Cambodia Employment Guide

Cambodia is located in Southeast Asia, bordering Thailand to the west, Laos to the north, Vietnam to the east, and facing the Gulf of Thailand and Gulf of Cambodia to the south. It has a population of approximately 17 million, and its economy is dominated by agriculture, garment manufacturing, tourism, construction, and services. Phnom Penh, the capital, serves as the political, economic, and cultural center. Cambodia’s labor laws require employment contracts to be in writing, with a standard 48-hour workweek. Employers are obligated to provide a minimum wage, social insurance, and paid leave. Dismissals must comply with legal procedures and include financial compensation for employees. Its labor relations system is gradually improving and has a certain appeal to foreign-funded enterprises, but compliance requirements still need attention in some industries.

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Currency

Cambodian Riel (KHR)

Capital

Phnom Penh

Official language

Khmer

Salary Cycle

Monthly

Our Employment Guide in Cambodia

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Navigating Employee Termination in Cambodia: A Guide for Employers

Terminating an employment contract in Cambodia requires strict adherence to complex local labor laws. The process must be managed collaboratively with key stakeholders and often involves specific procedures and potential financial obligations for the employer.

Dismissal is only considered justified when an employee fails to meet reasonable performance standards that have been clearly communicated by the employer. Unjustified terminations can lead to legal disputes and financial penalties.

Understanding the Mandatory Notice Periods

The required notice period in Cambodia is determined by the employee's length of service. Adhering to these timelines is critical for a compliant termination process.

Less than 6 months of service: 1 week's notice.
6 months to 2 years of service: 2 weeks' notice.
2 to 5 years of service: 1 month's notice.
5 to 10 years of service: 2 months' notice.
Over 10 years of service: 3 months' notice.

Calculating Severance Pay Obligations

Employers are legally required to provide severance pay when an employee is dismissed for reasons other than serious misconduct. The compensation is calculated based on the employee's continuous service period, with a cap equivalent to six months' wages. For instance, a long-serving employee with eight years of service would be entitled to a higher severance payment than someone with only two years of service.

Best Practices for a Smooth Offboarding Process

To mitigate risks, companies like SailGlobal recommend a structured offboarding checklist. This includes conducting a final performance review, retrieving company property, calculating final payments accurately, and providing the employee with a certificate of employment. Proper documentation throughout the process is essential for legal protection.

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