DFDL Cambodia Legal Alert: Increase in Minimum Wage for 2023 for the Garments, Textiles, Footwear, Travel Products and Bags Sectors

On 21 September 2022, the Ministry of Labour and Vocational Training (“MLVT”) issued Prakas 247/22 on the Determination of Minimum Wage for Workers in the Garment, Textile, Footwear (“GTF”), Travel Product and Bag Sectors (“Prakas 247”), to set a new minimum wage for 2023, which will be effective from 1 January 2023.

Under Prakas 247, workers in the above sectors will be entitled to the following new minimum wage:

Prakas 247 also sets out the minimum wage for piece rate workers. For such workers, the pay rate is determined based on their level of production and, if such production gives rise to a higher pay rate than the minimum wage, the workers will be entitled to such higher amount. However, if their production gives rise to a pay rate lower than the minimum wage, the employer must adjust the workers’ pay such that the total pay is at least equal to the minimum wage (USD 200 for regular workers and USD 198 for probationary workers).

The other benefits to which the workers in the GTF sectors are entitled remain unchanged, such as compensation for a transportation or accommodation allowance of USD 7 per month, an attendance bonus of USD 10 per month, a food allowance of USD 0.5 per day (or one free meal per day) for workers who work overtime and a seniority bonus from USD 2 to USD 11 per month for workers in their second to the eleventh years of service.

Under the Law on Minimum Wage, which was promulgated on 6 July 2018, the key factors in determining the minimum wage include social considerations (such as inflation rates and living expenses) and economic considerations (such as productivity, competition, job market status and profitability of a particular industry). The discussions on the minimum wage are conducted on an annual basis, unless decided otherwise by the National Council on the Minimum Wages, and such minimum wage is determined by a Prakas issued by the MLVT.

Should you require any further information or legal support, please contact us at: [email protected].