Compliance with the Labor Law is not on many organizations’ radar screens, until something goes wrong. A worker is fired, a disgruntled employee sues, or a government labor inspector arrives to check your paperwork, and all of a sudden the Labor Law matters, A LOT.

If you think this law doesn’t apply to you – you’re probably wrong. It governs all employer-employee relations resulting from contracts to be performed in Cambodia, regardless of where they were signed, or the nationality or residence of the parties. That’s really broad – though there are a few narrow exceptions (household servants, civil servants…) which don’t apply to most organizations.

In no particular order, here’s my best guess at the eight most frequently violated rules:

  1. Do you give your departing employees severance pay? According to Article 73, when a fixed duration contract ends, the employee gets an additional 5% of the TOTAL salary over the length of the ENTIRE contract, unless contracted otherwise.
  2. Are you reporting every hiring and dismissal to the Labor Inspector? You need to, within fifteen days of the event, according to Article 21.
  3. Have your human resource regulations been approved by the Labor Inspector? If you have more than seven workers, you need to have a comprehensive policy, approved by the Inspector (Article 24)
  4. Do you give equal pay for equal work? Regardless of nationality, sex, or age? For work of equal conditions, professional skill and output, you must pay all workers the same, see Article 105.
  5. Do you pay overtime for any work over eight hours a day? Overtime must be paid at 150% of normal wages, or 200% if done at night or during the weekend, according to Articles 137 and 139.
  6. Do more senior employees get more annual leave? According to article 166, annual leave is increased one day per month for each three years of service. For a 10-year veteran, that works out to a four-day workweek.
  7. Do you pay salary for paid-leave BEFORE the employee goes on vacation? That’s what Article 168 requires.
  8. Are you reporting all vacancies and job postings to the Placement Office of the Ministry of Labor? You’re required to do so, according to article 258.

If you answered ‘no’ to any of those questions, you’re risking problems should trouble come to your door. A review of your employment contracts and HR policies is a pro-active way to get in front of the issue. You might not be able to avoid all problems, but at least you can control the damage.

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