You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

July 2, 2019

Labor Law Updates in Cambodia—Q1 and Q2 2019

Subscribe to Updates

Following major developments in Cambodian labor law in 2018 and early 2019, in the past six months Cambodia’s Ministry of Labor and Vocational Training (MLVT) has continued to make substantial clarifications and revisions to employment law in Cambodia that employers should be aware of. The changes fall into three categories:

1.  Foreign Workers and Employment Contracts

On March 29, 2019, the MLVT enacted its Notification on the Registration of Foreign Employment Contracts. This allows employers to submit Khmer-language translations of their company’s employment contracts when applying for work permits for foreign employees. Both fixed duration contracts (FDCs) and undefined duration contracts (UDCs) will be accepted. These regulations replace the previous rules, which required an employer to submit a contract that followed an MLVT template, and deemed an FDC the only contract type valid for a work permit.

Finally, the notification specifies that if the contract expires or is amended, the employer must submit an updated agreement.

2.  Fixed Duration Contracts and Renewals

On March 17, 2019, the MLVT enacted its Instruction on Determination of Type of Employment Contracts. This sets the maximum duration of an initial FDC for a local or foreign employee at two years. The contract can be renewed one or more times so long as the total duration of the renewals does not exceed an additional two years, after which it will be deemed a UDC.

If an employee reaches the maximum duration for an FDC and the employer wants to continue the employment on an FDC basis, a one-month break must be inserted between the expiration of the FDC and the start of a new one.

3.  Seniority Payments

The Instruction on Payment of New Seniority Indemnity Each Year from 2019, which was enacted on June 10, 2019, stipulates that seniority be counted once every six months (a “semester”). Employees who have worked for at least one month and who work until the end of a semester are entitled to seniority payments equaling seven and a half days of average wages and other benefits each semester, for a total of fifteen days’ ongoing seniority payments per year. The payments for each semester are to be made during the second payment period for June and December, respectively; this occurs between the 1st and 7th of the following month.

The MLVT issued two other instructions to lay out the process for paying seniority back payments. The calculation of the back payments only includes actual wages, not bonuses.

In the non-garment sector, employers must make back payments (which accrue at 15 days per year) starting in December 2021 at a rate of three days per semester. In the garment sector (including textiles and footwear), back payments are due at a rate of 15 days per semester, and the maximum seniority back payment amount cannot exceed 6 months of average net wages. In calculating the daily average basic net wage, employers must treat a month as 26 working days.

On April 11, 2019, a Ministry of Economy and Finance circular clarified that seniority payments are not to be included in a Cambodian employee’s taxable salary; however, they will be included in a foreign employee’s taxable salary. In either case, seniority payments can be included in a company’s tax-deductible expenses.

For more information on these developments, or on any aspect of labor and employment in Cambodia, please contact our Cambodia office at [email protected] or +855 23 964 210.

Related Professionals

Practices

Employment

Location

RELATED INSIGHTS​ 

September 2, 2025
On August 26, 2025, the Thai cabinet approved a one-year postponement of mandatory contributions to the Employee Welfare Fund. Originally scheduled to take effect on October 1, 2025, the enforcement date has been deferred to October 1, 2026. The decision to delay the implementation stems from ongoing economic uncertainties in Thailand, driven by several external and domestic factors. These include increased trade tariffs imposed by the United States, the recent rise in the national minimum wage, and continued geopolitical tensions resulting from unresolved disputes with neighboring countries. These challenges have placed significant pressure on both businesses and the labor market, prompting the government to offer temporary relief through this deferral. As a result of the postponement, the following regulations will now come into effect on October 1, 2026: Royal Decree determining the Commencement Period for Savings and Contributions to the Employee Welfare Fund; Ministerial Notification specifying the Rates of Savings and Contributions; and Ministerial Notification outlining the Criteria and Procedures for Employers to Provide Assistance in Cases of Termination of Employment or Death. The Labour Welfare Fund Committee has formally endorsed the postponement. Contribution Rates Unchanged Although the implementation has been delayed, the contribution rates remain unchanged: October 1, 2026–September 30, 2031: Employers and employees each contribute 0.25% of the employee’s wage to the fund. From October 1, 2031, onward: Contributions increase to 0.5% of the employee’s wage for both parties. All other rules and conditions concerning the Employee Welfare Fund remain in full effect.
Read More
August 29, 2025
On August 15, 2025, Laos’ Immigration Police Department introduced a pilot online arrival registration system for foreign passport holders entering the country. Under the new system, visitors to Laos will be able to register their arrival online up to three days in advance and will be exempt from filling out paper forms at the border. Starting September 1, 2025, online registrations will be accepted at four major international border checkpoints: Wattay International Airport in Vientiane, Luang Prabang International Airport, Pakse International Airport in Champasak Province, and the First Lao-Thai Friendship Bridge linking Vientiane and Nong Khai Province in Thailand. Foreign passport holders arriving in Laos from this date onward will be able to complete the online registration via the official website of the Department of Immigration: http://www.immigration.gov.la/. Upon successful registration, travelers will receive a QR code valid for three days, which must be presented to border authorities upon arrival to verify the registration. During the pilot phase, which is expected to run until early 2026, travelers who have not registered online will still have the option to complete a paper form at the checkpoint. After the pilot phase, the online registration system will become mandatory nationwide, and paper forms will no longer be accepted. This initiative marks a significant step toward modernizing Laos’ immigration procedures. Transitioning from traditional paper-based entry forms to a streamlined digital system will greatly enhance efficiency at border checkpoints. The submission of traveler information ahead of arrival is expected to drastically reduce processing times and alleviate congestion at arrival counters, especially during peak travel periods.
Read More
August 20, 2025
On August 7, 2025, the government of Vietnam promulgated Decree No. 219/2025/ND-CP on foreign workers working in Vietnam (Decree 219), introducing substantial reforms to the management of foreign employees. Taking immediate effect upon issuance, and superseding earlier regulations on foreign employees under Decree No. 152/2020/ND-CP as amended by Decree No. 70/2023/ND-CP (collectively referred to as “Decree 152”), Decree 219 sets out clear timeframes and application requirements for work permit issuance, while adopting more flexible policies to support business operations. The key new provisions are as follows: 1. Relaxed Requirements Regarding Job-Posting Under Decree 152, employers were required to follow a complex process to apply for work permits or work permit exemption certificates for foreign employees. This included posting an advertisement for any position the employer wished to fill with a foreign employee on a designated online portal for a given amount of time, to demonstrate that the company tried, but failed, to find a suitable Vietnamese candidate for the position. This job-posting step now only applies when the foreigner will work in Vietnam under a local labor contract. Foreigners coming to Vietnam as intra-corporate transferees (i.e., as secondees) or working under service contracts are exempt. The job-posting period is also reduced from 15 calendar days to five business days. Employers may also now post the advertisements on multiple websites instead of only the online portal of the Ministry of Labor, Invalids and Social Affairs (now the Ministry of Home Affairs after government restructuring) or the provincial-level employment service center. 2. Work Permit Application Dossier Previously, employers were required to complete a preapproval step, whereby they had to submit a dossier explaining their foreign labor demand that required approval from the labor authority. Once approval for the foreign labor demand was granted, the approval dossier was an integral part of
Read More
August 20, 2025
With the shift in US policy to discourage DEI programs among government and private-sector employers, some companies have been cutting back. But US companies should be cautious in eliminating their DEI programs globally, as some elements of these programs are obligations under local laws in Vietnam, Thailand, and Cambodia.
Read More