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CAMBODIA: Garment and Footwear Workers Set for US$190 Minimum Monthly Wage in 2020

The minimum monthly wage for workers in the country’s garment and footwear sectors is set to increase to US$190 (from its current level of $182) as of 1 January next year. In an additional move, workers in the two industries will be guaranteed a minimum monthly wage of $185 (up from $165 at present) during their probationary periods. All other benefits – including the $10 regular attendance bonus and the $7 monthly travel and housing allowance – remain unaffected.

The wage increase will apply to the country’s 800,000 garment and footwear workers and is in line with previous government assurances of incremental annual pay rises. Although the revised pay is lower than the $195 wage demanded by workers, it is higher than the $186 salary initially proposed by employers, many of whom were concerned the country’s output could become less price competitive should its garment exports to the EU lose their duty free entitlement.

In order to offset the higher operating costs occasioned by the wage increase, the government is proposing to introduce a number of compensatory measures for employers in the two sectors. These are said to include a cut in the applicable electricity tariff from $0.147 per kWh to $0.127 per kWh and a reduction in the corporate income tax rate from 20% to 15%. A date for the implementation of these measures has yet to be announced.

Content provided by Picture: HKTDC Research
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