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Compliance
Published:
January 12, 2026
Last updated:
January 12, 2026
Cambodia represents an emerging APAC market with competitive labor costs, growing manufacturing and garment sectors, and proximity to major Southeast Asian economies. However, employment regulations differ significantly from more established markets like Singapore, Malaysia, or Thailand, requiring jurisdiction-specific compliance expertise.
Organizations managing multiple employees across several APAC markets face increasing complexity when adding Cambodia to their regional footprint. Unlike markets with mature digital labor administration (Singapore's CPF system, Malaysia's ASSIST Portal), Cambodia's employment compliance often requires more hands-on documentation and physical submissions to the Ministry of Labour and Vocational Training (MLVT).
This guide provides mid-market perspective on Cambodia's employment laws and how organizations without in-country HR specialists can maintain compliance while scaling operations.
Cambodia's employment system is governed primarily by the Labour Law of 1997 and subsequent amendments addressing minimum wage, social security expansion, and occupational safety standards. The Ministry of Labour and Vocational Training (MLVT) serves as the main enforcement authority, overseeing labor inspections, enterprise registration, and work permit issuance.
Key regulatory areas:
Labor inspections: MLVT conducts periodic and complaint-driven inspections verifying compliance with occupational safety standards, employment contract documentation, working hours records, wage payment procedures, and social security contributions.
Enterprise registration: Employers must register with MLVT before commencing operations, providing business registration documents, company structure information, and intended workforce composition.
Work permit administration: Foreign worker employment requires MLVT-issued work permits and employment cards following quota approval processes.
For organizations expanding into Cambodia, ensuring full compliance with national labor standards becomes foundational to avoiding penalties, operational suspensions, or criminal violations for repeat offenses.
Employment contracts in Cambodia fall into two primary categories with different legal implications for termination procedures and employee protections.
Fixed-term agreements specifying contract end dates or project completion timelines. FDCs are appropriate for seasonal work, project-based engagements, temporary employee replacement, or trial periods.
FDC limitations: Maximum 2 years duration. Contracts renewed beyond this period automatically convert to undetermined-duration contracts (UDC), providing employees stronger protections.
Indefinite-term employment relationships presumed when no clear duration is defined or when FDCs extend beyond allowable periods. UDCs provide greater employee protection including longer notice period requirements, severance pay obligations when terminated without just cause, and stronger procedural protections against arbitrary dismissal.
Critical contract requirements:
Written documentation: All employment contracts must be in writing. Oral agreements, while creating employment relationships, lack enforceability for specific terms.
Khmer language requirement: Contracts must be drafted in Khmer language. Foreign language versions may be included as supplementary documents, but Khmer version governs interpretation during disputes.
Mandatory contract provisions:
MLVT registration requirement: Employers must submit copies of each employment contract to MLVT for official registration, ensuring MLVT maintains records of employment relationships and can verify compliance during inspections.
Cambodia's Labour Law establishes maximum working time limits and overtime compensation requirements protecting employee welfare.
Standard working hours: Maximum 8 hours per day and 48 hours per week. This differs from some APAC markets requiring attention when standardizing regional HR policies.
Overtime authorization and compensation:
Overtime must be authorized by employer and compensated according to statutory premium rates:
Rest period entitlements:
Time record requirements: Employers must maintain detailed attendance records showing daily working hours, overtime hours, rest periods, and leave taken. These records must be available during MLVT labor inspections.
For organizations operating 24/7 operations (manufacturing, customer support, logistics), implementing shift scheduling systems that track working hours and calculate overtime premiums accurately becomes operationally critical.
Cambodia's minimum wage applies primarily to garment and footwear sectors (employing approximately 700,000+ workers), revised annually through tripartite consultations.
2025 minimum wage: USD 204 per month (effective January 1, 2025) for garment, textile, and footwear sectors, increased from USD 200/month in 2024.
Non-garment sectors: No statutory minimum wage established. Wages determined by employment contracts and market rates.
Payment frequency: Wages must be paid at least twice monthly (semi-monthly payment cycles similar to Philippines). Common practice: mid-month advance and end-of-month final payment.
Payslip requirements: Employers must issue detailed payslips showing base salary and allowances, overtime hours and premium payments, deductions (social security contributions, taxes, other authorized deductions), net salary paid, and payment date.
Currency requirements: Salary payments must be made in local currency (Cambodian Riel/KHR) unless specific exceptions authorized by MLVT. In practice, USD payments are common given Cambodia's dual-currency economy.
