid |
|---|---|
| One month | 100% |
| Two to three months | 60% |
| Four months or more | No wage paid |
Maternity Leave
Expecting mothers are entitled to 90-day maternity leave with pay after working for one continuous year. The 90-day period includes weekends and public holidays. If the employee has not completed one year of work, she will be entitled to maternity leave without pay.
Employees are entitled to 50% of their normal wages and benefits during maternity leave.
Navigating Working Hours in Cambodia
In Cambodia, the normal working hours are eight hours a day and 48 hours a week. Here’s what you need to know about overtime work, night work hours, and employer obligations related to working hours:
Overtime Work Hours
If employees are required to work overtime, including regular work hours, it must not exceed 10 hours a day, and employees can choose whether they want to work overtime or not. Employers must receive permission from the Ministry of Labour and Vocational Training before having employees work overtime, and overtime is limited to two hours a day.
Employers must pay at least 150% of the employee’s wage if the work is performed on normal working days and 200% if work is done between the hours of 10pm and 5am.
Night Work Hours
According to article 144 of the Labour Law, night work is defined as at least 11 consecutive hours, including the interval between 10pm and 5am. Night work is paid at a rate of 130% of the hourly wage paid during the day. If overtime work is required at night, it is paid at a rate of 200% of the employee’s salary during the day.
Employer Obligations
If employees are required to work at night, employers must provide accommodation or transportation. Employers must also ensure that employees receive at least one day off per week and that the same employee does not work for more than six consecutive days. Additionally, employers must provide break and rest periods for employees during the workday.
Understanding the National Social Security Fund (NSSF) in Cambodia
The National Social Security Fund (NSSF) in Cambodia covers all companies with any employees, including employees defined by the provisions of the Labour Law, trainees, apprentices, individuals attending the rehabilitation centre, seasonal or occasional workers.
Employment Injury Insurance Scheme
Under the Employment Injury Insurance Scheme, employers must pay 0.8% of the assumed wage of the employee’s monthly salary before taxation. Employers must pay this amount because any employee’s injury is considered to be the employer’s responsibility as they create jobs for employees and, at the same time, create an occupational risk.
The minimum monthly salary to calculate the contribution is KHR 200,000, and the maximum is KHR 1.2 million. For employees with salaries over KHR 1.2 million, the contribution per month is fixed at KHR 9,600 per employee.
The benefits or compensation that the NSSF provides to its members include medical treatment benefits, temporary disablement benefits, nursing benefits, permanent disablement benefits, constant attendance benefits, and survivor’s benefits.
Health Care Scheme
Employees in Cambodia are also entitled to the Health Care Scheme, which is covered entirely by the employer at a contribution rate of 2.6%.
The calculation of the Health Care Scheme contribution is the same as the Employment Injury Insurance Scheme. For employees with salaries over KHR 1.2 million, the contribution per month is fixed at KHR 31,200 per employee.
| Monthly Wage (KHR) | Assumed Wage (KHR) | Contribution (KHR) (2.6%) |
|---|---|---|
| 0 – 200,000 | 200,000 | 5,200 |
| 200,001 – 250,000 | 225,000 | 5,850 |
| 250,001 – 300,000 | 275,000 | 7,150 |
| 300,001 – 350,000 | 325,000 | 8,450 |
| 350,001 – 400,000 | 375,000 | 9,750 |
| 400,001 – 450,000 | 425,000 | 11,050 |
| 450,001 – 500,000 | 475,000 | 12,350 |
| 500,001 – 550,000 | 525,000 | 13,650 |
| 550,001 – 600,000 | 575,000 | 14,950 |
| 600,001 – 650,000 | 625,000 | 16,250 |
| 650,001 – 700,000 | 675,000 | 17,550 |
| 700,001 – 750,000 | 725,000 | 18,850 |
| 750,001 – 800,000 | 775,000 | 20,150 |
| 800,001 – 850,000 | 825,000 | 21,450 |
| 850,001 – 900,000 | 875,000 | 22,750 |
| 900,001 – 950,000 | 925,000 | 24,050 |
| 950,001 – 1 million | 975,000 | 25,350 |
| 1,000,001 – 1.05 million | 1.025 million | 26,650 |
| 1,050,001 – 1.1 million | 1.075 million | 27,950 |
| 1,100,001 – 1.15 million | 1.125 million | 29,250 |
| 1,150,001 – 1.2 million | 1.175 million | 31,200 |
Understanding the Types of Employment Contracts in Cambodia
There are two types of employment contracts in Cambodia that employers and employees should be aware of: the fixed duration contract (FDC) and the undetermined duration contract (UDC).
