MLVT – New Instruction on Contract Suspension
On 15 March 2023, the Ministry of Labor and Vocational Training (“MLVT”) issued Instruction No.020/23 (“Instruction No.020/23”), which sets out new measures on the suspension of Employment Contracts and NSSF Contribution Payments for sectors seriously impacted by the economic crisis.
The industries concerned under Instruction No.020/23 are the textile, garment, footwear, travel goods, and bag sectors. According to Instruction No. 020/23, from 1 April 2023, cash interventions will be implemented onwards as part of the contract suspensions which have been reported to the MLVT. Where an employee faces such suspension, the employee will be eligible to receive the following allowances:
- 7 days to 14 days employment suspension: USD 20 from Royal Government and USD 15 from the employer.
- 15 days to 1-month employment suspension: USD 40 from the Royal Government and USD 30 from the employer.
To qualify for the cash intervention, the MLVT requires employers suspending contracts to take the following steps:
- The employer must first apply for employment contract suspension at least 5 working days before the date of suspension via the MLVT’s website (http://suspension.mlvt.gov.kh).
- Employers must notify employees under suspension on the date their contracts will be suspended and complete a form that needs to be submitted to MLVT online with (i) a Cambodian ID card number and (ii) a Personal Contact number (or the Contact Number of spouses, children, parents, or siblings) of the employee.
- Employer submits those details to MLVT and on MLVT approving the suspension, Wing Bank will send a message to affected employees 10 days after their employment is suspended informing them to withdraw the relevant government allowances.
- Employees receiving the text from Wing Bank will have another 10 days to collect their allowance from Wing Bank.
After two working days from receiving the request letter for the suspension of employment contracts, the Labor inspectorate will conduct audits and check the enterprise under suspension. If there is no extension of the suspension or employers anticipate an earlier return to work before the expiration of the suspension period, employers must provide notice to MLVT at least 2 working days in advance.
Employers must also ensure that employees have affixed their thumbprint on the form to MLVT which, if missing, the employer will need to bear the cost of the whole allowance. Employers are also required to abide by the suspension procedures as stated under the law.