Speculation has been ongoing with regards to the enforcement of work permit requirements for foreigners employed in Cambodia. Acknowledging the lack of both clarity and official guidance on the topic, the B2B team and Vo Vanarith, head of Sciaroni & Associates’ Labour Practice Group, highlight the key information that each foreign worker in Cambodia (current and prospective) should be aware of with respect to both work permits and the equally important, yet often overlooked, requirement of employment cards.
The Legal Framework
The Labour Law, adopted in 1997 and amended in 2007, is the overarching law governing employment relationships within the territory of Cambodia, regardless of the nationalities or residences of the parties to an employment agreement. Articles 261 and 262 of the Labour Law directly address work permit and employment card requirements relating to foreigners. Article 261 states “No foreigner can work unless he possesses a work permit and an employment card issued by the Ministry in charge of labour”. Foreign nationals wishing to work in Cambodia must also meet the following conditions:
a) have a job offer from an employer compliant with relevant regulations regarding employment of foreign nationals
b) have legally entered the Kingdom of Cambodia
c) possess a valid passport
d) possess a valid residency permit
e) be fit for the relevant job
f) have no contagious diseases
Under current practice, foreign nationals working or doing business in Cambodia and holding either an E visa (also known as a “business visa” or “ordinary visa”) or a K visa (also known as a “permanent visa”) are required to have a work permit and employment card.
What are Work Permits and Employment Cards?
This question is commonly asked by foreigners working in Cambodia, as many foreign employees have never laid eyes on either of these two documents. Given the recent crackdown by the labour and immigration authorities on non-compliance with the provisions of Articles 261 and 262 of the Labour Law, many foreign employees are anxious with respect to whether they and/or their employer are compliant with the Labour Law and the consequences of such non-compliance, as discussed below.
Prakas No. 352 issued by the Ministry of Labour and Vocational Training on 17 August 2016 has introduced the “Foreign Workers Centralised Management System” to manage the employment of foreign workers and work permits in Cambodia through an online system (www.fwcms.mlvt.gov.kh). The new system was implemented on 1 September 2016.
A work permit and an employment card are two separate documents, although they may both be requested in a single application submitted online.
The application for a work permit and employment card may be made at any time. However, a foreign employee quota approval, as discussed below, is required as one of several supporting documents to the issuance of a work permit and employment card to a foreign employee. Work permits and employment cards must be renewed annually before the end of March each year.
Foreign Employee Quota
Under the Labour Law, the total percentage of foreign workers employed by a given enterprise cannot exceed 10 percent of the overall staff. An application for a “foreign quota approval” from the Ministry of Labour must be submitted between 1 September and 30 November in each year preceding a year in which the aforementioned limit is exceeded.
We note that the Minister of Labour may approve a request for an exemption to the above-mentioned 10 percent limit, at his or her discretion, if the enterprise requires employees with specific skills which are currently unavailable in Cambodia.
Legal Responsibility and Sanctions
It is the responsibility of an employer to assist each of its foreign employees to request and secure a work permit and an employment card.
Under Cambodian law, both the employer and the employee are liable to be sanctioned for failing to comply with the abovementioned work permit and employment card requirements. In July 2014, a joint Prakas between the Ministry of Labour and the Ministry of Interior was issued to establish the Joint Inspection Team, whose purpose is to carry out inspections nationwide with respect to the compliance of enterprises employing foreigners. The Joint Inspection Team is comprised of officials from the General Department of Immigration and the General Department of Labour.
According to the Labour Law, an employer that hires a foreigner without an employment card may face the following sanctions for non-compliance:
- an approximate fine of between $610 to $900 (noting that it is unclear whether this fine must be paid for each non-compliant individual staff member or applied as a single fine for all non-compliant staff)
- imprisonment from between one to three months for subsequent non-compliance
We are not aware of any cases where the labour authorities have enforced the above sanctions against employers. Nonetheless, employees are not exonerated from personal responsibility. During an inspection by the Joint Inspection Team, an employee may face a fine of approximately $610 to $900 if the team finds that the foreign employee does not possess a valid work permit. Such a fine is made in accordance with the Joint Prakas on the fine for violations of labour law provisions dated 6 June 2016.
Finally, we note that a foreigner working in Cambodia without a valid work permit is, under Cambodian law, liable for deportation. While uncommon in practice, there have been limited cases where such action was taken by the authorities.
Retroactive Payments upon Application for a Work Permit and Employment Card
As a matter of current practice, at the time of an application for a foreign work permit and employment card, the Ministry of Labour will impose retroactive payments (tax fees) for each past year that the foreign individual is found to have undertaken employment in Cambodia without a valid work permit and employment card. We note that the existence of multiple business visas in an individual’s passport (in the absence of the individual ever holding a work permit or employee card) may be used to evidence non-compliance and a retroactive payment (tax fees) of approximately $100 will be imposed for each year that the individual is found to have been working without a valid work permit and employee card.
E Visa Extensions
It has come to our attention that, as a matter of practice, if a person attends the General Department of Immigration to extend his or her E visa and does not possess a valid work permit, the handling officer may caution him or her that his or her visa may not be extended the following time unless he or she possesses a valid a work permit and employment card. However, at present, we are not aware of any extensions being denied on this ground.
Preparing for Labour Inspections
Enterprises employing foreign staff that receive a visit by the Joint Inspection Team, should present the following documents:
- declaration of personnel
- declaration of movement of staff (history of employee hires and terminations)
- registration of employment contracts for each foreign employee
- foreign employee quota approval
- valid passports and appropriate visas for each foreign employee
- work permits and employment cards for each foreign employee, and entry-exit notations if applicable
We note that the foreign employees of an enterprise may be required to present themselves during a visit by the Joint Inspection Team.
Independent Contractors, Volunteers and the Unemployed
While the Labor Law does not specifically refer to independent contractors or freelancers as requiring a work permit and employment card, in practice, it is the position of the Ministry of Labour that such individuals are required to do so for the purposes of the Labour Law. The enforcement of work permit and employment card requirements with respect to retirees and volunteers, however, remains unclear. As noted above, given that the current enforcement focus of the authorities remains on E and K visa holders, it is possible that the immigration and/or labour authorities may require retirees or volunteers holding E visas to present work permits and employment cards. In such circumstances, a volunteer or retiree holding an E visa may attempt to convince the labor and/or immigration authorities that they do not fall under the scope of the Labour Law by evidencing that they are not employed or working in Cambodia despite holding an E visa.
Potential New E Visas
We have received information from the authorities that the introduction of different types of E visas is being actively considered. For the time being, however, we are not aware as to which type of any proposed new E visa may be exempt from the current work permit and employment card requirements or, furthermore, as to which types of individuals such new visas are intended to apply.