Azerbaijan may introduce new rules for wages and pensions in 2027

A new approach to raising the minimum wage in Azerbaijan is expected to take effect next year. Under amendments to the Labor Code, the minimum wage must be reviewed at least once a year.

“Operative Information Center-OMM” reports that the approach is expected to be applied for the first time in 2027. The new mechanism would allow the minimum wage to be reviewed regularly and could become one of the main elements of a new social package.

Could affect more than 700,000 citizens

Social spending in the 2027 state budget is also expected to increase.

According to preliminary official figures, about 44 percent of next year’s state budget expenditure is expected to go toward social priorities, amounting to approximately 18 billion manats.

Experts say higher social spending could expand the funding available for increases in wages and other social payments.

An increase in the minimum wage is expected to affect more than 700,000 citizens.

Pensions could also be indexed under new rules

All types of labor pensions are also expected to be indexed and increased from January next year.

The change could cover approximately 1.1 million citizens.

Proposed legislative amendments envisage a differentiated approach to pension indexation.

Pensions are currently indexed in line with the growth rate of the average monthly wage in the previous year. Under the new approach, indexation would be calculated individually, taking the size of each person’s pension capital into account.

Under this system, pension increases could be calculated differently for people with larger pension capital.

Could also affect private-sector wages

An increase in the minimum wage could affect not only people earning that amount but also other workers through its impact on wage structures.

Raising the minimum wage could make wage increases necessary for certain positions in the public sector and could influence pay levels in the private sector.

However, the specific amount of any minimum-wage increase has not yet been announced. The final figure is expected to be determined during discussions on the 2027 state budget.