Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.
For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.
For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.
As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.
While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.
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A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.
Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in Cambodia can be expensive, stressful, and time-consuming. It's not for the faint of heart.
To set up a subsidiary in Cambodia, you have to:
If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for Cambodia.
An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.
An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.
Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.
At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.
Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:
Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.
Paying employees in Cambodia is not the same as paying workers in your own country. Employees have to be paid using Cambodia's employment and payroll standards.
This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.
Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.
After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:
One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.
Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.
Outside of EORs acting as the full admin employer, many also provide remote payroll.
For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.
We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.
A standard full-time workweek is 48 hours.
Overtime is paid at the rate of 150% of the regular pay.
For overtime between 10 PM and 5 AM, the pay rate is 200%.
Employer
Laborers are paid at least every 16 days. Regular employee wages are paid monthly.
There is no statutory requirement for a 13th-month salary in Cambodia.
PTO is calculated by the:
There are 15 public holidays.
Employees are entitled to up to 6 months of sick leave per year as long as they are able to provide a medical certificate.
The employee will receive 100.00% of their regular salary rate for the first month of sickness, the two months that follow are paid at 60.00%, and the remainder of the leave is unpaid.
An employer holds the right to dismiss an employee following more than six months of sick leave.
Maternity leave is 90 days and the woman is entitled to 50% of their pay.
There are no provisions in the law regarding paternity leave.
Parental leave falls under special leave.
Special leave– Employees are entitled to up to 7 days per event for matters that affect an immediate family member.
An employee is entitled to 7 days of unpaid leave in the event of their wedding.
In the event of the death of an immediate member, an employee is entitled to bereavement leave.
For the death of a father, mother, spouse, or child, an employee is entitled to seven days of unpaid leave.
Fixed-term contracts- If the employer and employee agree, a fixed-term contract can be terminated before the end date. To do so, both the employee and employee must sign an agreement in front of a labor inspector. If one of the parties does not agree, the employment contract cannot be terminated unless for reasons of gross misconduct or force majeure.
Indefinite employment contracts- Written notice must be given. If the employer initiates the dismissal, then just cause must be provided. The employer must notify the Ministry of Labor
Upon termination, the employee is entitled to request a certificate of employment stating the dates of employment and information about the position held. If the employer refuses to provide this, the employer must pay the employee for damages.
The notice period in Cambodia is based on the duration of employment as well as the type of employment contract:
For indefinite employment contracts:
Fixed-Term Contracts:
During the notice period, the employee is entitled to 2 days’ paid leave per week for the purpose of looking for employment.
The Severance Pay in Cambodia:
If the employer fails to give written notice or does not follow the notice period, compensation must be given to the employee for the amount that the employee would have earned during the notice period.
The probation period varies depending on the skill level of the employee:
