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Armenia, officially known as the Republic of Armenia, is a country in West Asia. Its economy showcases an array of industries, including chemicals, textiles, processed food, and machinery. With the GDP reaching 19.51 billion USD as of 2022, Armenia offers many lucrative opportunities for a growing business.
The Labor Code establishes the employment laws in Armenia and outlines the best hiring practices. Therefore, hiring employees in Armenia requires a thorough knowledge of its local laws.
From recruitment to payroll processing, everything must be in line with Armenian laws. You must also be aware of the cultural intricacies in the country, which can otherwise hinder your business growth.
So, here’s a comprehensive guide on the employment laws in Armenia and how an Employer-of-Record (EOR) can be your hiring partner in the country.
Contractual Agreements
Part 3 of the Labor Code of the Republic of Armenia deals with employment contracts under Chapter 12.
In Armenia, you must sign an employment contract with your employee, and its contents would include essential details, such as the following:
- The place and time of work
- Designation of the employee
- Work expectations
- Rights and obligations of both employer and employee
- Contract validity
- Work conditions
- Duration of the probation period
Additionally, you may sign a Data Processing Agreement (DPA) to comply with data privacy standards such as the GDPR.
Types of employment contracts in Armenia
Before you hire in Armenia, you must know about the two main types of employment contracts valid in the country:
- Employment contracts for a definite time, where contract validity is mentioned.
- Employment contracts for an indefinite time, where contract validity is not stated.
In Armenia, employment contracts for a definite time are issued to seasonal employees, employees offering personal services to their employer, in-house employees, etc.
These contracts can be modified under special circumstances.
Obligations and rights for both parties
Contract employment law in Armenia lays down the following obligations:
- As an employer, it is essential to comply with local laws.
- You must also ensure a healthy work environment.
- You are legally bound to offer an employment contract.
- You must provide the sanctioned benefits and bonuses to your employees.
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Talk to an expertWorking Hours and Overtime
Chapter 17 of the Armenian Labor Code, from articles 137 to 149, deals with regular working hours in the country.
Regular working hours
- Employees in Armenia can work at most 40 hours a week.
- Employers can schedule work for a maximum of 8 hours per day.
- If an employee has two or more contracts with any organization, then their working hours are a maximum of 12 per day, including their rest hours and lunch breaks.
- Shorter work times are defined for specific employees. Here are its details:
Overtime regulations and compensation
Article 145 of the Labor Code outlines the rules for overtime and compensation. According to it:
- Overtime work should not exceed 48 hours per week and 12 hours per day, including rest and lunch breaks.
- The calculation of overtime compensation is based on an employee's basic wage.
- Furthermore, any employee working on a rest day or a holiday is entitled to twice the remuneration rate as compensation.
Minimum Wage and Compensation
The labor law in Armenia specifies a minimum wage payable in Dram. Article 179 of LC covers all the details regarding the country's hourly, monthly, or minimum pay.
The minimum wage rate in 2024
- According to the labor law in Armenia, the minimum monthly remuneration per month is AMD 75,000.00 (effective January 1, 2023).
- If an employee gets supplementary pay, bonus, etc., those are not considered in the minimum pay.
Factors affecting wage determination
A few key factors affecting wages in Armenia are:
- Education
- Professional experience
- Type of profession
- Standard of living in the country
- Industry or sector of work
Employee Benefits and Social Security
Statutory benefits
Employment laws in Armenia offer several statutory benefits to their employees. Here are the details:
Old age pensions
- Armenian law mandates that any entrepreneur, public sector employee, or notary contribute towards a pension fund.
- The pension contribution is 10% of an employee’s basic income.
- Armenia also offers ‘Voluntary Funded Pension Schemes,’ which are available to employees in two forms: a fixed lump-sum amount or a withdrawal program.
Disability pensions
- An employee is eligible for disability pensions, the coverage of which varies with the age when disability began.
- The pension coverage range varies between 100% to 140% of the basic pension amount (16,000 Drams a month).
- A reciprocal agreement signed by the government ensures disability pension payments abroad.
Survivor pensions
- A person is eligible for their spouse’s pension.
- The coverage is 100% of the basic pension amount plus an additional 50% of the bonus pension (500 Drams per month).
Additional perks and benefits
Labor laws of Armenia offer the following additional perks and benefits to employees:
- Mandatory rest days
- Public holidays
- Memory days
- Annual leaves
- Leave encashments
- Overtime compensations
- Maternity leaves
- Educational leaves
Social security contributions and requirements
Vacations and Paid Time Off
You have to provide the following holidays, paid and unpaid leaves to your employees according to the Labor laws of Armenia:
Annual leave entitlement
- Articles 158 to 170 of LC deal with annual leaves.
- Employees in Armenia get a minimum of 28 annual leaves.
- There are 35 annual leaves for specific employees involved in intellectually or emotionally strenuous work.
- Annual leaves can be given partially. The duration, in this case, should be at least 14 days.
Public holidays and special leaves
Armenia has the following public holidays:
- New Year (December 31 to January 2)
- Christmas
- Women’s Day
- Labor Day
- Commemoration Day of Genocide Victims
- Day of the Constitution
- Day of the Army
- Day of Victory and Peace
- Holiday of Republic
- Day of Independence
Other than the annual leaves and public holidays, an employee also gets the following special leaves:
Termination and Severance
Chapter 15 of LC deals with termination and severance pay of employees. To ensure compliance, you must know the following termination details:
Grounds for termination
Notice period and severance pay
- The notice period varies with the grounds of termination.
- It usually ranges between 1-2 weeks.
- Article 129 of LC deals with severance pay.
- Armenia labor law states severance pay is worth an employee’s 2-week wage.
Discrimination and Equal Opportunity
The labor laws of Armenia protect employees against discrimination and ensure equal opportunities. Article 3 of LC mandates guidelines regarding discrimination, and here are its details:
Prohibitions against workplace discrimination
- Freedom of employment
- Equality in work opportunities
- No forced or compulsory work
- Ensuring healthy work conditions
- Provision of equal pay for work
- Ensuring timely pay of the employees.
Health and Safety Regulations
Chapter 23 of LC (Articles 242 to 262) deals with regulating health and safety measures in the workplace. Employment laws in Armenia state that:
- Every employee in the country has the right to workplace safety.
- Employers must ensure a safe and healthy work environment with a secure workstation.
- Employers undertake regular medical examinations of their employees under 18 years of age.
- Employers must implement safety measures in workplaces dealing with hazardous substances.
- Employees are given proper sanitary and hygienic premises.
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If so, it's essential to know the local regulations to launch your business quickly and efficiently.
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FAQs
Q1: How many hours can I work in Armenia?
Armenia labor law states a maximum of 8 hours of work per day or 40 hours per week. Even overtime should be limited to 12 hours a day.
Q2: What are the labor laws in Armenia?
Labor laws in Armenia are governed by the Labor Code, which emphasizes healthy work conditions, provision of employment contracts, and extending benefits to employees.
Q3: What are the working conditions in Armenia?
The working conditions in Armenia are highly favorable for expanding business. The LC ensures a healthy employee-employer relationship and governs the country's work regulations. The LC also mandates a healthy work environment for the employees.
Q4: How much is severance pay in Armenia?
For an employee in Armenia, severance pay equals an employee’s 2-week wage.
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