An hourly wage system will be implemented in Azerbaijan.
According to elchi, this is reflected in the proposed amendment to the Labor Code.
According to the draft, hourly wages will be determined in one of the following cases:
– when an employment contract is concluded for a period of less than one month in enterprises operating in economic activities approved by the relevant executive authority body (organization) and in workplaces created by individual employers:
– when the duration of the weekly working time is set at 20 hours or less.
Hourly wages will be allowed in state-funded enterprises if provided for in the established labor payment system. The wages of employees working part-time and receiving monthly wages cannot be lower than the amount calculated from the minimum monthly wage in proportion to the established time.
The wage per hour of work for an employee whose hourly wage is determined and who has performed their labor function cannot be lower than the minimum hourly wage. If the duration of the daily working time of an employee whose wage is determined hourly is less than 1 hour, the wage paid to the employee cannot be lower than the minimum hourly wage. If the duration of the employee’s next working hour is less than 1 hour, that period should also be considered as 1 hour and paid.
The amount of the minimum hourly wage must be set at a higher amount than the hourly tariff (position) salary calculated from the minimum monthly wage.
Employees whose hourly wages are determined must be paid their wages at the time specified in the employment contract.
It is noted that the minimum wage, which aims to ensure the minimum living standard for employees, is one of the tools of social policy worldwide today. The regulation of the minimum wage is one of the issues addressed and kept in focus by many international organizations, especially the International Labor Organization.
The hourly minimum wage ensures equal treatment in the payment of labor for employees working in full-time and part-time regimes. The hourly minimum wage is particularly important for certain categories of employees engaged in work on short-term contracts or working part-time. According to the current legislation of the Republic of Azerbaijan, the minimum wage applied in our country covers a monthly period, and in some cases, employees are paid wages below the minimum.
Namely, in the existing labor legislation, employees’ labor is paid through time-based, piece-rate, and other payment systems, and different rules for wage payment are provided in various cases (for example, payment for labor when performing labor functions for various jobs, payment for labor when replacing professions, payment for labor when production norms are not met, the procedure for payment of labor during part-time work, etc.).
Setting an hourly minimum wage for certain categories of employees ensures a more flexible approach to the minimum wage, equal treatment among employees, the establishment of a wage calculation mechanism by employers, and the prevention of abuse, allowing employees to be paid for the hours they actually work, as opposed to the standard working week.
In this regard, new norms related to the minimum hourly wage have been included in the Labor Code of the Republic of Azerbaijan to improve labor relations, increase the flexibility of the wage system, and strengthen minimum wage guarantees for employees.
According to the amendments, along with the monthly wage, the concept of hourly wage has also been established in the legislation. This envisages the regulation of the labor of employees working in certain economic activity sectors on the basis of an hourly payment system and ensuring that the wage paid for each hour worked is not lower than the minimum hourly wage amount determined for the country.
At the same time, it is established that the wages of employees working part-time and receiving monthly wages, in accordance with the procedure provided for in the Code, cannot be lower than the amount calculated from the minimum monthly wage in proportion to the established time.
The list of economic activity types for which the hourly wage system is applied is determined by the Cabinet of Ministers of the Republic of Azerbaijan. The inclusion of agricultural production and public catering sectors in the list is envisaged.
According to the relevant regulations, the hourly wage system is envisaged to be applied in enterprises operating in the mentioned sectors and in workplaces created by individual employers when the employment contract is concluded for a period of less than one month, or when the weekly working time is set at 20 hours or less, regardless of the type of economic activity.
The new approach particularly allows for the calculation of wages for individuals working under short-term employment contracts and in part-time regimes in accordance with the actual hours worked. At the same time, the establishment of a minimum payment guarantee for each hour worked serves to protect employees’ rights and increase transparency in labor relations. The implementation of the minimum hourly wage system will contribute to the formation of a more flexible mechanism for determining wages, increase the transparency of labor relations, and apply advanced international practices.
The adoption of the draft will not create an additional financial burden on the state budget.