Employment contract in Cambodia — FDC, UDC, probation

In 3 bullets

• Two contract types provided for by the 1997 Labour Law: FDC (Fixed-Duration Contract, ≤ 2 cumulative years) and UDC (Undetermined-Duration Contract). Beyond 2 years on an FDC, the contract is automatically requalified as a UDC.
• Probationary period: maximum 2 months for workers, 3 months for employees, 6 months for cadres (Article 68). No renewal possible.
• Written form mandatory for the FDC, strongly recommended for the UDC. Without a written contract, the contract is presumed to be a UDC and the burden of proof lies with the employer in the event of a dispute.

Legal framework

The employer-employee relationship in Cambodia is governed by the Labour Law (Royal Code CS/RKM/0397/01 of 13 March 1997), its subsequent amendments and the Prakas (ministerial decrees) of the Ministry of Labour (MoLVT). This law applies to any employee working on Cambodian soil, regardless of nationality: an expat signs a contract under Cambodian law as soon as they are paid by a local entity.

Civil servants, judges, military personnel and certain diplomatic staff are excluded from the scope and fall under specific statutes.

FDC — Fixed-Duration Contract

Characteristics

• Maximum duration 2 years (cumulative, renewals included).
• Written form mandatory — a verbal FDC is requalified as a UDC.
• Must state the precise start date and end date.
• Renewals possible as long as the cumulative duration remains ≤ 2 years.

Automatic requalification

Beyond 2 cumulative years, or if the employee continues to work after the end date without a new written contract, the FDC automatically becomes a UDC. This is one of the most frequent disputes brought before the Arbitration Council.

End-of-contract indemnity (FDC only)

On normal expiry of an FDC, the employer must pay a end-of-contract indemnity of 5% of the total gross salary received over the duration of the contract (Article 73). This indemnity is in addition to unused paid leave.

UDC — Undetermined-Duration Contract

Characteristics

• No end date.
• Written form not mandatory but strongly recommended: without a written contract, the employee is presumed to be on a UDC and any special condition (non-compete clause, bonuses, etc.) becomes virtually impossible to prove.
• Termination possible at the initiative of either party, subject to notice and grounds.

Termination and indemnities

Termination of a UDC entitles the employee to a seniority indemnity (equivalent to severance pay) paid every six months since the 2018 amendment. For detailed terms (notice, valid grounds, indemnities), see employee rights.

Probationary period

Article 68 of the Labour Law sets the maximum durations:

During the probationary period, termination is free on both sides, with no notice or indemnity.

Mandatory clauses

A written contract must at minimum state:

• Identity of the employer (corporate name, commercial register) and of the employee.
• Start date (and end date for an FDC).
• Place of work and job role.
• Remuneration (basic salary, bonuses, payment method).
• Weekly working time (default 48 h, see employee rights).
• Probationary period (if applicable).
• Applicable collective bargaining agreement (CBA), if any.

For an expat, also add: housing / flights / schooling packages, payment currency (most often USD), banking domiciliation.

Procedures linked to hiring

Once the contract is signed, the employer must:

1. Register the employee with the NSSF within 30 days of hiring — the employer bears the health care and work injury contribution. See nssf.gov.kh.
2. File the monthly salary declaration with the Ministry of Labour (personnel declaration form).
3. Withhold the Tax on Salary (ToS) — progressive schedule detailed in tax on salary ToS.
4. For expats, file the work permit on fwcms.mlvt.gov.kh — see work permit.

Salary — rules to know

• No cross-industry minimum wage: only the textile / footwear / leather goods sector has a statutory minimum (208 USD/month in 2024, negotiated annually by the National Council on Minimum Wage).
• For other sectors, salary is freely negotiated.
• Payment mandatorily in cash (notes or bank transfer); in-kind payments are capped.
• At least once a month for fixed salaries (Article 116).
• Currency: the law does not impose the riel, USD is very widely used for expat contracts.

Common pitfalls

FAQ

Does the contract have to be in Khmer?

The law requires it to be understandable by both parties. In practice, expat contracts are drafted in English (and in French for francophone organisations); for Cambodian employees, a Khmer version is expected. A bilingual Khmer / working language version is the norm in serious companies.

Can you sign a French fixed-term contract then be “seconded”?

No — as soon as you work physically in Cambodia and are paid (even by a foreign entity), Cambodian Labour Law applies. The French contract does not amount to a local exemption, and you risk tax and social security reassessment on the Cambodian side.

What is the difference between worker, employee and cadre?

• Worker (ouvrier): manual work, paid by the hour or by the piece.
• Employee (employé): intellectual or administrative non-managerial work.
• Cadre / specialist: profession requiring a university or technical qualification, or a supervisory role.

The distinction essentially serves to set the maximum probation duration (Article 68) and certain indemnity schedules.

Is remote work recognised?

No dedicated framework in the 1997 law. Remote work is organised contractually and remains subject to the general regime: working time, NSSF, ToS, etc. For remote workers paid abroad, see tax residency.

What to do in case of a dispute?

First step: conciliation at the Ministry of Labour. If this fails, the Arbitration Council issues an award within a few weeks — heavily used for unfair dismissals. Beyond that, ordinary judicial proceedings.