Guide to employment, payroll and benefits in

Azerbaijan

Rivermate offers complete payroll, benefits and compliance services for

Azerbaijan

01. Overview

Last updated: 

August 19, 2021

Currency
Azerbaijani Manat
Capital
Baku
Ease of doing business
76.7
Language
Azerbaijani
Population
10139177
GDP growth
0.10%

02. Grow your team in

Azerbaijan

with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in

Azerbaijan

, particularly if you don't have established local relationships. You can hire employees in

Azerbaijan

effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

Azerbaijan is a country in Eurasia's Caucasus region, officially known as the Republic of Azerbaijan. The Caspian Sea to the east, the Russian republic of Dagestan to the north, Georgia to the northwest, Armenia and Turkey to the west, and Iran to the south, it is located at the crossroads of Eastern Europe and Western Asia. In 1918, the Azerbaijan Democratic Republic declared independence from the Transcaucasian Democratic Federative Republic, becoming the first secular democratic Muslim-majority country in the world. As the Azerbaijan Soviet Socialist Republic, the country was integrated into the Soviet Union in 1920. On August 30, 1991, the modern Republic of Azerbaijan declared independence, shortly before the breakup of the Soviet Union the same year. The Armenian majority of the disputed Nagorno-Karabakh region seceded in September 1991 to form the Republic of Artsakh. With the end of the First Nagorno-Karabakh War in 1994, the region and seven neighboring districts, which were officially recognised as part of Azerbaijan pending a solution to the status of Nagorno-Karabakh through OSCE-facilitated negotiations, became de facto independent. The seven districts and parts of Nagorno-Karabakh were restored to Azerbaijani rule following the 2020 Nagorno-Karabakh war. Azerbaijan is a unitary semi-presidential republic. It is one of six separate Turkic states and a member of the TÜRKSOY group and the Turkic Council. Azerbaijan is a member of 38 international organisations, including the United Nations, the Council of Europe, the Non-Aligned Movement, the OSCE, and the NATO Partnership for Peace program. It has diplomatic relations with 182 countries. It is a founding member of the Gulf Cooperation Council, the Commonwealth of Independent States, and the Organisation for the Prohibition of Chemical Weapons. Azerbaijan is also a member of the World Trade Organization as an observer. Despite the fact that 97% of the population is Muslim, the country's constitution does not declare an official religion, and all major political parties are secularist. Azerbaijan is a developing nation with a Human Development Index ranking of 87th. It has a low unemployment rate and a high rate of economic growth and literacy. The ruling government, the New Azerbaijan Party, which has been in power since 1993, has been accused of authoritarian rule and a worsening of the country's human rights record, including increased restrictions on civil liberties, especially press freedom and political repression.

04. Public holidays

05. Types of leave

Paid time off

Employees above the age of 18 in Azerbaijan are entitled to a minimum of 21 days of paid leave. In addition, an employee is entitled to extra leave based on the number of years of employment:Employees who have been employed for five to ten years are entitled to two more days of leave. Employees who have been employed for ten to fifteen years are entitled to four more days of leave. Employees who have been employed for more than fifteen are entitled to six more days of leave. Annual leave can be divided into several leave cycles, but at least one of them must be two weeks long.

Public holidays

In Azerbaijan, there are fourteen public holidays.

Sick days

Employers are responsible for paying sick leave payments for the first 14 days of absence. Sick leave is compensated by the State Social Protection Fund after 14 days. Employees must be able to provide a medical card to claim this privilege, which can be extended in 3-6 day intervals.

Maternity leave

Women are entitled to a total of 126 days of maternity leave, which can begin as early as 70 days before the due date. Maternity leave will be extended for an extra 14 days if the mother had a traumatic delivery or had more than one child. The State Social Protection Fund pays for maternity leave.Compensation is equal to 100 percent of the previous year's gross monthly wage.

