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Private sector worried over universal wage law

Employees leave a garment factory in Phnom Penh’s Meanchey district after work.
Employees leave a garment factory in Phnom Penh’s Meanchey district after work. Pha Lina

Private sector worried over universal wage law

The private sector is concerned that the newly proposed universal minimum wage law, which is reportedly being drafted by the government and comes on the heels of numerous new labour regulations, has created a climate of uncertainty, according to an industry expert.

Sok Lor, Secretary-General of the Cambodian Federation of Employers, said at an event yesterday that new labour regulations, which include a national social security scheme and a higher minimum wage for garment workers, have already put businesses on edge.

Additionally, he added that the government has been in talks about introducing a new federal minimum wage law, rather than solely focusing on the garment sector, for months now. The Ministry of Labor is expected to send a draft of the law to the Council of Ministers by the end of the year.

“This draft would set up a framework for minimum wage negotiations,” he said, stressing that an official wage was not expected to be set for months as further discussions within the government are pending.

Lor said that while the government has provided little insight into its own negotiations, he could only hypothesise whether a universal wage law would be modeled after the garment industry’s new minimum wage of $170 per month.

Regardless, he said that the private sector would not be able to fight any government decision.

“It is politically incorrect to say employees should not have increased wages,” he said. “But from the employer’s position, wage has to be attached to productivity.”

However, he expressed concerns that new regulations were merely stemming from populist policies linked to the current political climate.

“The government has to have something new to announce intermittently, considering the political state of the country,” he said. “However, after the election, I believe some labour policies will continue to be formulated, but the process will probably become slower – especially in relation to universal minimum wage.”

Moeun Tola, director of labour rights group Central, said that if a universal minimum wage is adopted, it should reflect the increased cost of living, not an employer’s perception of productivity or profits.

“In the city, the cost of housing is very high, and prices increase every day because of inflation,” he said. “Maybe my expectation is very high, but I think at least [a minimum wage of] $180 for all workers would be good.”

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