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Minimum Wages in Cambodia - frequently asked questions 2014

Do you know what is minimum wage? Do you have questions about minimum wages in your mind. Here you can find frequently asked question about minimum wages of cambodia at prake.org

 

Frequently Asked Questions
Is there a separate minimum wage legislation in Cambodia? What is the national poverty line?(In national currency) 
Do one or more minimum wage/s, exists in Cambodia? How often is poverty line updated? 
At what level are minimum wage determined in Cambodia? When was poverty line last updated? 
On what basis is/are minimum wage/s declared?  What is the percentage of minimum wage relative to the current poverty line?
In case of daily/weekly/monthly minimum wage, are number of working hours considered while fixing minimum wages?  Who all regulate minimum wages compliance?
Who all are involved in setting minimum wages? Which legal sanctions can be applied if compliance is lacking? 
How are upratings (adjustments) of minimum wage/s decided upon? Are sanctions often being applied?
What are the components of minimum wages in Cambodia? Are employer and/or trade union representatives involved in compliance procedures? 
How frequently is the fixed component of minimum wages updated?  To whom/where can individuals complain, if they think they are earning less than minimum wages? 
What are the yardsticks on which minimum wage revisions are based?

 

FREQUENTLY ASKED QUESTIONSMINIMUM WAGES AS PER LAW MINIMUM WAGES AS IMPLEMENTED IN PRACTISE
Is there a separate minimum wage legislation in Cambodia? There is no separate minimum wage legislation in Cambodia. All labour laws are regulated by LABOUR CODE, 1997. Under chapter VI, section 1(B), articles 104 - 109 deals with minimum wage regulations. In practice, minimum wage is determined only in the garment industry by the Ministerial notification after the employer representatives and union representatives have agreed together through Labor Advisory Committee (LAC).  The minimum wage is set by tripartite discussion in LAC. The Ministry of Labor notifies shortly after the LAC has decided the amount of Minimum Wage. Based on labour law, LAC is required to conduct study on Minimum Wages in Cambodia in order to be able to advice to Labor Minister. Since LAC has failed to conduct any  study to understand the minimum wage in cambodia, the nation-wide Minimum Wage has never been determined. Labor Law requires the Ministry in Charge of Labor to issue Prakas (Ministerial Regulation to determine Minimum Wage, based on regional, sectoral and so on). However, in practice the Ministry has never issued any Prakas, and has just issued notification on Minimum Wage in garment sector. 
Do one or more minimum wage/s, exists in Cambodia? Minimum wage exists only in the garment sector (at the occupational level only, that is, apprentice, probationary and regular)  In practice, workers in other sectors are paid based on the sympathy of the respective employer due to the absence of Prakas on Nation-wide Minimum Wage. 
At what level are minimum wage determined in Cambodia? According to the latest minimum wage notification No. 049/10 by Ministry of Labour and Vocational Training, a minimum wage rate is set for all regular and probationary workers in garment and footwear industry. It does not vary by regions/provinces. Article 107 (1) in Chapter 6 (B) states that guaranteed minimum wage may vary across the regions. As per law, the Labour Code 1997, however, extends to (is applicable to) all enterprises or establishments. Apprentice, probationary and regular workers in the garment industry However, as per practice minimum wages does not vary much. Minimum wage rates are fixed only for the garment industry which includes garments, textile and shoes industry. On the other hand, Minimum Wage of apprentice was set up in 1997 by notification 06/97 and was never reviewed since most employers seldom hire apprentice. Additionally, workers in other sectors are paid based on the sympathy of the respective employer due to the absence of Prakas on Nation-wide Minimum Wage
On what basis is/are minimum wage/s declared? Minimum wages in Cambodia are declared on monthly basis. As per the latest notification by MOLVT (No. 049/10), monthly minimum wage rates are set for all workers (regular or probationary or piece rate). In case of piece rate workers, whose wages are based on productivity, it says that if the performance of a piece rate worker is above the minimum wage rate (set for regular workers), they should be paid as per their performance. But if it is below the MW rate, then also they must be paid the fixed Minimum Wage. The reality coincides with the Provisions.
In case of daily/weekly/monthly minimum wage, are number of working hours considered while fixing minimum wages? In case of monthly minimum wage, number of working hours are fixed. However, the Labour Code, 1997 does not mention anything clearly about this. However, it fixes the number of normal working hours as 8 hours per day  or 48 hours a week (6 days a week).  
Who all are involved in setting minimum wages?  Government bodies, employer organisations and trade unions are involved in setting minimum wages in Cambodia. As per the article 107 (2.), [chapter 6, section 1 (B)], minimum wage is set by a Prakas of Ministry in charge of Labor, after receiving recommendations from Labor Advisory Committee which is a tripartite body (LAC is legally required to recommend to the Minister of Labour on Minimum Wage after it has been studied).  As per the article 107 (2.), [chapter 6, section 1 (B)], minimum wage is set by a Prakas of Ministry in charge of Labor, after receiving recommendations from Labor Advisory Committee which is a tripartite body ( LAC is legally required to recommend to the Minister of Labor on Minimum Wage after it has been studied. The Labor Advisory Committee, Article 357, has to conduct study on Minimum Wage and give advices to the Labor Minister. In practice, this body has never conducted any study on minimum wage, but decided on minimum wage as the chair person in LAC is also Minister of Labor.  The minimum wage is mostly likely fixed in a bilateral negotiation between the employer and union representatives under the facilitation of government.
