Hiring Employees in Cambodia 2026: A Foreign Employer's Guide to Labor Law
Cambodia's Labor Law (last significantly amended in 2021) is broadly employee-protective. Foreign business owners who do not understand their obligations face genuine legal and financial risk. This guide covers everything you need to know: contract types, minimum wage, leave entitlements, NSSF contributions, termination rules, and how to hire foreign staff.
Get Labor Law AdviceContract Types Under Cambodian Labor Law
All employment relationships in Cambodia must be governed by either a Definite Duration Contract (DDC) or an Indefinite Duration Contract (IDC). The distinction has significant implications for termination rights and severance obligations.
Definite Duration Contract (DDC)
Fixed-term contract with a stated end date. Maximum duration of 2 years, renewable once. Commonly used for probationary hires or project-based work. After two consecutive renewals of a DDC (or if the relationship continues past the DDC term), the employee automatically transitions to an Indefinite Duration Contract (IDC).
Indefinite Duration Contract (IDC)
Open-ended contract with no expiry date. The standard for permanent employees. Provides greater job security for the employee and correspondingly stronger termination obligations for the employer — including notice periods and severance pay. The default contract type for long-term staff.
Probation Periods
- Skilled workers: maximum 3 months probation
- Unskilled workers: maximum 1 month probation
- During probation, either party may terminate without notice and without liability
- Probation terms must be clearly stated in the written contract
Working Hours, Overtime & Night Work
Max 8 hours/day, 48 hours/week (6 days). Mandatory 1 full rest day per week.
1.5× the regular hourly rate. Requires employee agreement. Cannot be systematically mandated.
1.3× the regular hourly rate for work between 10:00 PM and 5:00 AM.
Minimum Wage & Market Salaries (2026)
Cambodia has a statutory minimum wage specifically for the garment, textile, and footwear sector: USD 204/month as of 2026. For all other sectors, there is no statutory minimum wage — salaries are market-driven.
Leave Entitlements
| Leave Type | Entitlement | Notes |
|---|---|---|
| Annual Leave | 18 working days/year (increases 1.5 days per year of service) | Up to a statutory maximum |
| Public Holidays | 28 days/year | One of the highest in Southeast Asia |
| Sick Leave | Up to 6 months | First month at full pay; then reduced. Medical certificate required. |
| Maternity Leave | 90 days (3 months) | 50% paid by employer, 50% by NSSF |
| Paternity Leave | 10 days paid | Full pay |
| Marriage Leave | 7 days paid | Employee's own marriage |
| Bereavement Leave | 7 days paid | Immediate family member |
NSSF (National Social Security Fund) Contributions
The NSSF covers health insurance, occupational risk, and the pension fund for Cambodian employees. As of 2026, the employer pays 2.6% of gross salary per employee. Employees currently contribute 0%.
Termination of Employment (IDC)
Terminating an Indefinite Duration Contract employee requires strict compliance with notice periods and severance obligations. Failure to follow the correct process exposes employers to compensation claims.
Notice Periods (by length of service)
7.5 days of salary per year of service. Since 2019, this is partially funded via the NSSF seniority indemnity fund — employers contribute monthly. Any deficit at termination is paid directly by the employer.
No notice or severance required — but cause must be serious (theft, violence, gross negligence) and documented. Procedural steps must be followed within defined timeframes. Our lawyers draft dismissal letters to minimize challenge risk.
Disciplinary Process
Hiring Foreign Employees
- Foreign employees must hold a valid Work Permit from MLVT (Ministry of Labour and Vocational Training)
- Work permits cost approximately USD 100–200/year and require annual renewal
- Employees must also hold a business/employment visa (E-class), typically obtained on arrival or converted from tourist visa
- Cambodia does not impose a minimum ratio of local to foreign employees (unlike Thailand or Vietnam)
- Work permit applications require: employment contract, company registration documents, passport copy, photos, and medical certificate
Cambodia vs Thailand vs Vietnam: Employment Comparison
| Metric | Cambodia | Thailand | Vietnam |
|---|---|---|---|
| Min. Wage (Manufacturing) | USD 204/month (garment) | THB 370–400/day (~USD 3,100–3,300/yr) | VND 3.45–4.96M/month (USD 140–200) |
| Annual Leave | 18 days | 6 days (min.) | 12 days |
| Public Holidays | 28 days | ~13 days | 11 days |
| Maternity Leave | 90 days | 98 days | 180 days |
| Employer NSSF/Social Security | 2.6% of gross salary | 5% of salary | 21.5% of salary |
| Termination Notice (2 yrs) | 1 month | 1 month | 45 days |
| Foreign Work Permit | USD 100–200/year | THB 3,000/year | USD 150–200/year |
| Foreign Employee Ratio | No statutory ratio | 4:1 Thai:foreign (some sectors) | Max 20% foreign labor |
Dispute Resolution
Handles collective labor disputes (where multiple workers are involved). Decisions are generally binding. Fast and inexpensive. Most claims resolved within 2–3 months.
