Cambodia: when should an employer pay a worker?

An employer might have a question “when should the employer pay the worker?” Like the employer, a worker might ask a question “when should the worker be paid?” How often is an employer required to pay worker? This article will answer to these questions.

1. Wage is paid after performance of labor or service.

Article 664 of the Cambodia Civil Code provides that an employment contract is formed by the promise of one party to work for the other party and the other party to pay wages for that work. The party who promises to work is called the worker, and the other party is called the employer. Based on this provision, we can make an assumption on the order of obligations to be performed by the parties; and according to this order, work must be performed by worker before wage is paid by the employer.

The above assumption of Article 664 is in line with the principle of “no-work-no-pay”. Accordingly, worker has to perform the labor or work first. And then, as consideration for the performance of labor or service, the employer has to pay wage to the worker. That is why, in most case of employment relations, the employer is called the debtor while the worker is called the creditor.

2. Wage is paid two times per month.

Article 116 of the Labor Law reads:

Laborer’s wages shall be paid at least two times per month, at a maximum of sixteen-day intervals.

Employee’s wages must be paid at least once per month.

Commissions due to sale agents or commercial representatives must be paid at least every three months.

For all task-work or piecework that is to be executed for longer than fifteen days, the dates of payment can be fixed by agreement, but the laborer must receive partial payments every fifteen days and be paid in full in the week following the delivery of work. 

In the event of termination of a labor contract, wage and indemnity of any kind must be paid within forty-eight hours following the date of termination of work.

According to Article 116 above, the wage of laborer (who performs mostly manual labor in return for remuneration under the direction of employer or his representative) must be paid at least two times per month. On the other hand, the wage of an employee or helper (who is contracted to assist the employer in return for remuneration, but does not perform manual labor fully or who does so incidentally) must be paid at least once per month. 

According to above Article 116 of the Labor Law, before January 2019, there were two different practices in which employers pay the laborers twice a month and pay the employees once a month. In order to guarantee workers’ right to wages and minimize the workers’ risk of not being paid by the employer, the Ministry of Labor and Vocational Training has issued Prakas No. 442 dated 21 September 2018 on the payment of wages to workers. 

This Prakas No. 442 requires that employers or owners of enterprises and establishments, from January 2019, pay laborers and employees two times per month, in which the first payment of wage must be made in the second week and the second payment of wage must be made in the fourth week of each month in the following manners:

• First payment is equal to 50% of actual wage per month;

• Second payment is equal to the remaining amount of actual wage, perquisites and other benefits that workers receive in each month.

3. Late payment of wages

Pursuant to Article 117 of the Labor Law, if the employer pays unreasonably late, the Labor Inspector must instruct the employer to pay wage to the workers by setting the deadline by which the wage must be paid. If the employer fails to pay within this deadline, the Labor Inspector must write the report and send the case, at no cost, to the competent court which may take any measure to keep or attach the employer’s assets for the interest of the workers, including appointing a provisional administrator.  The Labor Inspector can then make all kinds of actions or charges to force the employer to fulfill his obligations toward his workers. 

Article 365 of the Labor Law stipulates that, regardless of civil liability, a fine of 31 to 60 basic daily wage will be imposed on those who violate the provision of Article 116 of the Labor Law, which requires employers to pay the worker based on the schedule mentioned above. According to the Joint Prakas of the Ministry of Economy and Finance and the Ministry of Labor and Vocational Training dated 06 June 2016 on Penalties for Violators of the Labor Law, if the employer pays the worker overdue or does not comply with the number of times of wage payment specified in accordance with Article 116, the penalty by the Ministry of Labor and Vocational Training is equal to 42 days of the basic daily wage, which is equal to 1,680,000 Riels, while the fine in accordance with the decision of the tribunal is from 31 to 60 days of the basic daily wage, which ranges from 1,240,000 Riels to 2,400,000 Riels.

In the event of a wage dispute, it is the employer who must provide proof of payment. This proof can be the signature of the worker concerned or those of two witnesses if the worker is illiterate, and this proof will be put in the payroll ledger that the employer is required to keep. listed in the payroll book that the employer is obliged to keep. (Article 118, the Labor Law)

This text is not legal opinion or advice.