Cambodia’s Garments Sector Calls For Support Amid Rising Labor Costs

Prime Minister Hun Sen
President of the ruling Cambodian People's Party (CPP) and Prime Minister Hun Sen attends a ceremony to mark the 68th anniversary of the establishment of the party in Phnom Penh, Cambodia, June 28, 2019. (Photo: REUTERS/Samrang Pring/File Photo)

Employers within the garments sector of Cambodia on Wednesday called on the government to help them resolve financial issues related to rising labor costs. They said the burden of minimum wage increases is taking a toll on expenses.

According to the Khmer Times, the Garment Manufacturers Association of Cambodia (GMAC) said on Wednesday that employers are bearing the brunt of increasing minimum wages and the government should consider this aspect of the talks regarding another increase.

Cambodian Prime Minister Hun Sen has been adding another $5 after the Labor Ministry, unions, and employers agree on a set increase for minimum wages. The GMAC is now asking for the government to not add another $5 this year.

Secretary-General for the GMAC, Ken Loo, said the point of not adding $5 to the agreed increase will reduce the pressure on employers who are also working hard to keep business afloat.

While some people think the government is covering costs for the additional $5, it is actually the employers within the garment sector who are shouldering the amount in question.

Loo further explained that aside from the $5 additional amount, employers also have to pay 2.6 percent on health insurances for workers when the new accident insurance regulation takes effect next year.

For Loo and others in the garments sector, the costs keep rising. He said the upcoming pension fund payment expected to take effect by year-end 2019 is "another heavy blow" on employer expenses and costs.

Amid increasing worries among employers, the Collective Union of Movement of Workers' President, Pav Sina, noted that if Cambodia heeds to GMAC calls for the $5 dissolution, "what the government has done for workers in the past will be meaningless."

Some union groups are also calling out the GMAC for its request. Vice President of the Free Trade Union, Mann Seng Hak, said the GMAC's request should not have been raised in the first place.

Mann argued that the government has already listened to employers' requests multiple times, but this time, the workers should be considered as well.

Meanwhile, another issue that continues to haunt the garments sector is the possibility that the European Union (EU) will dissolve the "Everything But Arms" (EBA) deal with Cambodia.

Earlier this month, the GMAC urged the bloc to not end the EBA deal with the country. They said the group has been complying with the United Nation's International Labor Organisation (ILO) regulations.

The association also noted that the ILO has been conducting annual assessments of Cambodia's garments sector factories to ensure that no human or worker rights are violated.

The EU launched a probe into the country's labor industry as reports emerged that many employees are suffering under the hands of their employers. The GMAC said companies under it are in full compliance with international laws.

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