Labour Compliance for Enterprises in Cambodia (Part 1): Foundations of Labour Compliance In Cambodia
Introduction to Labour Compliance in Cambodia
Labour compliance is a fundamental obligation of all enterprises and establishments operating within the Kingdom of Cambodia. The labour framework, anchored in the Labour Law (Royal Kram No. ជស/រកម/0397/01 dated 13 March 1997) and reinforced by sub-decrees, prakas, and guidelines, sets clear responsibilities for employers to ensure safe, fair, and lawful working conditions.
This article provides a concise and practical overview of the key compliance requirements under Cambodian law drawing on the latest regulations from the Ministry of Labour and Vocational Training (MLVT), the National Social Security Fund (NSSF), and other relevant authorities.
By structuring these obligations, the objective is to support employers, compliance officers, human resource practitioners, and legal professionals in understanding, implementing, and maintaining compliance with the national labour regulatory framework.
Part I outlines the legal and conceptual foundations of labour compliance in Cambodia, introducing definitions, governing laws, and regulatory instruments that form the backbone of employer obligations. Grasping these fundamentals is essential before addressing the practical requirements discussed in subsequent parts.
Key Takeaways on Labour Compliance in Cambodia
Definitions under Cambodian Labour Law
1. Labour Law
refers to the Law on Labour of the Kingdom of Cambodia, which was promulgated by Royal Kram No. ជស/រកម/0397/01 and its subsequent amendments.
2. Labour Regulations
refer to the normative legal documents of Cambodia, including but not limited to the Labour Law, sub-decrees, prakas, decisions, arbitration awards, or guidelines/notifications issued by the institutions responsible for the labour sector.
3. Enterprise
refers to the main business location of an employer, which may be the head office or any specific site declared upon enterprise opening. Each enterprise may have multiple establishments, and each composed of workers working at a particular location.
4. Establishment
refers to any location other than the enterprise’s main place of business, such as a factory, workshop, or construction site, under the employer’s management (Article 2.2 of the Labour Law).
5.Employer
refers to any person who establishes an enterprise and employs at least one worker. (Article 2.1 of the Labour Law)
6. Worker/Employee
refers to all individuals covered by the Labour Law, regardless of whether they have skills or specialization.
Legal Framework Governing Labour Compliance in Cambodia
This article is based on the current laws and regulations of the Kingdom of Cambodia, including:
1. Law on Labour, Royal Kram No. ជស/រកម/0397/01 dated 13 March 1997, and its subsequent amendments.
The Cambodian Labour Law of 1997 is the foundational law governing employment relations, establishing rules on labour contracts, termination, wages, working hours, leave, occupational safety, and worker protection, while its amendments in 2007, 2018, and 2021 further strengthened enforcement, introduced seniority payments, and improved work scheduling, dispute resolution, and labour inspection in adapting to socio-economic changes.
2. Law on Social Security Schemes, Royal Kram No. នស/រកម/1119/018 dated 02 November 2019.
The Law on Social Security Schemes of 2019 establishes a unified social security system covering pensions, health care, occupational risk, and unemployment for public servants, workers covered under the Labour Law, and the self-employed, with the NSSF as the implementing body. Importantly, Article 106 repeals the 2002 Law on Social Security Schemes for Persons Defined by the Labour Law and all provisions inconsistent with this law, thereby replacing the old legal framework with a comprehensive and modern system aligned with current socio-economic conditions.
3. Law on Minimum Wage, Royal Kram No. នស/រកម/0718/015 dated 06 July 2018.
The Law on Minimum Wage of 2018 aims to guarantee a statutory minimum wage for all workers covered by the Labour Law in order to promote decent living conditions, labour productivity, and a favorable business and investment environment. The law establishes clear procedures for fixing the minimum wage based on social and economic criteria and creates a National Minimum Wage Council as a tripartite mechanism for consultation and recommendations. Importantly, Article 29 repeals Articles 104 to 109 of the 1997 Labour Law and all provisions inconsistent with this law, making the 2018 Minimum Wage Law the governing legal framework on minimum wages in Cambodia.