How are upratings (adjustments) of minimum wage/s decided upon? Upratings of minimum wages are jointly decided by the government, employer and trade union representatives. As per article 357 (Chapter 15 - Labour Advisory Committee) of the Labour Code, 1997 it is the duty of  LAC (which is a tripartite body) to formulate recommendations on guaranteed minimum wage. In case, the employer and unions do not meet any consensus in the negotiation, they are asked to vote in favor to the government's proposal on minimum wage by raising hand)+B24 In practise, upratings of minimum wages are jointly by employer and trade union representatives and sanctioned by the government. As per the article 107 (2.), [chapter 6, section 1 (B)], minimum wage is set by a Prakas of Ministry in charge of Labor, after receiving recommendations from Labor Advisory Committee which is a tripartite body ( LAC is legally required to recommend to the Minister of Labor on Minimum Wage after it has been studied. The Labor Advisory Committee, Article 357, has to conduct study on Minimum Wage and give advices to the Labor Minister. In practice, this body never conducted any study on minimum wage, but decided on minimum wage while the chair person in LAC is also Minister of Labor. However, in practice this mostly likely happens in a bilateral negotiation between the employer and union representatives under the facilitation of government.
What are the components of minimum wages in Cambodia? Minimum wages in cambodia has only fixed component. As the minimum wage are regulated, there is only fixed component. However, MOLVT notification in 2008 (No. 32/08) introduced  an additional component , i.e. Cost of Living Allowance (COLA) but from October 2010, it is no more a part of minimum wage. Workers can get minimum wage plus components of wage, such as regular attendance bonus, seniority bonus, food allowance if they work over time, etc  
How frequently is the fixed component of minimum wages updated? There is no specific time interval to update fixed component of minimum wages. The Labour Code 1997 does not specify intervals on revision of minimum wage rates. It says that Minimum Wage should be revised (adjusted) from time to time. In practice, the minimum wage for the garment industry has been uprated every 3-4 years. 
What are the yardsticks on which minimum wage revisions are based?  Minimum wage revisions are based on Wage indexation, consumer price indexation & (decent ) living standard. As per article 107 (3.) of the Labour Code 1997, the determinants of minimum wage shall include, 1) the needs of workers and their families in relation to the general level of salary in the country (WAGE INDEXATION), 2) the cost of living (CONSUMER PRICE INDEXATION), 3) comparative standard of living of other social groups (DECENT LIVING STANDARDS). It also includes economic factors like economic development, productivity, and the advantages of achieving and maintaining a high level of employment.  
What is the national poverty line? (In national currency) The national poverty line in cambodia in the year 2009 was 3258 riels per person per day in Phnom Penh; 2705 riels in urban areas; and 2429 riels in rural areas. These figures are adjusted to 2009 prices by CIDS using Consumer Price Index (CPI) and poverty line figures from the National Institute of Statistics (NIS)  Since there was no update on poverty line, we just refer to the data in 2009. However, regarding the National Strategic Development Plan, even among the poor, a greater share of people are now closer to the poverty line, indicating that the CMDG targets of reducing overall poverty level and food poverty level to 25 % and 13 % respectively in 2010 and to 19.5 % and 10 % in 2015 are within reach if specific actions are taken starting with this NSDP.
How often is poverty line updated?  Poverty line is updated in more than one year  
When was poverty line last updated? Poverty line was last updated in the year 2010 (27.3%)  
What is the percentage of minimum wage relative to the current poverty line? 251% (based on poverty line in Phnom Penh) In percentage terms, it seems that minimum wage earners are well off. But in reality, the living standards of minimum wage earners is far below the average person. 
Who all regulate minimum wages compliance? Labour Inspector or similar body regulates minimum wage compliance . As per Article 344 of the Labour Code, it is the task of labour inspector to ensure enforcement of all the labour lawscompliance in cambodia. In reality, both labour inspector and trade unions regulate minimum wage compliance.
Which legal sanctions can be applied if compliance is lacking? Both fines and imprisonment can be applied in case of non compliance of minimum wages.As per Article 369 (chapter 16 - Penalties) of the Labor Code, 1997, those guilty of violating the provisions of Article 104 (Guaranteed minimum wage) are liable to a fine of 61 to 90 days of base daily wage (minimum wage) or imprisonment of 6 days to 1 month.  
Are sanctions often being applied? No information is available whether the sections are applied in reality.   
Are employer and/or trade union representatives involved in compliance procedures? There is no report from the labour inspector as per the implementation.  
To whom/where can individuals complain, if they think they are earning less than minimum wages? Individuals can complain to employer/management/contractor coordinates or labour inspector coordinates. The Labour Code, 1997 does not explicitly mention about where and to whom should individuals report in case of non compliance of minimum wages. But it mentions that LAC studies the problems related to wages, and in case of any dispute, the employee can try to negotiate or involve third party for conciliation or can report to Labour Court (Labour inspector) and in case of collective dispute the matter directly goes to arbitration council. In practice, workers tend to go to their trade unions for advice and assistance on issues related to wages and working conditions. No research exists at the moment to assess the effectiveness of trade union advice and assistance to their members.

 

 WageIndicator Team has checked and updated information on this page on August 5, 2013.