The FDC is a contract that is valid for a fixed period of up to two years and may be extended once by agreement between the employer and the employee. This type of contract is suitable for employers who need to fill a short-term job vacancy or have a specific project that requires additional workforce.
On the other hand, the UDC is a contract that does not have a fixed termination date. The UDC is generally preferred by employees as it offers more job security and stability. This type of contract is suitable for employers who need to fill a permanent or long-term job vacancy.
It is important to note that regardless of the type of contract, both the employer and the employee are obligated to follow the terms and conditions outlined in the contract. In addition, the Labour Law of Cambodia also provides several protections for employees in the event of wrongful termination or breach of contract.
Therefore, employers should ensure that they comply with the Labour Law and draft a clear and detailed employment contract that outlines the responsibilities and obligations of both parties.
Understanding Seniority Payments in Cambodia
In Cambodia, seniority payments are an important aspect of employment contracts for employees who are on undetermined duration contracts (UDCs). Seniority payments are designed to reward employees for their length of service with an employer and to provide job security and stability.
Under the Labour Law, employers are required to make seniority payments to UDC employees every six months. Specifically, employees must be paid 7.5 days of wages and benefits each June and December. These payments are calculated based on the employee’s regular wage and are intended to compensate employees for their loyalty and commitment to the company.
It is worth noting that seniority payments are not required for employees who are on fixed duration contracts (FDCs). Additionally, the amount of seniority payments may vary based on the terms of the employment contract and the company’s internal policies.
Employers should ensure that they comply with the requirements of the Labour Law regarding seniority payments to avoid potential legal disputes and penalties. It is important for employers to maintain accurate records of their employees’ length of service and to calculate seniority payments in a transparent and consistent manner. This will help to build trust and confidence between employers and employees and to foster a positive work environment.
Conclusion
In conclusion, understanding employment and labour laws in Cambodia is essential for both employers and employees to ensure that they comply with the regulations and provisions set forth by the government. From hiring foreign employees to calculating seniority payments, there are many legal requirements that employers must follow to protect their employees and their business.
At MSEZ, we understand the importance of compliance with employment and labour laws in Cambodia, and we are committed to providing our clients with the necessary information and support to ensure that they operate within the legal framework. Our team of experts has extensive knowledge and experience in navigating the complexities of Cambodian labour laws and can assist clients with a wide range of employment-related matters, from drafting employment contracts to advising on termination procedures.
By working with MSEZ, clients can have peace of mind knowing that their employment practices are in compliance with the law and that they are providing their employees with the necessary protections and benefits. Contact us today to learn more about our services and how we can help you navigate the employment landscape in Cambodia.
References
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- Cambodia Work Visas and Permits,” Globalization Partners, accessed March 15, 2023, https://www.globalization-partners.com/globalpedia/cambodia-employer-of-record/work-visas/#gref.
- “Annual Leave in Cambodia: Overview,” Practical Law, accessed March 15, 2023, https://ca.practicallaw.thomsonreuters.com/w-027-3413?transitionType=Default&contextData=(sc.Default)&firstPage=true#:~:text=Annual%20leave%20in%20Cambodia%20is,agreements%20or%20individual%20employment%20agreements.
- “Employment Law in Cambodia,” Acclime Cambodia, accessed March 15, 2023, https://cambodia.acclime.com/guides/employment-law/#:~:text=There%20are%20two%20types%20of,the%20employer%20and%20the%20employee.