The Southeast Asian kingdom’s Ministry of Social Affairs said it would hike the minimum wage to $75 a month from $61.
Cambodian factories also currently pay workers a mandatory $5 health allowance. The government has yet to announce whether to incorporate the health subsidy into the new minimum wage. Doing so would affect how overtime pay, a key salary component for many Cambodian garment workers, is calculated. The changes are slated to take place May 1.
According to Moeun Tola, head of the labor program at the Community Legal Education Centre, a local rights group, unions had entered tripartite negotiations with the government and the Garment Manufacturers Association of Cambodia asking for an increase to $100.
The GMAC had originally offered an increase to $73, though it was reportedly prodded to raise wages by another $2 by the Cambodian Prime Minister, Hun Sen, who has spoken out in the past year about the need for garment factories in his country to solve problems such as mass faintings and reports of forced overtime labor.
GMAC officials were not available for comment.
“The unions are not happy with the decision and are appealing to the government to reconsider,” Tola said in a phone interview.
At least one union has already threatened mass demonstrations. Rong Chhun, president of the Cambodian Confederation of Unions, told local media Thursday that he was still insisting on an increase to $100 and would hold a strike if his demands were not met.
According to Tola, reports from Cambodia’s Ministry of Planning suggest that individuals living in Phnom Penh, the country’s capital and where much of the garment industry is situated, need to make at least $124 a month to sustain a living.
Cambodia is the latest in a series of Southeast Asian countries, including Indonesia and Thailand, that have recently bumped their minimum wage levels. As recently as 2010, the minimum wage in Cambodia, which relies heavily on garment and footwear exports, was $50.