Azerbaijan plans to introduce an hourly wage system.
“Operative Information Center-OMM” reports that the proposal is included in a draft law on amendments to the Labor Code.
Under the draft, an hourly wage scale would apply to workplaces in enterprises operating in economic activity sectors approved by the relevant executive authority, and to workplaces created by employers who are individuals, when employment contracts are concluded for less than one month or when the weekly working time is set at 20 hours or fewer.
Hourly wages would be permitted at budget-funded institutions if provided for under their established remuneration systems. The wages of part-time employees paid monthly may not be lower than the amount calculated on a pro rata basis from the statutory minimum monthly wage.
An employee whose wage is set hourly and who performs their work duties may not receive less than the minimum hourly wage for each hour worked. If such an employee’s daily working time is less than one hour, the amount paid may not be lower than the minimum hourly wage. If an employee’s next working period is shorter than one hour, it must also be counted and paid as one hour.
The minimum hourly wage must be set above the hourly tariff (position) rate calculated from the minimum monthly wage.
The draft law also proposes that wages and other payments to employees be transferred through an electronic payment system to a bank account selected by the employee. The measure is intended to ensure compliance with labor legislation, monitor the timely payment of wages in the amounts prescribed by law, and prevent informal employment.
As a result, remuneration would be fully digitized, reducing employers’ workload in recording, calculating and paying wages. In the future, employers would no longer need to submit tax returns to tax authorities covering personal income tax, social insurance contributions, unemployment insurance contributions and compulsory medical insurance contributions related to remuneration; quarterly returns would be replaced by monthly information. State oversight of legally compliant wage payments would be strengthened, with an electronic, proactive monitoring mechanism established.
Measures to combat informal employment would also be strengthened. Mandatory state social insurance contributions paid into the insurance and pension system would be automatically credited to individual accounts. Average monthly wages would be calculated automatically in cases such as business trips, leave and loss of working capacity, while citizens would gain broader access to their own income histories.
The amendments would also prohibit replacing the minimum duration of annual leave with compensation.
Except for the case specified in Article 144, Part 2 of the Labor Code, which provides for compensation upon termination, the draft proposes prohibiting compensation in place of the minimum annual leave period set out in Article 114, Part 2 of the Code — 21 calendar days. It also clarifies the concept of transferring annual leave, or part of it, to another period and sets out the circumstances for such transfers in greater detail.
