Starting this month, garment and footwear workers will be paid their wages in twice per month. While many workers are happy with the new directive, some are worried that they may not be able to manage their finances
Last September, Labour Minister Ith Samheng issued a directive for all owners of enterprises and establishments to pay wages to their workers two times per month, a move aimed at the garment industry.
Mr Samheng says that the first payment should be 50 percent of the net wage with the remainder being paid in a second instalment along with other remunerations and benefits.
Chab Sokrith, 24, a team leader at Yi Guang International factory in Kampong Speu province’s Kong Pisey district, says his factory has announced it will pay the first instalment on January 25 and the second on February 10.
He notes that the workers and the factory management agreed with the decision.
“I do not know the wage payment arrangement in other factories, but our management told workers’ representatives last month that the first wage payment will be on January 25 and the remainder, including other benefits, on February 10,” he says. “The workers agreed to this.”
Mr Sokrith says that before the new directive, the workers often received their wages between the 8th and 10th of each month.
“The workers did not object to the new directive on twice-monthly wage payments when the factory announced it to them,” Mr Sokrith says. “For me, I do not worry about spending for daily needs when my wage is paid twice per month because my wife and I know how to manage our budget.”
“However, I worry whether some workers who have loans with banks can keep some money back to meet their monthly repayments when their salary is divided into two,” he adds.
Sitting on an old bed under the mango tree in front of her rental room in Phnom Penh’s Meanchey district, Khuth Sreylin, 36, a garment worker in a factory in Chak Angre Krom commune, says that the first instalment of her wages will also be paid on January 25.
“I do not know how I will be able to manage my spending yet because I have not yet got the wages for this month,” she says. “I was informed that the workers will get their first payment on January 25 and the second on February 10.”
Ms Sreylin says however that she thinks the twice-monthly wage payment will be better than the previous arrangement because she will get faster access to her money without having to wait until the end of the month.
“Last year, I received my wages on the 8th or 10th of the following month and then I would have to wait for one more month to be paid again.” she says. “But this month I will only have to wait for two weeks before I get paid again.”
Ms Sreylin notes that her salary alone cannot support her family but her husband gives her all his wages so that she can manage to budget.
“I am now earning $182 per month, but if I earn more than $200 I will be able to support my family, pay rent and other expenses,” she says.
Another worker who only gave her name as Pheap and works in a factory in the Phnom Penh Special Economic Zone says that she is happy to receive her wages twice a month because it can help her support her family without having to wait for a whole month as before.
“I will be paid some of my wages in 15 days unlike before when I had to wait for 30 days,” she notes. “It will help me to spend faster for my family and we also do not have to worry about employers absconding without paying wages.”
Ms Pheap says that she has not taken out any bank loan but in the past she sometimes borrowed from friends to spend at the end of a month before she received her wages the following month.
“It is funny for me that I could not manage with my wage,” she says. “However this month my wage is being increased to $182 per month and including benefits I will be able to get more than $200 per month.”
“I think I will not have to borrow from my friends any more,” Ms Pheap adds.
When issuing the directive, Mr Samheng had warned that the ministry would take legal action against factory owners who did not pay their employees two times per month.
“They must follow because it is a directive and if they do not comply they will be fined and also face court action if they continue ignoring the directive,” he said. “So the enterprises and establishments covered by the provisions of the Labor Law must follow.”
In November, the Garment Manufacturers Association in Cambodia signed an agreement with Acleda Bank Plc for a payroll scheme for garment, shoes and bag factory workers nationwide.
Van Sou Ieng, GMAC chairman, said at the time that since all factory owners are to pay wages twice a month starting from January 1, they will require a good service which is quick and credible from partners such as Acleda.
Far Saly, National Trade Unions Coalition president, says that he supports the government and Labour Ministry on the twice-monthly wage payment arrangement but notes that it will be hard work for some factories to prepare paying out the first instalment this month after having just finished paying out the December wages.
Mr Saly also says that some workers are not too keen on the twice-monthly wage scheme because they are worried they will spend all the money from the first instalment and will not have enough to service their bank loans at the end of the month.
Labour Ministry spokesman Heng Sour says that some workers are worried about overspending when their wage is paid twice a month, but believes that they will be able to adjust their spending habits over time.
“I think that within three months the workers will become familiar with the new arrangement and adjust their budgets accordingly,” he says. “The reason why the government wants factories to pay wages two times per month is to benefit the workers.
Mr Sour notes that some workers have found that they needed money to spend for their families in the middle of the month and feels that those workers who are worried about overspending now will be able to adjust to budgeting for twice a month.
“It is illegal for enterprises and establishments, big or small, not to pay workers their wages twice a month and the workers can inform the ministry or provincial labour departments,” he says, adding that labour officials will investigate any errant factory.