Handles individual employment disputes. Slower than arbitration. Our lawyers represent employers in all Ministry of Labor proceedings and court cases.
Need Employment Contract Templates?
Our lawyers provide compliant Khmer/English bilingual employment contracts, disciplinary procedure templates, and HR policy frameworks. Contact us at:
mustoinvestincambodia@gmail.comWe respond within 24 hours on business days.
Frequently Asked Questions
Can I hire workers without a formal written contract in Cambodia?
Technically, verbal contracts are recognized under the Labor Law, but this creates enormous legal risk for employers. Without a written contract, disputes about terms (salary, working hours, leave) will default to the Labor Law's most employee-favorable interpretations. All contracts should be in writing, in Khmer (or bilingual Khmer/English), and signed by both parties. For any foreign employee, a written contract is required for the work permit application.
What happens if I terminate an employee without following the proper process?
Wrongful termination in Cambodia can result in substantial liability. For an IDC employee, termination without proper notice entitles them to "compensation in lieu of notice" (the notice period salary). Without proper documented cause for dismissal, the employee may also be entitled to severance. The Ministry of Labor's Arbitration Council regularly hears such disputes, and non-compliant employers frequently lose. The cost of proper documentation always outweighs the risk.
Do I need to pay NSSF contributions from day one?
NSSF enrollment is required when you hire your first employee. As of 2026, the employer contribution is 2.6% of gross salary per employee (covering health, work risk, and pension funds). Employees currently pay 0% — it is entirely employer-funded. Monthly NSSF contributions must be paid by the 15th of the following month. Failure to enroll or pay can result in penalties and back-payment demands.
Can I hire foreign employees in Cambodia?
Yes. Foreign employees must hold a valid work permit issued by the Ministry of Labour and Vocational Training (MLVT) and a business/employment visa (E-class). Work permits cost approximately USD 100–200/year and must be renewed annually. Cambodia does not impose a statutory ratio of local to foreign employees (unlike Thailand or Vietnam), though MLVT and GDT may scrutinize businesses with a very high proportion of foreign staff.
What is the disciplinary process I must follow before dismissing an employee?
Cambodian Labor Law requires a progressive disciplinary process for non-serious misconduct: (1) verbal warning, (2) written warning, (3) final written warning or suspension, before termination. Each step must be documented. For serious misconduct (theft, violence, gross negligence), summary dismissal without notice or severance is permitted — but the cause must be documented and the dismissal must follow specific procedural steps within defined timeframes. Our lawyers draft compliant disciplinary templates for your HR team.
Get Employment Law Advice for Your Business
Our lawyers draft compliant employment contracts, advise on termination procedures, and represent employers in labor disputes.
Book a Free Consultation
Speak with an experienced agent about your specific situation. No obligation, no legal jargon. Our recommended agent is fluent in English, Khmer, Italian and Russian.
Legal Disclaimer: Cambodian labor law provisions, minimum wages, and NSSF contribution rates are set by the Royal Government of Cambodia and subject to change. This guide is for general informational purposes only. Always consult a licensed Cambodian lawyer before making employment decisions, drafting contracts, or taking disciplinary or termination action.
Our legal content is developed in partnership with licensed Cambodian attorneys and business consultants who specialise in foreign investment, immigration, and property law.
Get Cambodia Travel Updates
Visa changes, travel tips, and destination guides delivered to your inbox.
No spam, unsubscribe anytime. We respect your privacy.