Azerbaijan: An Overview of Labor Law and Employment Policies

Overview of Employment Law

• Key Legislation:
  • Labor Code
  • Social Security Law
  • Tax Code
• Legal Characteristics:
  • Aims to protect employee rights and promote a fair employment environment.
  • Regulates matters such as minimum wage, working hours, paid leave, and severance pay.

Employment Contract Requirements

• Contract Types:
  • Fixed-term contracts (maximum 5 years)
  • Indefinite-term contracts
• Contractual Provisions:
  • Must include job description, remuneration, working hours, probation period (maximum 3 months), etc.
• Language and Currency:
  • Azerbaijani language is strongly recommended.
  • Currency is Azerbaijani Manat (AZN).

Working Time Regulations

• Standard Working Hours: 40 hours per week, 8 hours per day.
• Rest Days and Breaks: Minimum of 24 hours rest per week, minimum of 1 hour break per day.

Leave Policies

• Annual Leave: Minimum of 21 days, with additional days for increased years of service.
• Public Holidays: 15 official public holidays.
• Special Leaves:
  • Sick Leave: 14 days paid sick leave, from the 15th day paid by the Social Insurance Fund.
  • Maternity Leave: 126 days paid maternity leave, 70 days before birth, 56 days after birth.
  • Paternity Leave: 14 days unpaid paternity leave.

Employee Dismissal and Contract Termination

• Notice Period:
  • Employer: 1 month
  • Employee: 1 month
• Severance Pay:
  • Dismissal due to redundancy: Minimum of 3 months' salary.
  • Dismissal for other reasons: Up to 2 months' salary, depending on years of service.
• Protection against Unfair Dismissal:
  • Employer must prove fair reason for dismissal.
  • Protected groups, such as pregnant women and parents of children under three, cannot be dismissed.

Tax Laws

• Personal Income Tax:

  • Salary Range (AZN)	Tax Rate
    0 - 8,000	0%
    8,000+	14%

• Social Insurance Contributions:

  • Employer: 22%
  • Employee: 3%

Health Insurance

• Insurance Policy:
  • State health insurance scheme.
• Coverage:
  • Basic healthcare services.

Compensation and Benefits

• Minimum Wage: 300 AZN/month
• Salary Structure:
  • Base salary
  • Bonuses
  • Allowances

Work Permits and Visas

• Permit Requirement:
  • Foreign employees require a work permit.
• Application Process:
  • Applied for by the employer through the State Migration Service.

Confidentiality and Non-Compete Clauses

• Enforceability:
  • Enforceable, but must be reasonable and not unduly restrict employee's employment opportunities.
• Common Provisions:
  • Confidentiality of information
  • Non-competition restrictions

Training and Development

• Legal Requirements:
  • Safety training
  • Skills development training
• Government Support:
  • Government-funded training programs.

Workplace Diversity and Inclusion

• Legal Requirements:
  • Prohibits discrimination based on factors such as gender, race, religion.
• Enforcement Measures:
  • Employers must have anti-discrimination policies in place.

Remote Work Policies

• Legal Framework:
  • Remote work is permitted, but must be clearly outlined in the employment contract.
• Tax and Insurance Implications:
  • Tax and social insurance implications of remote work depend on specific circumstances.

Authoritative Website Addresses

• Ministry of Labor and Social Protection of Azerbaijan: https://lsms.gov.az/