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Spotlight: Cambodia Raises Minimum Wage For Garment, Footwear Sectors For 2020

by September 21, 2019 Market

The Cambodian government set a new monthly minimum wage for the country’s multi-billion-dollar garment and footwear industries, at 190 U.S. dollars for 2020, up 4.39 percent from the current 182 dollars, Labour Minister, Ith Samheng announced.

The announcement came, after the National Council for Minimum Wage voted on a minimum wage of 187 dollars for next year, which was then upped an additional three dollars by the government.

The National Council for Minimum Wage comprised of 51 members, including 17 each from the government, the garment manufacturers, and the trade unions.

Today, the National Council for Minimum Wage decided on the monthly minimum wage of 187 dollars and Cambodian Prime Minister, Samdech Techo Hun Sen added another three dollars, so the minimum wage for the garment and footwear industries for 2020 is 190 dollars a month, Samheng told reporters after the vote.

Besides the monthly minimum wage, workers will also receive other fringe benefits, including an extra 10 dollars per month for regular attendance and an extra seven dollars per month for transportation and rent.

The new wage will take effect on Jan 1, 2020.

We believe that the wage hike will further improve the livelihoods of our garment and footwear workers, he said.

He added that the new minimum wage is similar to that of neighbouring Vietnam.

According to Samheng, to ease the expense burden of the manufacturers, the government is considering to further lower the electricity cost for garment and footwear industries to 0.127 U.S. dollar per kilowatt-hour, from the current 0.147 dollar.

Also, the government is considering to lower the rate of corporate income tax for garment and footwear exporters, from 20 percent to 15 percent.

Nang Sothy, co-chair of the Government-Private Working Group on Industrial Relations, said, employers are happy to raise wage for workers and believe that the increase will better improve the workers’ living conditions.

Ath Thorn, president of the Cambodian Labour Confederation, said, the minimum wage hike is a new positive step towards improving workers’ livelihoods.

Garment and footwear industries are the largest foreign exchange earner for the Southeast Asian nation, and the industries consist of about 1,100 factories with approximately 750,000 workers, mostly female.