Employer signing labor contract with checklist of NSSF and wage rules

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Employment Law in Cambodia: What Every Investor Should Know (2025 Guide)

A Foreign Investor’s Roadmap to Labor Contracts, NSSF, Minimum Wage, and Work Permits

As Cambodia’s economy grows in sophistication and foreign direct investment (FDI) surges, compliance with the Kingdom’s labor and employment regulations becomes critical—not only to avoid legal risk but to build sustainable operations.

In this 2025 guide, we break down the essential components of Cambodian employment law for foreign investors, including labor contracts, National Social Security Fund (NSSF) contributions, minimum wage regulations, and foreign work permits. Plus, we explain how Adaeng Development helps you build a compliant workforce with confidence.

📌 Why Labor Compliance Matters for Investors

Non-compliance with Cambodia’s labor law may result in:

  • Financial penalties from the Ministry of Labour and Vocational Training (MoLVT)
  • NSSF audits or suspension of business licenses
  • Negative brand reputation with partners and local communities

At Adaeng Development, we help clients navigate HR, payroll, and regulatory complexity from setup to scaling (www.adaeng.co/services).

📝 Types of Labor Contracts in Cambodia

Employment contracts must follow rules defined in the Labour Law of Cambodia (1997, revised 2021). Contracts can be oral or written, but written contracts are required for employment lasting more than 15 days.

1. Fixed Duration Contract (FDC)

  • Signed for a duration up to 2 years, renewable once
  • Must clearly state job duties, salary, and period
  • Subject to severance compensation at contract’s end

2. Undetermined Duration Contract (UDC)

  • Automatically applies after the FDC is renewed beyond legal limits
  • Provides greater job security and mandatory benefits
  • Termination requires prior notice and severance

Key Requirements for All Contracts:

  • Khmer language version must be included
  • Include start date, working hours, wages, probation period
  • Must be registered at MoLVT if employing more than 8 staff

📌 Learn more in our guide: Hiring & Building a Local Team in Cambodia

💵 Minimum Wage & Salary Structure

Cambodia enforces minimum wage policies that vary by sector.

2025 Minimum Wage Rates (Effective January 2025):

SectorMonthly Minimum Wage (USD)
Garment & Footwear$204
General Private Sector$180–$200 (recommended range)
Probationary Employees90% of standard wage

Employers must also consider:

  • Overtime pay (150%–200% on holidays/weekends)
  • Paid leave (annual, maternity, sick)
  • Bonuses (13th month salary not mandatory but common)

Note: Wages must be paid via bank accounts registered with the National Bank of Cambodia under MoLVT regulations.

🧾 NSSF: National Social Security Fund

All private-sector employers with one or more employees must register with the NSSF and make monthly contributions under three schemes:

1. Occupational Risk Insurance (Work-Related Injuries)

  • Employer contributes 0.8% of employee gross wage
  • Covers medical treatment, disability, or death benefits

2. Health Insurance Scheme

  • Employer: 2.6% of gross wage
  • Employee: 1.3%
  • Mandatory since 2023

3. Pension Scheme (Effective 2022)

  • Gradual contribution rates starting at:
    • Employer: 2%
    • Employee: 2%
  • Increases every 5 years up to 8.75% by 2037

📌 Official NSSF portal: www.nssf.gov.kh

Employers must:

  • Submit monthly payroll statements
  • Pay contributions by the 15th of each following month
  • Register new employees within 3 days of employment

🛂 Foreign Work Permits & Quota System

Foreign employees—including shareholders, directors, and expats—must obtain:

  1. Employment Card (Work Permit)
  2. Foreign Employment Quota approval (requested annually by company)

Quota System Rules:

  • Maximum 10% foreign staff per Cambodian company:
    • 1% Office Staff
    • 3% Specialist Technicians
    • 6% Skilled Workers

Employers can request quota exemptions for specialized roles. Failure to comply can lead to fines of up to KHR 12.6 million (~$3,150) per worker.

📌 Apply online via: www.fwcms.mlvt.gov.kh

📌 Learn how to structure a legally compliant foreign-owned business

⚖️ Labor Disputes & Termination

Cambodia follows ILO labor conventions and requires:

  • Written notice of termination: 7 to 90 days depending on tenure
  • Severance pay based on duration and contract type
  • Arbitration via the Arbitration Council Foundation (ACF) for unresolved disputes

Employers must submit layoff notices to MoLVT 15 days in advance, or face administrative sanctions.

🛡️ How Adaeng Development Simplifies Labor Compliance

Our services cover:

  • 🔹 Drafting bilingual employment contracts
  • 🔹 NSSF registration and monthly filing
  • 🔹 Salary structure alignment with market & legal requirements
  • 🔹 Work permit applications and quota strategy
  • 🔹 Legal compliance audits for due diligence

Whether you’re hiring your first local employee or scaling a cross-border team, we help investors build sustainable human capital in Cambodia (https://adaeng.co/contact).

🎯 Final Thoughts

Labor compliance isn’t a formality—it’s a foundation for strong operations, fair employment practices, and investor peace of mind. With Cambodia’s increasing digitization and rule enforcement in 2025, being proactive isn’t optional—it’s essential.

📞 Ready to build your dream team in Cambodia the right way? Start with a free labor law consultation → www.adaeng.co/contact

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