Labor and employer representatives reach unanimous agreement to defer wage determination amid global economic uncertainties
PHNOM PENH, CAMBODIA – Prime Minister Hun Manet will make the final determination on Cambodia’s minimum wage for factory workers in 2026, following a unanimous decision by labor and employer representatives to defer the contentious wage-setting process to the government.
The announcement came after extensive negotiations within Cambodia’s National Minimum Wage Council, which concluded its deliberations on September 10, 2025, according to a statement from the Ministry of Labour and Vocational Training.
Stakeholders Agree on Government Decision
Representatives from both worker unions and employer organizations unanimously agreed not to propose specific wage figures for the garment, textile, footwear, and travel goods sectors, citing concerns over potential US reciprocal tariffs and current labor market conditions.
“Based on the potential impacts of the imposition of US reciprocal tariffs and the current labour market conditions, the representatives of both workers and employers have unanimously agreed not to propose any specific wage figure,” the ministry statement revealed. “They will leave it to the government to make a decision, based on Cambodia’s competitiveness and the country’s social and economic conditions.”
Extensive Consultation Process
The decision followed an intensive consultation process involving 21 separate meetings over several months, including:
- Three tripartite meetings between workers, employers, and government representatives
- Three bilateral meetings between workers and employers
- Multiple internal meetings among stakeholder groups
- Various government consultation sessions
A final tripartite meeting is scheduled for September 17, 2025, at 3:00 PM to complete formal procedures required under Cambodia’s minimum wage law.
Economic Context Influences Decision
Economist Lor Vichet characterized the decision to defer to government as a “reasonable solution” given current global economic uncertainties. He emphasized that multiple factors must be considered in minimum wage determinations, including:
- Global political and economic context
- Import-export tax rates and trade policies
- Worker productivity levels
- International market competitiveness
- Foreign direct investment attraction capabilities
Current Wage Levels
Cambodia’s minimum wage for garment, textile, footwear, and travel goods workers currently stands at $208 per month as of 2025, representing a $4 increase from the $204 rate established in 2024. Many workers earn above this base rate through overtime compensation and seniority payments.
Implications for Cambodia’s Manufacturing Sector
The wage decision carries significant implications for Cambodia’s crucial manufacturing sector, which employs hundreds of thousands of workers and serves as a backbone of the country’s export economy. The deferral to government decision-making reflects the complex balance required between worker welfare and maintaining Cambodia’s competitive position in global supply chains.
The final wage determination for 2026 is expected to be announced following the completion of formal procedures later this month.
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Source Reference: This article is based on reporting by Asian News Network. Original article: “Cambodian government asked to make final decision on factory minimum wage” – Asian News Network, September 11, 2025.
