More bad news for Cambodia’s garment industry: Workers who have been furloughed or laid off amid the growing COVID-19 crisis will receive a much smaller partial salary than previously promised.
In a press conference in the capital of Phnom Penh Tuesday, Prime Minister Hun Sen said suspended garment workers will receive a total of $70, or roughly 37 percent of the minimum wage of $190 per month. Factory owners will now be required by law to pay $30, rather than $114. The government will still chip in a “salary replacement” of around $40 per month, though workers will no longer be required to attend job skills training hosted by the labor ministry to receive the payout, Hun Sen said.
In early March, when production lines first stalled because of raw-material shortages from China, the government had assured unemployed workers that they would receive 60 percent of their minimum wage, or roughly $114, with 20 percent coming from federal coffers if they signed up for training.
Now with evaporating orders from Western brands and retailers who are scrambling to protect their increasingly fraught bottom lines, however, factory owners say they can no longer make those payments.
The Garment Manufacturers Association in Cambodia (GMAC), a trade group, has appealed to international buyers to uphold their corporate and social responsibilities and honor their purchasing contracts.
“We urge you to honor the terms of your purchasing contracts and fulfill your obligations by taking delivery and pay us for goods already produced and goods currently in production,” it wrote in an open letter last week. “This will allow us to continue to provide work to our 750,000 workers and provide us the ability to pay our workers and ensure the livelihoods of millions of Cambodians.”
The government also took the unprecedented move of canceling the upcoming Khmer New Year holiday, originally scheduled for April 14-16, as a precautionary measure to keep the COVID-19 virus from spreading through domestic travel and mass gatherings.
Hun Sen said the holiday would be given to workers at a “more suitable time.”
“If [we] allow them to go freely, the situation after Khmer New Year will be at higher risk,” he said at the same press conference. “Now people in the countryside are afraid of people from the city bringing the disease, as people in the city [are] worried about infection.”
He also noted that 100 factories have so far asked for work suspensions, leaving at least 60,000 workers in dire straits.
As of Tuesday evening, Cambodia had confirmed 115 positive cases of the novel coronavirus. Half of the patients have recovered and there have been no recorded deaths.
A pillar of the Cambodian economy, the garment industry is the country’s largest employer and contributes 40 percent of its gross domestic product. The nation exported $9.3 billion in clothing and footwear last year, according to the Ministry of Industry and Handicraft, a year-on-year increase of 11 percent.