4. Law on Trade Unions, Royal Kram No. នស/រកម/0516/007 dated 17 May 2016, and subsequent amendments.
The Law on Trade Unions (2016) establishes the framework for forming, registering, regulating trade unions and employers’ associations in Cambodia, ensuring freedom of association, collective bargaining, worker representation, and dispute resolution. In 2020, amendments clarified key provisions on union registration, determination of the most representative union, and protection of union leaders, while strengthening accountability, dispute resolution, and enforcement.
5. Sub-Decree No. 32 dated 04 March 2021 on the Social Security Scheme on Pensions for Persons Covered under the Labour Law.
Sub-Decree No. 32 on the Pension Scheme sets out the rules for implementing the pension system for persons covered by the Labour Law, including registration, the NSSF contributions, benefit calculation, and eligibility for old-age, invalidity, and survivors’ pensions, as well as a voluntary scheme, to ensure sustainable social security protection.
6. Sub-Decree No. 01 dated 06 January 2016 on the Establishment of the Social Security Scheme on Healthcare for Persons Defined by the Provisions of the Labour Law.
Sub-Decree No. 01 establishes a social health insurance system for persons covered by the Labour Law, providing preventive health services, medical care, and daily allowances during work suspension due to illness, non-occupational accidents, and maternity leave. It requires employers and workers contributions, designates the NSSF as the implementing body, and sets rules to ensure the quality and sustainability of health care services.
7. Sub-Decree No. 140 dated 26 August 2017 on the Amendment of Article 7 of Sub-Decree No. 01 dated 06 January 2016 on the Establishment of the Social Security Scheme on Healthcare for Persons Defined by the Provisions of the Labour Law.
Cambodia’s Sub-Decree No. 140 (2017) amended Sub-Decree No. 01 (2016) by shifting the full cost (100%) of the Social Security Scheme on Health Care from a shared 50/50 employer–employee contribution to be fully borne by the employer, effective 1 January 2018. This amendment ensures continued health care benefits, including preventive services, medical treatment, and daily allowances, for workers covered by the Labour Law.
8. Inter-Ministerial Prakas No. 193 dated 13 March 2025 on Public Services Provided by the Ministry of Labour and Vocational Training.
Prakas No. 193 defines government services, procedures, and administrative fees of the Ministry. It ensures transparency, consistency, and efficiency by clearly listing services on labour administration, enterprise and establishment registration, vocational training, licensing, certification, and labour inspection, as well as specifies responsible authorities and the effective dates of implementation.
9. Inter-Ministerial Prakas No. 498 dated 31 July 2023 on the Imposition of Fines on Individuals Who Commit Violations of the Provisions of the Labour Law.
Prakas No. 498 sets offences and fine levels for breaches of the Labour Law in order to strengthen enforcement and compliance. It covers violations on labour contracts, wages, working hours, leave, occupational safety and health, trade unions, child labour, and foreign labour, and identifies the competent authorities and procedures for imposing fines.
10. Prakas No. 111/25 dated 06 May 2025 on the Payroll Book.
Prakas No. 111/25 establishes the format, content, and procedures for maintaining payroll records to ensure transparency, accuracy, and compliance. Employers must use the payroll book prescribed by the Ministry of Labour and Vocational Training, including electronic features such as QR codes or online systems, and keep records available for inspection to strengthen enforcement of the Labour Law.
11. Prakas No. 113/25 dated 06 May 2025 on the Establishment Register Book.
Prakas No. 113/25 sets out the format, and procedures for recording establishment and employee information to ensure transparency, accuracy, and compliance with labour regulations. Employers must use the register book prescribed by the Ministry of Labour and Vocational Training, including digital features such as QR codes or online systems, and keep records available for inspection by competent authorities.
12. Prakas No. 110/25 dated 05 May 2025 on the Declaration of Opening and Closing of Enterprises or Establishments.
Prakas No. 110/25 specifies employer obligations and procedures to declare enterprises opening, closure, or updates to the Ministry of Labour and Vocational Training, including submission via the online Labour Centralized Management System (LACMS). It aims to ensure transparency, proper labour administration, and effective enforcement of labour regulations.
13. Prakas No. 367/23 dated 08 December 2023 on Obligations Regarding the Employment of Foreign Labour.
Prakas No. 367/23 sets out employer obligations and procedures for hiring foreign workers to ensure effective management and compliance with labour laws. It covers foreign labour quota submissions and updates, worker registration, obtaining work permits and employment cards, and reporting through electronic systems such as the Foreign Workforce Centralized Management System (FWCMS) and the Labour Centralized Management System (LACMS).