Paternity leave

Fathers are enttitled to fourteen days of unpaid paternity leave following the birth of their child.

Parental leave

In Azerbaijan, there are different rules for different parental rights:A mother who is pregnant or who has a child under the age of three cannot be terminated.A pregnant woman or a mother with an infant under the age of 18 months is entitled to a workweek reduction. The highest number of hours that can be worked in a day is 36.Night shifts are not permitted for pregnant women or mothers of children under the age of three.A woman who has two children under the age of 16 is entitled to two additional pay days, and a woman who has three or more children under the age of 16 is entitled to five additional paid days.A single mother or parent with children under the age of 16 has the right to 14 days of unpaid leave.

Other leave

06. Employment termination

Termination process

In general, termination of an employment contract is strictly regulated in Azerbaijan and must be handled with extreme caution. Labor rules governing termination are stacked in favor of the employee, and any error by the employer can have severe consequences.


Severance compensation of three months is needed for employees who are laid off due to redundancy.

Notice period

When terminating an employment agreement due to downsizing, two months' notice is necessary. During this two-month period, the employee is authorized to take one day of paid time off per week to seek new employment. Employees with less than a year of service will be given a two-week notice period. A four-week notice period is necessary for employees with one to five years of service. For employees who have worked for the company for five to ten years, a six-week notice period will be provided. A nine-week notice period is granted to employees with more than ten years of service. If an employee initiates the employment agreement's termination, the employee must offer one month's written notice.

Severance pay

Severance pay is determined by the length of the employee's employment. If the employee has worked for the company for less than a year, the severance pay is equal to one month's salary. If the employee has worked for the company for between one and five years, the severance pay is 1.4 times the monthly salary. If the employee has worked for the company for five to ten years, the severance pay is equal to 1.7 times the monthly salary. If the employee has worked for the company for more than ten years, the severance pay is equal to two times the monthly salary. In addition to severance pay, the employer must pay an additional two months' salary if the employee's employment terms change, the employee is called to military service, or the employee is unable to perform their duties due to a permanent disability. If an employee's employment is terminated due to death, their family members receive a three-month allowance.

Probation period

Probation can last up to three months. During this time period, either the employee or the employer may terminate the employment agreement with three days' notice.

07. Working hours

General

The usual workweek is 40 hours, spread out over five days, with an eight-hour day. It is possible to create a workweek with six working days in specific conditions. A six-day workweek can be structured into either a 40-hour workweek with no more than seven working hours per day, or a 36-hour workweek with no more than six working hours per day.


Employees under the age of 16 work for a maximum of 24 hours per week, while employees aged 16 to 18 work for a maximum of 36 hours per week. Workers with specific disabilities, pregnant women, mothers with children under the age of 18 months, and single parents with children under the age of three are also all subject to the 36-hour limit. Pregnant women, women with children under the age of three, and adults under the age of 18 should avoid working between the hours of 10 p.m. and 6 a.m.

Overtime

Only in exceptional cases is overtime permitted, and it is usually limited to two hours for employees in dangerous jobs and a maximum of four hours over two working days for all others. Overtime and holiday work are paid at 200 percent of the regular wage, whereas labor scheduled at night may be paid more. Overtime hours cannot be replaced with additional time off.

08. Minimum wage

General

There is a minimum wage in Azerbaijan. Employers may pay performance bonuses at their discretion.


At the moment, the monthly minimum wage is 250 AZN (147.06 USD).

09. Employee benefits

General

Azerbaijan has a functioning national health insurance system. Employers will sometimes offer private health insurance. Azerbaijan, on the other hand, is presently revamping its obligatory health insurance system.

Employers in Azerbaijan often provide private medical insurance to complement the little free care available.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in

Azerbaijan

to hire a team takes time, money, and effort. The labor law in

Azerbaijan

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

Azerbaijan

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

Azerbaijan

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

Azerbaijan

via our Employer of Record / PEO solution.

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