Sourcing Cambodia: Minimum wage increase in 2024
On 1 January 2024, the Cambodian minimum wage will increase by 2 per cent.
Cambodia will increase the minimum wage for the textile, clothing and footwear sector in 2024, in line with a decision by the National Minimum Wage Council (NCMW), a tripartite Cambodian organization with equal representation of trade unions, employers' associations and the government.
The new minimum wage will thus be increased on 1 January 2024 to USD 204 per month for regular workers and USD 202 per month for probationary workers. This represents a 2% increase over the 2023 monthly salary of USD 200.
In addition to the minimum wage, workers will also benefit from the following benefits:
• Presence premium – USD 10 per month,
• Travel and accommodation costs – USD 7 per month,
• Meal allowance: USD 0.50 per day,
• Overtime and seniority allowance — USD 2 to 11 per month for persons with two to eleven years of service.
The increase is far from responding to what the unions had requested in a context of inflation that is accelerating (5 per cent in 2022). However, it intervenes in a context of crisis for the clothing sector. This represents about a third of Cambodia's GDP, but has slowed significantly since the outbreak of the pandemic in 2020.
Between January and July, exports of clothing and footwear fell by 20.44% ($7.89 billion in 2022 compared to $6.27 billion in 2023), reflecting weak global demand.
Moreover, Cambodia lost some of its preferential trade advantages with the European Union due to human rights concerns, resulting in higher tariffs on exports.
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Source(s): FRG | Asean briefing
Editor(s): C. MELOEN