Seniority payment in Cambodia is a mandatory financial entitlement for employees under Undetermined Duration Contracts (UDCs) and is paid twice per year, amounting to 15 days of wages and fringe benefits per year of employment.
Key details:
- Applicability: Seniority payment applies to employees on UDCs only, not to those on fixed duration contracts, who instead receive severance.
- Calculation: The payment equals 15 days of wages and other fringe benefits (such as overtime, bonuses, commissions) per year, split into 7.5 days paid in June and 7.5 days in December.
- First Year: Employees working for at least one month but less than six months in the first year are entitled to 7.5 days’ pay; those who work six months or more are entitled to the full 15 days.
- Retroactive payments: Employees with service before 2019 are eligible for “back pay,” calculated based on their seniority accrued from 2008 to 2018, with specifics depending on sector (e.g., garment vs. other sectors).
- When not paid: Seniority payment is not required if termination is due to serious misconduct or resignation by the employee.
- Legal Framework: These requirements are based on the 2018 amendment to the Cambodian Labor Law and Prakas No. 443 issued by the Ministry of Labor and Vocational Training.
Thus, employers in Cambodia must pay their qualifying employees half the yearly seniority payment every six months, with strict rules on calculation and exceptions based on contract type and termination reasons.
