Cambodia raises minimum wage for textile and garment sectors for 2023

Cambodia has increased its monthly minimum wage to US$200 from the current US$194. The minimum wage standard only applies to the textile, clothing and footwear industries.

Workers will continue to receive their benefits such as attendance bonuses, travel and accommodation bonuses, meal allowances and overtime pay.

The Cambodian government has agreed to raise the minimum wage for the country’s textile, garment and footwear (TGF) industries to $200 per month from the current 194 USD per month. Unlike other countries, the minimum wage in Cambodia applies only to specific industries.

The National Council on Minimum Wages (NCMW), a tripartite body with equal representation from trade unions, employers’ associations and government sets the minimum wage. The Ministry of Labor and Skills Training announced the results of a three-party vote on four possible wage increases: $198, $206, $210 and $213. Of the 51 council members, 46 voted for US$198, which was raised to US$200 after an intervention by Cambodian Prime Minister Hun Sen.

To determine the minimum wage, the NCMW considers the following criteria:

  • Inflation;
  • Cost of life;
  • Productivity;
  • Competitiveness;
  • Sector profitability; and
  • The current labor market situation.

The new salary will be effective from January 1, 2023.

What other benefits do workers receive?

In addition to the minimum wage, workers will also receive the following benefits:

  1. Attendance bonus — $10 per month;
  2. Travel and accommodation costs — USD 7 per month;
  3. Meal allowances — $0.50 per day; and
  4. Overtime and seniority bonus — US$2 to US$11 per month for those between the second and eleventh year of work.

Probationary workers are to receive US$198 per month.

Workers who are paid based on productivity can earn more than minimum wage; however, if the amount they produce earns them less than minimum wage, the employer must add the remainder to a total of $200 or $198 for probationary workers.

The textile, garment and footwear industries continue to be the lifeline of the Cambodian economy

Textile, garment and footwear manufacturing, or TGF, continues to be the backbone of Cambodia’s economy, despite efforts to diversify. The industries are the largest employers in the country with over 700,000 workers and account for 80% of total export earnings.

Data from the Garment Manufacturers Association of Cambodia (GMAC) showed that exports of textile-related products reached US$11.3 billion in 2021, a 15% increase from 2020. total, clothing accounted for about 8 billion US dollars, shoes 1.3 billion US dollars. billion, and travel goods (backpacks, handbags, wallets, suitcases, etc.) US$1.4 billion, and other related products, US$0.49 billion.

Cambodia’s TGF industries suffered at the height of the pandemic, with some estimates suggesting that half of all factories in the first half of 2020 had to shut down production, either temporarily or permanently.

In early 2022, the Cambodian government launched the Garment, Footwear and Travel Goods Sector Development Strategy 2022-2027 with the aim of developing TGF manufacturing into high value-added sustainable industries capable of supporting economic diversification.

The strategy focuses on these key measures:

  • Build human resource capacity to increase productivity and create better career paths for workers;
  • Continue to improve the well-being and working conditions of workers;
  • Increase foreign and domestic investment with emphasis on producing high-end products; and;
  • Develop new export markets.

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