In B2B Cambodia's 'Legal Update' we delve into the latest legal changes and developments in Cambodia's laws and regulations with key experts in the field.
In this episode we discuss the evolution of minimum wage in Cambodia with Shan Berg Liew, Head of Labour & China Desk at Sok Siphana & Associates.
What Is The Minimum Wage In Cambodia 2025?
According to the labour law, a minimum wage is a wage that is guaranteed by law and ensures every worker of their right and dignity to a standard of living. This wage, Liew explained, is determined and based on the country’s social and economic criteria and circumstances.
Importantly, the minimum wage currently only applies to the garments, textiles, footwear and travel goods sector.
Since its inception in 2016, the minimum wage has only applied to garments, textiles, footwear and travel goods sector employees. It does not apply to every industry in Cambodia.
In 2025, Cambodia’s minimum wage is USD 208 for workers above probation, and USD 206 for probationary workers. This is a USD 4 increase from the minimum wage in 2024.
Mandatory Allowances And Benefits For Workers
In addition to a minimum wage, Liew stated that there are several mandatory allowances and benefits that are generally available to all employees.
Overtime Wage
All employees are entitled to overtime wages if they are required to work overtime. There is a day time overtime wage and a night time overtime wage.
The day time overtime wage is given for work conducted past the regular eight hours per day and is 150 per cent of the worker’s wages. The night time overtime wage is 200 per cent of the basic wage and applies from 10 PM to 5 AM.
Additionally, if an employee is required to work on their weekly rest days or during public holidays, their pay must be 200 per cent of their basic wage for that day.
Annual Leave
Every employee is entitled to one and a half days each month of annual leave – this accumulates over 12 months to 18 days per year.
Maternity Leave
Women are entitled to 90 days of maternity leave each time they require it. They will also receive a minimum guaranteed pay of 50 per cent of their wages if they have served at an enterprise for more than a year. If an employee requires to take maternity leave in the first year of their employment, they may not be entitled to pay during leave, but they cannot be terminated from employment.
However, Liew added that he has noticed many companies going beyond what the law stipulates and implementing maternity leave pay even in the first year of employment itself, after an employee passes probation.
He also added that sometimes the government will issue several ad hoc benefits to maternity workers, including stipends and additional allowances. Another important allowance maternity workers are entitled to is the daily allowance offered by the National Social Security Fund (NSSF).
Special Benefits For Workers In The Garments, Textiles, Footwear And Travel Goods Sector
- Attendance bonus: USD 10 per month
- Travel and accommodation allowance: USD 7 a month
- New allowances for overtime work: 50 cents per day
- Seniority bonus: Starts at USD 2 but increases by USD 1 each year for 11 years. From the 11th year onwards, the seniority bonus is kept at USD 11
Other Benefits
Other benefits can be determined as per the employee contracts agreed upon with the employers. Benefits under the contracts cannot be lower than what the law provides.
How Is The Minimum Wage Set In Cambodia?
“Minimum wage setting normally requires statistical studies into economic factors such as the yearly inflationary needs of workers and families in the market and the cost of living, since everybody knows the cost of living rises every year,” Liew explained.
Other important factors include the current social security net available to workers during emergencies, such as emergency health care for accidents, and the state of the country's economic development – government budget and year-end national statistics are often good indicators for this.
In terms of the main parties involved in determining the yearly minimum wage, the National Minimum Wage Council (NCMW) is responsible for making a recommendation that is proposed to the Minister of Labour, who then sets the official minimum wage through an announcement.
The NCMW is a body that was established by the Law on Minimum Wage and is formed of three parties:
- Members of the government
- Representatives of workers unions (normally union federations)
- Members of employer federations and business chambers
Stay tuned for Parts 2, 3 and 4 of our Legal Update on Cambodia's Minimum Wage
with Sok Siphana & Associates.
Reactions To The 2025 Minimum Wage In Cambodia
Liew outlined how different stakeholders impacted by the change in the national minimum wage reacted to the announcement that minimum wage would increase by USD 4 in 2025.
On the one hand, businesses have continued to voice their concerns about the rising cost of doing business, which includes the rising cost of materials and wages, especially for those manufacturing companies working in the garments, textiles, footwear and travel goods industry.
“The minimum wage will predictably continue to rise each year, and that will become a disadvantage to manufacturers because their export prices would be higher, and they may lose out when competing with other countries like Thailand or Vietnam,” said Liew.
