Employ Candidates Compliantly in Cambodia

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  1. Overview: Cambodia
  2. Global HR Compliance
  3. Global PEO and payroll
  4. Work permit for hiring expats via PEO
  5. Contractor vs. employee: which is better?
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Global HR Compliance in Cambodia

If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in Cambodia Guide below will help you understand the nuances of labor legislation in the country.

Companies hire international workforce for various reasons but in most cases they are:

  • entering the foreign markets to sell company products. To do so, the company hires sales representatives who would represent their product and sell it to their local client base.
  • hiring a global talent with unique skills that is unavailable in the local market or costs the company less than the talent with similar skills hired in the home country.

Before entering a certain foreign market or engaging a global talent, it is crucial for the company to understand how it can make local hires and reward its workers on a monthly basis. Growing companies often face a challenge of paying benefits and bonuses to the commission-based independent sales representatives they are working with.

If you intend to hire and pay your foreign workforce in full compliance with labor laws and regulations of Cambodia, then the Global Employer of Record service from Acumen International may be the best way for you to go. We are an International PEO company and we specialize in global employment, meaning we can employ your employees in Cambodia and act as their legal employer on your behalf. We will payroll your foreign workforce monthly and provide benefits to them through our global network so you don’t have to set up your own legal entities there.

We are experts in global workforce employment in , and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.

Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.

With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Cambodia.

Hiring and Firing Workforce in Cambodia Guide

# Employment Contracts

It is mandatory for a fixed-term contract to be drawn up in writing, and for a duration that must not exceed 2 years, inclusive of all extensions. Conversely, employment contract of an indefinite period may be drawn up in writing or concluded verbally. Every written contract of employment must contain the terms and conditions of the employment relationship, which include hours of work, remuneration, annual leave, holidays, weekly rest period, and night work.

# Minimum statutory employment rights

# Hours of work
The statutory maximum hours of work are 8 hours per workday and 48 hours per workweek. In every calendar week, employees are entitled to a rest period usually on Sundays.

# Probation period
New employees may be placed on probation for up to one month if they are unskilled employees, for up to 2 months if their positions require specialized skill, and for up to 3 months if they are permanent workers. Employers and employees have the legal right to individually or mutually cancel an employment contract during the probation period without providing a prior notice.

# Annual leave
All employees are eligible for annual leave starting from the completion of their one year of continuous employment with the company. The full time workers, working 48 hours a week, are entitled to 1.5 days of annual leave for one month of service. This means 18 working days for 12 months of service. Employees working less than 48 hours per week get annual leave on a pro-rata basis. For example, workers working 40 hours per week are entitled to 1.25 working days of annual leave per month of service which equals 15 working days of annual leave. Employees are entitled to an extra day of paid leave per year for every 3 years of continuous service.

# Parental leave
Female workers are entitled to 90 days of paid maternity leave, which may be used before or immediately after childbirth. Maternity leave is paid by the employer to the workers with at least one year of service. Workers are entitled to half their wages, i.e., 50% wages during the maternity leave, along with other benefits (if any).

# Sick leave
Employees must be allowed to be absent from work when they are ill for up to a period of 6 months, providing they provide medical certificate. According to the Ministry of Labor, employers may pay their sick employees as follows: 100 percent of normal pay in the 1st month of sickness; 60 percent of normal pay in the 2nd and 3rd month; no pay in the following months. An employee may be justifiably terminated if he/she does not recover after 6 months of sick leave.

# Overtime
The maximum number of overtime employees can work is fixed at 2 hours a day. This means that employers cannot force their workers to work for more than 10 hours per day, except for emergency situations. Employees must be paid 150% of normal pay for overtime worked during a workday, 130% of normal daily pay for night work and 200% of normal pay for working on weekly rest day or on holiday.

# State minimum salary
There is no federal minimum wage in Cambodia. The minimum monthly salary of workers in textiles and footwear industry in Cambodia rose by 11 percent to USD170 in January of 2018.  In all, all employees must be paid at monthly intervals, and must be provided with a pay slip that shows the amount that has been paid and the amount that has been taken away in tax.

# Employment termination
A contract terminates at the end of its term or by cancellation by either of the parties. The cancellation by either of the parties is either by agreement or on account of serious misconduct. To terminate an employment contract, employers must notify their employees 7 days ahead if they have worked for less than 6 months in the company; 15 days ahead if they spent between 6 months and 2 years; one-month ahead if they have stayed between 2 and 5 years; two months ahead if it is between 5 and 10 years; and three months if they have worked for more than 10 years in the company. Upon dismissal employees are entitled to severance package given as follows: 7 days of normal pay plus fringe benefits for employees whose number of years of service is between 6 months and one-year; and15 days of normal pay plus fringe benefits for each year of service (up to 6 months’ pay) if their number of years of service is more than one year.

Acumen International can help you fast-track your possibilities of entering and expanding your business in Cambodia by providing you with our Employer of Record services. Our unique mix of PEO/EOR solutions will enable you to jumpstart your global operations almost immediately, cost-effectively and compliantly without any need to set up a legal entity first or afterwards.

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