Issue: August 2018

CAMBODIA - Law on Social Security

By: Phany Sok, a Lecturer, the Royal University of Law and Economics, Phnom Penh, Cambodia

I. Introduction

The Cambodian Law on Social Security Schemes for Persons Governed by the Labor Law (“the Law on Social Security”) was promulgated in 2002. The main intention of the law was to create two schemes to be responsible for occupational injuries and pensions, in the private sectors. The spirit of the law is also to strive to create other social schemes, such as health care, depending on the need of social development and the capacity of the economy.

This Law on Social Security is the first of its kind in the Kingdom of Cambodia after the genocide era. Even though social security is a complicated issue, this law laid out very basic provisions and leaves a lot of work to be filled in by regulations, such as sub-decrees and Prakas, for its full implementation.

The National Social Security Fund (NSSF) was established in 2007 to be responsible for receiving and managing, for the benefits of its members, a fund created from contributions by both employers and workers.

As of July 2018, only two Schemes are in operational: occupational risk and health care. The pension scheme is still under draft.

Since these two schemes came into effect, the Royal Government of Cambodia (RGC), in particular the Prime Minister, has been using this law as a propaganda tool to gain popularity from workers, especially low-skilled workers, like the factory workers and workers in informal economy, in the run-up to the national election which was held July 29, 2018. Therefore, the coverage of the Law on Social Security has recently been expanded to cover the workers in the informal economy. However, this article will not discuss the extension of the law to workers in the informal economy because it is unclear at this point whether or how the law will be enforced. Instead, this article will focus on the National Social Security Fund, the Occupational Risk Scheme, and the Health Care Scheme, including the latest developments on extra benefits for pregnant workers.

II. National Social Security Fund (NSSF)

NSS is an institution of public administration, with the mission of providing public social services. The NSSF is technically under the Ministry of Labour and Vocational Training, and financially under the Ministry of Economy and Finance. It is financially autonomous.

It is run by a governing body that consists of a representative from the Ministry of Labour and Vocational Training (MoLVT), a representative of the Council of Ministers (CoM), a representative of Ministry of Economy and Finance (MoEF), a representative of Ministry of Health (MoH), two representatives of employers, two representatives of workers, and an Executive Director of NSSF. The representative from MoLVT sits as president, while the rest are members.

NSSF manages the social security schemes. It does not only ensure that contributions from its members (workers) and employers are properly collected, utilized and invested, but also works with relevant agencies to study, monitor and raise awareness on how to prevent employment injury and occupational deceases.

An enterprise or establishment that is covered by the Labor Law is required to register itself and its employees with the NSSF.

III. Occupational Risk Scheme

The Occupational Risk Scheme is responsible for employment injuries and occupational diseases.

An “employment injury” is defined as “any accident inflicted, during working hours … on the body of the worker, regardless of whether it happened due to his or her work, or during working hours, whether or not the worker was at fault”; or an injury resulting from an accident happening during a direct commute to and from work. Occupational diseases are yet to be defined by the MoLVT.

The benefits under the Occupational Risk Scheme includes medical care, a daily allowance, a pension for disability, funeral benefits, and survivors’ pensions.

The Scheme started its operation in 2008. The contribution made to the NSSF under Occupational Risk Scheme is at the rate of 0.8% of workers’ monthly wage. In 2018, the cap of the monthly wage is at 1,200,000 riels (around USD 300), which made the cap of the contribution at 9,600 riels (around USD 2.4) per worker. This contribution is solely responsible for by employers.

IV. Health Care Scheme

Even though the Health Care Scheme is only aspirational under the Law on Social Security, it was implemented in 2016, before the Pension Scheme. The Scheme was created under Sub-Decree 01/16. The benefits under this Scheme consists of health care, medical care, and a daily allowance during a worker’s absence from work due to treatment or other non-occupational accidents and maternity leave. For the initial phase of implementation, benefits will only be available to direct members of NSSF and their survivors. Their dependents are not eligible for benefits as part of the scheme.

When it started in June 2016, contribution for Health Care Scheme was a shared responsibility of both workers and employers. Each party was responsible for 1.3% of a worker’s monthly wage, with a wage cap of 1,000,000 riels (around USD 250). In other words, monthly, each party would pay a maximum of 13,000 riels (around USD 3.25) to NSSF for the Health Care Scheme.

However, beginning January 2018, contributions to the Scheme became the sole responsibility of the employer. As with the Occupational Risk Scheme, the current cap of the monthly wage for the contribution is 1,200,000 riels, which made the contribution of 2.6% equal to 31,200 riels (around USD 7.8).

V. Pregnancies and Maternity Leave

Under the Labor Law, a female worker is entitled to 90 days of maternity leave with 50% of her salary if she has worked for her employer for a year or more. Under the Law on Social Security, she is also entitled to 70% of her average monthly wage during her maternity leave. From January 2018, a female worker also receives from NSSF a lump sum of 400,000 riels (USD 100), 800,00 riles (USD 200) or 1,200,000 riels (USD 300) when she delivers one, two or three babies respectively.

VI. Conclusion

This article has provided basic information on the current social security schemes in Cambodia. Because this section was written during a national election, during which RGC has issued many new regulations and laws, including an amendment of the Labor Law, it is important to bear in mind that the law is subject to change on short notice.

    Phany Sok

    Lecturer

    Phany Sok is a lecturer at the Royal University of Law and Economics, Phnom Penh, Cambodia.