Minimum Wage to Be Extended to All Workers

Cambodia’s Ministry of Labor and Vocational Training (MLVT) has prepared a draft law on a minimum wage for all workers covered by the provisions of the Labor Law. Currently, there is a mandatory minimum wage for workers in the textile, garment, and footwear sectors only.

Under Prakas 396 on the Determination of Minimum Wage for Workers in Textile, Garment, and Footwear Industries for 2018, dated October 5, 2017, a monthly minimum wage for workers in these sectors is USD 165 (GBP 130 : Euro 145) for probationary workers and USD 170 (GBP 133 : Euro 150) for regular workers.

A tripartite National Council on the Minimum Wage (NCMW), comprised of the government, employer representatives, and employee representatives, will be established to conduct studies and research and provide recommendations for the determination of minimum wage levels and other benefits for persons covered by the Labor Law. Subject to the discretion of the NCMW, key factors to determine the minimum wage include social considerations (such as family status, the inflation rate, and living expenses); and (2) economic considerations (such as productivity, competition, job market status, and profitability of the industry). Discussions by the NCMW on the minimum wage must be undertaken annually (unless otherwise decided by the NCMW) and in accordance with the procedures set out in the draft law.

Upon the enactment of the draft law, based on the NCMW’s recommendation, the minimum wage will be determined by a prakas (a ministerial edict) issued by the MLVT that must take effect on January 1 of the coming year. The MLVT may set the priority of the scope of implementation for the minimum wage in accordance with economic activities, profession, occupation, and region based on the economic and social status of the country following receipt of recommendations by the NCMW. Any verbal or written agreement that calls for a minimum wage rate lower than that determined by the MLVT will be null and void.

Following the third public tripartite consultation, the draft law was approved by the Council of Ministers on May 25, 2018, and was included on the agenda for discussion at the Permanent Committee of the National Assembly on May 29, 2018. It will then be forwarded to the National Assembly for full discussion and adoption.

Written by Samnangvathana Sor of DFDL and Roger James of Ogletree Deakins