In this article we discuss the latest law updates on the minimum wage in Cambodia. For more information on the labor law, investment law, commercial enterprise law and more, check out our Library of Laws section on the website.
What is the minimum wage in Cambodia?
The Ministry of Labour and Vocational Training (“MLVT”) issued Prakas 247 on 21 September 2022 that Cambodia’s government has agreed to increase the monthly minimum wage to USD200 from the current USD198. Under Prakas 247, this raise in the minimum wage in Cambodia was effective from 1 January 2023 and only applies to the textile, garment, and footwear and travel goods industries.
Workers will continue to receive their benefits such as attendance bonuses, travel and accommodation bonuses, meal allowances, and overtime pay.
Who determines the minimum wage in Cambodia?
The National Council on Minimum Wage (NCMW), a tripartite body comprising equal representation of labor unions, employer’s associations, and the government sets the minimum wage. The Ministry of Labor and Vocational Training announced the results of a tripartite vote on four possible wage increases: USD198, USD206, USD210, and USD213. Of the 51 council members, 46 voted for USD198 which was increased to USD200 after an intervention by Cambodia’s Prime Minister Hun Sen.
In determining the minimum wage, the NCMW studies the following criteria:
- Cost of living;
- Sector profitability; and
- The current labor market situation.
What benefits do workers receive under the minimum wage in Cambodia?
In addition to the minimum wage, workers will also receive the following benefits:
- Attendance bonus — USD10 per month;
- Travel and accommodation expenses — USD7 per month;
- Meal allowances — USD 0.50 per day; and
- Overtime and seniority bonus — USD2-USD11 per month for those between their second to the eleventh year of work.
To note: workers who are paid based on productivity can earn more than the minimum wage; however, if the amount they produce earns them less than the minimum wage, then the employer has to add the remainder to a total of USD200 or USD198 for workers on probation.
What was the previous minimum wage in Cambodia before the increase?
On 28 September 2021, the Ministry of Labour and Vocational Training (“MLVT”) issued Prakas 264 on the Determination of Minimum Wage in Cambodia for Workers in the Garment, Textile, Footwear, Travel Product and Bag Sectors, to set new minimum wage in Cambodia, which was effective from 1 January 2022.
Under Prakas 264, workers in the relevant sectors were entitled to:
- For regular workers, USD 194 per month.
- For probationary workers, USD 192 per month.
Prakas 264 set the minimum wage in Cambodia for piece-rate workers. For such workers, the pay rate is to be determined based on their level of production and, in case such production gives rise to a higher pay rate than the minimum wage in Cambodia, the workers will be entitled to such a higher amount.
However, if their production gives rise to a pay rate lower than the minimum wage, the employer must adjust the workers’ pay, such that the total pay is at least equal to the minimum wage in Cambodia (USD 194 for regular workers and USD 192 for probationary workers).
Other benefits that such workers have received remain unchanged, such as compensation for transportation or accommodation allowance of USD 7 per month, attendance bonus of USD 10 per month, the food allowance of USD 0.5 per day (or one free meal per day) for those who work overtime and seniority bonus from USD 2 to USD 11 per month for those in their second to the eleventh year of work.
Under the Law on Minimum Wage in Cambodia, which was promulgated on 6 July 2018, the key factors in determining the minimum wage include social considerations (such as inflation rates and living expenses); and (2) economic considerations (such as productivity, competition, job market status and profitability of a particular industry). The discussions on the minimum wage are conducted on an annual basis unless decided otherwise by the National Council on the Minimum Wages, and such minimum wage is determined by a Prakas issued by the MLVT.