14. Prakas No. 366/23 dated 08 December 2023 on Foreign Work Permits for Self-Employed Foreigners.
Prakas No. 366/23 sets out conditions, procedures, and obligations for self-employed foreign nationals to apply for and renew work permits in Cambodia. The applications must be submitted through the Foreign Workforce Centralized Management System (FWCMS), with specified documentation and validity periods, and The Prakas establishes compliance and inspection measures to ensure effective regulation and the lawful employment of self-employed foreign workers.
15. Prakas No. 195 dated 20 August 2014 on Work Permits and Work Books for Foreigners.
Prakas No. 195 establishes the conditions, procedures, and obligations for employers and foreign nationals regarding the application, renewal, and holding of work permits and work books in Cambodia. The Prakas specifies the categories of foreigners required to hold work permits, the required documentation, official fees, validity periods, as well as inspection and penalty measures, aimed at ensuring effective regulation and compliance with Cambodian labour laws.
16. Prakas No. 196 dated 20 August 2014 on the Employment of Foreign Labour.
Prakas No. 196 sets out conditions, procedures, and obligations for hiring foreign workers in Cambodia. It regulates foreign labour quota submissions, approval conditions, worker ratios, between Cambodian and foreign workers, and compliance and inspection measures, aimed at ensuring effective regulation of foreign labour and protecting employment opportunities.
17. Prakas No. 302 dated 02 July 2018 on Shop Stewards in Enterprises or Establishments.
Prakas No. 302 establishes the legal framework for the creation, election, and functions of shop stewards as the sole representatives of workers in enterprises or establishments. The Prakas defines the roles and duties of shop stewards, including representing workers’ grievances, ensuring compliance with labour laws and occupational safety and health, consulting on internal regulations and redundancy measures, and, where no union exists, signing interim collective bargaining agreements. It repeals Prakas No. 286 of 2001 and all provisions inconsistent with this Prakas.
18. Prakas No. 449 dated 10 November 2017 on the Determination of Contribution Rates, Forms, and Procedures for the Payment of Contributions under the Social Security Schemes on Occupational Risks and Healthcare for Persons Covered under the Labour Law.
Prakas No. 449 sets out the contribution rates and payment procedures that employers must follow when making social security contributions to the NSSF for workers covered by the Labour Law. The Prakas establishes contribution rates of 0.8% for the Occupational Risk Scheme and 2.6% for the Health Care Scheme, calculated on the assumed wage, and requires monthly payment by the 15th of the following month. It also specifies payment methods, penalties for late payment, and repeals prior regulations inconsistent with its provisions to ensure effective and uniform implementation of social security obligations.
19. Guideline No. 138/25 dated 20 August 2025 on the Suspension of Employment Contracts.
Guideline No. 138/25, issued under Articles 71 and 72 of the Labour Law, sets out procedures for the suspending of employment contracts in cases of serious economic or material difficulties. Employers must notify and obtain workers consent, submit required information and documents via the Labour Centralized Management System (LACMS), report any early resumption of work, and keep records available for inspection, with non-compliance subject to penalties under the law.
20. Other relevant legal instruments.
Labour compliance in Cambodia is governed by the Labour Law and its amendments, along with other key instruments such as the laws on minimum wage, trade unions, and social security, as well as related sub-decrees, Prakas, and guidelines. These instruments regulate employer obligations on worker protection, social security contributions, enterprise registration, payroll and employment records, foreign labour, contract suspension, and reporting via LACMS and FWCMS, forming a comprehensive framework for lawful business operations in Cambodia.
While Part I establishes the legal foundation, while compliance is ultimately assessed in practice. Part II will examine the mandatory operational compliance requirements that every enterprise or establishment must comply with when commencing and conducting business in Cambodia.
ILAW CAMBODIA LAW OFFICE is ready to assist enterprises, investors, and multinational companies in navigating regulatory requirements. With expertise in Cambodian labour law and support of ILAWASIA’s regional platform, we provide practical legal solutions, compliance assessments, and practical advisory services to keep organizations compliant while protecting their interests.
Whether establishing operations or expanding a workforce, ILAW CAMBODIA LAW OFFICE is your trusted partner in navigating complexities and ensuring long-term success.
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