Non-compliance consequences: Failure to comply may result in administrative fines, revocation of business licenses for persistent non-compliance, employee complaints triggering MLVT investigations, and reputational damage.
For organizations managing payroll across multiple APAC markets, Cambodia's semi-monthly cycle and dual-currency considerations create additional complexity.
Explore payroll compliance across APAC markets.
Cambodia's social security system is administered by the National Social Security Fund (NSSF), covering three main schemes with mandatory employer and employee contributions.
Occupational Risk Scheme: Covers work-related injuries, occupational diseases, and workplace accidents. Provides medical treatment, temporary disability benefits, permanent disability compensation, and survivor benefits.
Health Care Scheme: Covers medical treatment for employees and eligible dependents at NSSF-contracted healthcare facilities.
Pension Scheme: Provides old-age pension, disability pension, and survivor pensions. Full implementation ongoing with gradual expansion of coverage.
Total social security contributions calculated based on gross monthly wages:
Note: Contribution rates adjust periodically as NSSF expands coverage. Employers should verify current rates through NSSF or payroll providers.
New hire registration: Employers must register new employees with NSSF within 15 days of hiring. Late registration incurs penalties and may result in retroactive contribution obligations.
Monthly contribution remittance: Contributions must be paid monthly by the 15th of the following month. Late payment incurs penalties and interest charges.
Contribution calculation ceiling: Currently capped at approximately KHR 1,200,000 (approximately USD 300) monthly wage for contribution calculation purposes.
For organizations expanding into Cambodia, integrating NSSF registration and contribution management into payroll processes ensures compliance while avoiding penalties.
Foreign workers employed in Cambodia require proper work authorization through a multi-step process administered by MLVT.
Work Permit (Quota Approval): Before hiring foreign employees, employers must obtain quota approval from MLVT. Quota typically capped at 10% of total workforce, though exceptions may apply for certain industries or specialized skills.
Employment Card: Individual authorization issued to each foreign worker permitting employment with specific employer. Valid for one year and must be renewed annually.
Unauthorized foreign employment: Employers hiring foreign workers without proper work permits face administrative fines, potential ban from future foreign worker hiring, deportation of unauthorized foreign workers, and criminal penalties for repeated violations.
For organizations establishing Cambodia operations with expatriate management or specialized technical staff, budgeting adequate time (2-3 months) for work permit processing and ensuring quota compliance prevents operational disruptions.
Termination procedures in Cambodia vary based on employment contract type and termination circumstances.
Early termination: Terminating FDC before expiration requires mutual consent (both parties agree with negotiated terms) or justified cause (serious misconduct, gross negligence, criminal activity).
Unjustified early termination: Employer terminating FDC without justified cause owes compensation equivalent to remaining contract value.
Notice period requirements: Based on length of service:
Employers may pay salary in lieu of notice period.
Severance pay: When terminating UDC employees without just cause, employers must pay 15 days salary per year of service (or proportionate amount for partial years).
Serious misconduct justifying immediate termination without notice or severance includes theft, violence, serious safety breaches, persistent refusal to perform work, or habitual absence without valid reason.
For organizations managing terminations in Cambodia, understanding notice period calculations, severance formulas, and documentation requirements prevents disputes and ensures compliance.
Learn more about employee termination challenges across APAC.
Conciliation: MLVT facilitates conciliation meetings between employers and employees attempting to resolve disputes through negotiated settlement.
Arbitration: If conciliation fails, disputes may proceed to arbitration through Arbitration Council. Arbitration decisions are binding unless appealed to courts.
Labor Courts: Final recourse for unresolved disputes following formal legal procedures.
Inspection scope: MLVT verifies workplace safety, employment contract documentation, working hours records, wage payment compliance, social security compliance, and foreign worker authorization.
Non-compliance consequences:
For organizations operating in Cambodia, maintaining proper documentation and conducting internal compliance audits reduces risk during MLVT inspections.
For organizations expanding into Cambodia without established in-country HR infrastructure, managing employment law compliance creates operational complexity.
AYP's Employer of Record services in Cambodia provide comprehensive compliance support through:
Designed for organizations managing 100-300 employees across 3-7 APAC markets without building dedicated in-country HR teams.
By partnering with AYP's EOR services, your organization enters Cambodia confidently while we manage local compliance complexity and ensure continuous regulatory adherence.
Explore AYP's EOR services across APAC markets, or learn about compliance challenges when hiring across Asia.
👉 Contact us today.
