Hire Local Talents and Expand Your Business Quickly and Compliantly in Cambodia
New Horizons is Asia’s leading Professional Employer Organization and is constantly expanding to new markets to allow foreign investors the ability to contract with local staff without having to incur the expense or complications associated with directly hiring staff. Our employer of record services allow you to take advantage of the unique insight, intelligence and productivity of the local Cambodian workforce and run your payroll without first establishing a subsidiary, branch office or other legal entity.
Through New Horizons’ portal, you can delegate tedious administrative tasks like HR service management, tax and compliance management to a trusted group of local professionals who are familiar with bureaucratic requirements and local governmental agents. This division of duties allows your employees to get started faster, have a better hiring experience and be acclimated to your business in record time. You benefit by being able to focus on the operations of your business instead of investing time into these tasks.
Employment Contracts in Cambodia
Our experts use best practices to develop employment contracts and are familiar with statutory and market norms. This insight informs our process and allows us to draft customized employment contracts that are targeted at protecting your interests and that benefit from years of experience in this realm.
In Cambodia, it is customary to have written employment contracts with employees. These contracts may be either fixed or indefinite. Fixed employment contracts can last up to two years in duration. Indefinite contracts are for an unspecified amount of time.
When negotiating strong employment contracts, we keep the following important details in mind:
Working Hours in Cambodia
The typical workweek in Cambodia is 48 hours or less. The typical workday is 8 hours. Employees typically do not work more than nine hours a day and cannot work more than two hours of overtime each day. Employees who work overtime or on holidays are entitled to overtime pay at the following rates:
- Regular overtime – 1.5 times the base rate
- Overtime performed on a holiday, on a Sunday or at night – 2 times the base rate
Cambodia’s Public Holidays
Cambodia celebrates 19 different public holidays. Some of these are one-day holidays while others are three-day festivals. Workers are not expected to work on these days. If they do, they are entitled to pay that is double the base rate of pay.
Cambodia’s public holidays include:
- International New Year Day
- Victory Over Genocide Day
- Meak Bochea Day
- International Woman’s Day
- Khmer New Year
- International Labor Day
- King Birthday
- Visak Bochea Day
- Royal Plowing Ceremony
- Children’s Day
- King Mother’s Birthday
- Constitutional Day
- Phum Ben Day
- The commemoration of Former King Norodom Sihanouk
- Paris Peace Agreement Day
- King’s Coronation Day
- Independence Day
- Water Festival
- International Human Rights Day
Vacation Leave in Cambodia
Employees generally receive 1.5 days of paid leave per year for every month that they have worked. For example, if they have worked 12 months, they are entitled to 18 days of vacation leave. After they have worked with the same company for three years, they receive an extra day of vacation per year they have worked.
Cambodia’s Sick Leave Requirements
Sick employees in Cambodia are given up to six months of six leave if they verify their illness with a doctor’s certificate. This sick leave is paid as follows:
- Month 1 – 100% of wages
- Months 2 and 3 – 60% of wages
- Months 4 to 6 – Unpaid
Cambodia and Maternity Leave
Cambodia law provides for paid maternity leave for mothers who have worked for the employer for at least one year. This leave is paid at half the rate of the mother’s base salary. Fathers in Cambodia receive one day of paid paternity leave.
Bonuses in Cambodia
After an employee has worked for a company for one year, he or she typically receives a seniority bonus of $2. Higher bonuses are achieved as the employee works subsequent years for the business. This bonus continues until the 11th year of service and is capped at $11.
Health Benefits in Cambodia
Employees who are injured while working usually qualify to have their associated health care expenses paid by their employer.
Other Employment Benefits in Cambodia
Employers in Cambodia often offer employees additional benefits to employees to make them a more attractive option. This often includes allowances for housing, health care and transportation. Additionally, they may pay employees attendance bonuses.
Termination Procedures and Severance Entitlements in Cambodia
Unlike in the United States, there are additional employee protections that protect them from early termination. If an employer violates these rules, the employee may be entitled to significant damages. However, these protections do not apply to all types of employees.
Right to Notice
Cambodia allows probationary periods for up to three months. An employee who is terminated during the probationary period is not entitled to notice before being terminated.
Employees who are subject to an indefinite term contract can be terminated by an employer for any reason.
For fixed term contracts, the employer must have a valid reason to terminate the employee, such as problems with the employee’s performance or concerns about the economic stability of the company.
Employees are typically entitled to notice of termination at the following intervals:
- 7 days – For employees who have worked up to six months
- 15 days – For employees who have worked between 6 months and 2 years
- 1 month – For employees who have worked between 2 and 5 years
- 2 months – For employees who have worked between 5 and 10 years
- 3 months – For employees who have worked more than 10 years
Employees who have received notice of termination may spend up to two days each week to look for new employment during the notice period.
After a fixed-term contract, employees are typically entitled to severance pay of a minimum of 5% of their normal wages that they received during their contract. Employees who had indefinite contracts are entitled to 7 days’ worth of wages if they worked between six to twelve months for the employer or 15 days’ wages for each year of employment, up to six months’ worth of wages.
Employment Tax in Cambodia
Employers are required to pay tax of 0.8% of the employees’ monthly wages to social security. In Cambodia, employees do not contribute to the social security fund.