Minimum Wage Settingin Cambodia

2016

The Secretariat of Labour Advisory Committee (LAC)

Jointly prepared by:

1

Ministry of Labour and Vocational Training International Labour Organization

Who is Involved in Minimum Wage Setting in Cambodia ?

Under article 357 of the Cambodian Labour Law 1997, LabourAdvisory Committee (LAC) leads the minimum wage discussionand recommends the minimum wage increment to thegovernment. The LAC consists of representatives of workers,employers and government.

Minimum Wage

Employers

have 7 representatives

The Government has 14 representatives

Workers

have 7 representatives

(trade union)

2

Who is Involved in Minimum Wage Setting in Cambodia ?

Where necessary, the Labour Advisory Committee (LAC) can set

up a tripartite technical working group. This technical working

group, consisting of equal representatives from the three parties,

discusses about data, criteria and rate of minimum wage

increment in greater detail to formulate a recommendation to

LAC for further consideration.

Minimum Wage

Technical working group

Employers

have 16 representatives

Technical working group

The government has 16 representatives

Technical working group

Workers

have 16 representatives

3

What are the Criteria for Minimum Wage Setting in Cambodia?

Article 107 (point 3) of the

Cambodian Labour Law stipulates

that elements to take into

consideration for determining the

minimum wage shall include social

and economic factors, as called for

in the article 3 of the ILO’s Minimum

Wage Fixing Convention, 1970

(No.131).

After a national tripartite consultative

workshop on the “process of

minimum wage setting in Cambodia”

that was held on 24th-25th April 2014

under the technical support of the

ILO, the tripartite constituents

agreed to use 7 criteria to set the

minimum wage in Cambodia, and

those criteria are:

Family situation

Inflation rate

Cost of living

Productivity

Competitiveness of the country

Labour market situation

Profitability of the sector

Social

Criteria

Economic

Criteria

1

2

3

4

5

6

7

4

What are the Principles Used for Minimum Wage Negotiation?

Minimum

Wage

Minimum wage consultation is

held on annual basis 1

Use official statistics of the

national agencies or institutions

in charge of producing statistics;

and social & economic criteria

are taken as principle for

discussion

5

Negotiation is based on the principle of consensus among members present in the consultation meeting. If consensus cannot be reached after two separate meetings, a decision is made based on the majority vote in a secret ballot at the second consultation meeting.

4Minimum wage is a number

or growth rate that is

predictable with gradual

and steady adjustments

2

Based on win-win principle

in negotiation process

3

After the national tripartite consultative workshop on “process of minimum wage

setting” in Cambodia, held on 24th-25th April 2014, under the technical support of

the ILO, the tripartite constituents unanimously agreed to the five principles

below:

5

Employer Union

Government

When Does the Labour Advisory Committee (LAC) Commence the Minimum Wage Consultation Process ?

In July of each year,

each respective party

commences their own

internal

consultations

6

Employer and Government

Union and Government

Employer and Union

In August of each year,

each respective party

commences bipartite

consultations

7

When Does the Labour Advisory Committee (LAC) Commence the Minimum Wage Consultation Process ?

In September of each year,

the three parties commence

tripartite consultations

Employer Union

Government

8

When Does the Labour Advisory Committee (LAC) Commence the Minimum Wage Consultation Process ?

Meeting for the decision on

figure or growth rate of minimum

wage is held in October. The

new minimum wage is effective

from 1st January of the

following year

Summary timeframe of the negotiation of minimum wage setting

9

Internal

meeting of the

Government

Internal

meeting of the

Employers

Internal

meeting of the

Unions

Meeting of

Government

and Employer

Meeting of

Government

and Unions

Meeting of

Employer

and Unions

In case of ConsensusNew

Minimum

Wage

Co

nse

nsu

s o

r

co

nfid

en

tial v

ote

Tripartite

consultation

(2nd round)

New minimum

wage is

applied

from 1 January

Quarter 4

July August September October

Internal

consultation of

each party

Bipartite

consultation

Tripartite

consultation (1st round)

Quarter 3

In c

ase

of n

o c

on

se

nsu

s

Reference from the Press Release of the Labour Advisory Committee in 2014

What are other allowances and fringe benefits ?

10

In addition, workers are also entitled

to meal allowance of voluntary overtime

works of 2,000 riels/day (equivalent to US$

0.50), or a free meal, as well as seniority bonus

of US$ 2 per month in their second year of

employment, rising to a maximum of US$ 11 in

their eleventh and subsequent years of

employment

As of 2016, the allowances and

benefits are:

attendance bonus US$ 10 per

month and transportation &

accommodation allowance

US$ 7 per month

1 January 2016 US$ 157 (Minimum wage US$ 140 + Attendance allowance US$ 10 + transportation &

accommodation allowance US$ 7)1 January 2015 US$ 145 (Minimum wage US$ 128 + Attendance allowance US$ 10 + transportation &

accommodation allowance US$ 7)1 February 2014 US$ 117 (Minimum wage US$ 100 + Attendance allowance US$ 10 + transportation &

accommodation allowance US$ 7)1 May 2013 US$ 97 (Minimum wage US$ 80 + Attendance allowance US$ 10 + transportation &

accommodation allowance US$ 7)1 September 2012 US$ 83 (Minimum wage US$ 61 + Attendance allowance US$ 10 + transportation &

accommodation US$ 7+ health care allowance US$ 5)

1 January 2012 US$ 73 (Minimum wage US$ 61 + Attendance allowance US$ 7 + health care allowance

US$ 5)1 March 2011 US$ 68 (Minimum wage US$ 61 + Attendance allowance US$ 7)

1 October 2010 US$ 66 (Minimum wage US$ 61 + Attendance allowance US$ 5)1 April 2008 US$ 61 (Minimum wage US$ 50 + Attendance allowance US$ 5 + living supports US$ 6)

1 January 2007 US$ 55 (Minimum wage US$ 50 + Attendance allowance US$ 5)1 August 2000 US$ 50 (Minimum wage US$ 45 + Attendance allowance US$ 5)

1997 US$ 40 (Minimum wage US$ 40

How has minimum wage in Cambodia evolved ?

11

Ministry of Labour and Vocational Training

Secretariat of the Labour Advisory Committee

Address៖ Building #3, Russian Federation Blvd.,

Sangkat Tekla-ak 1, Khan Tuol Kork,

Phnom Penh, Cambodia

Telephone ៖ 023 88 43 75

Fax ៖ 023 88 27 69

Website៖ www.mlvt.gov.kh