And that is not to mention that consumers in those sectors are pressing prices further and further down, so we're really looking at the race towards the bottom, if you like.
While manufacturers in other sectors like electronic goods and bicycles are not subject to the minimum wage law, many companies have still tried to maintain the same practice as with garment, textiles and footwear manufacturers, so they may also share some of the same concerns. However, their export markets and consumer bases are ultimately quite different, so they feel less affected by the rise in minimum wage.
“Then, when we talk to employee unions, employee groups, NGOs that support employees, there's one camp that's not happy, because, of course, the current minimum wage doesn't reflect the daily living costs of a worker, and it doesn't reflect a living wage,” Liew added.
A living wage is what you really need to live a decent life in a certain place, and yes, the minimum wage has not met that yet.
Another reason why employee unions and groups are not too happy with the minimum wage is because the increments each year are getting lesser and lesser compared to the 10 years before, which naturally leads to unhappiness.
But, of course, taking both parties' views into account, I believe you can say that minimum wage increments are getting more predictable over the years, which would contribute to investor confidence in cost counting when they invest in Cambodia.
What Are The Consequences For Employers Failing To Pay Minimum Wage In Cambodia?
“If employers don't pay the minimum wage when they are required to, or they pay wages incorrectly, this will definitely result in employment disputes in the workplace, which normally result from complaints submitted by workers to the Ministry of Labour,” Liew began.
Furthermore, there will be fines involved if a labour inspection happens on an enterprise. These fines vary based on the offense committed, but Liew confirmed that incorrect payments for minimum wage result in fines of approximately USD 1,260, while for overtime wage the fines can be USD 840 each time.
Offenses more serious can be prosecuted in court – there will be an additional fine levied by court if an offense is established.
Where Can Employees Report Incorrect Wage Payments?
Employees who have experienced incorrect wage payments or unequal treatment in terms of the implementation of the employment benefits can make a direct complaint to the Ministry of Labour and Vocational Training (MLVT) through a Telegram chat open to workers.
Liew added that there is a compliance hotline that employees can call anytime they experience maltreatment at the workplace, or employees can also write to the MLVT’s Labour Dispute Department, where a labour inspector will be in charge of handling employment disputes and complaints.
Evolution Of Cambodia’s Minimum Wage
The minimum wage in Cambodia has shown an upward trend and has been increasing steadily over the last 10 years.
“For each period of time of [the wage] increments, we can actually see how minimum wage is increased based on the economic circumstances of Cambodia; the living costs, inflation and the conditions surrounding employees and families in general,” said Liew.
For example, between 2016 to 2018, increments were more than USD 12 each year, which Liew attributed to high economic growth conditions like large amounts of foreign direct investment (FDI) flowing into Cambodia at that time. Then between 2017 to 2021, employees started to unionise, form union federations, while employers also formed employer federations and business chambers.
Of course, the business voice is saying that if you increase the minimum wage more and more, Cambodia will become unproductive and less competitive. But then you have the other camp, the workers, saying, no, we have to have a higher minimum wage because the cost of living is getting higher and higher each year, the wage does not reflect inflation, and so on and so forth.
Upon entering this stage where both employees and employers have more equal bargaining power through their respective federations, against a backdrop of consistent government intervention, wage increments in Cambodia have become more stable.
- From 2018 to 2021, wage increments were USD 8 each year, which continued even through the pandemic in 2020.
- From 2021 onwards, increments shrunk from USD 8 to an average of USD 4 per year due to the economic recovery period from exiting the pandemic.
- Then from 2023 onwards, until now, increments are now only USD 2 each year (with the caveat that the Prime Minister adds an additional USD 2 each year to any minimum wage proposal).
“There are more questions as to why we’re seeing a downward increment trend over the last 10 years, but probably we can say that this shows a rather stable and more predictable wage increment as the years go by,” Liew asserted.
Comparing Cambodia's minimum wage with the region, Liew explained that it is relatively consistent with other garment producing countries like Vietnam and Bangladesh, but not necessarily so with other ASEAN countries like Malaysia or Thailand, who not only produce some garments, but also have a manufacturing industry that is more focused on electronics and other consumer goods, with larger export markets.
“Minimum wage in those countries will be higher, definitely, which is why Cambodia still remains an attractive place for investors to come and invest in manufacturing,” Liew concluded.