Employer of Record in Azerbaijan

Brain Source International helps you save time and reduce costs by allowing you to hire in Azerbaijan without establishing an entity. Our Employer of Record (EOR) solution handles onboarding, payroll, immigration, and benefits so you can hire your employees faster and grow your business compliantly.

What is an Employer of Record in Azerbaijan?

An Employer of Record (EOR) in Azerbaijan is a strategic partner that acts as the legal employer for your employees residing in Azerbaijan. The EOR takes on all employment responsibilities and liabilities on your behalf, handling payroll, benefits, taxes, and regulatory compliance.

By partnering with an EOR, you can hire employees in Azerbaijan without the need to establish a local entity or navigate complex labor laws.

Employer of Record (EOR) in Azerbaijan: Key Aspects of the Azerbaijani Labour Code

General Information

• Currency: Azerbaijani Manat (AZN)
• Employer Taxes: 22.00%
• Payroll Frequency: Bi-Monthly / Monthly
• Employee Costs: 5.5%
• Capital: Baku
• Fiscal Year: 1 January – 31 December

Minimum Wage

General: The monthly minimum wage is 345AZN.

Payroll

Payroll Cycle: According to the Labor Code of Azerbaijan (LCA), monthly salaries must be split into two portions—an advance and the remaining balance—and paid to employees twice a month, with the intervals between payments not exceeding 16 days. Additionally, annual salaries are required to be paid at least once a month, a practice that is increasingly becoming the norm.

13th Salary

There is no requirement for the 13th salary payment in Azerbaijan.

Taxation

Would you like to know the approximate cost of employment in Azerbaijan?

Working Hours

General: Standard working hours for employees over the age of 18 in Azerbaijan are limited to a maximum of 8 hours per day and 40 hours per week, typically spread across five working days with two days off. According to the Azerbaijan Resolution, the working days for 2022 are set at 241 days. The annual total for working hours in 2022 is 1,921 hours for a 40-hour workweek, applicable to both five-day and six-day workweeks.

In certain industries, employers may implement a six-day workweek. In such cases, daily working hours are capped at 7 hours for a 40-hour workweek, 6 hours for a 36-hour workweek, and 4 hours for a 24-hour workweek.

Overtime: Overtime refers to any work performed beyond an employee’s contracted standard working hours. Employees should not be required to work overtime for more than two consecutive days, with a maximum of four additional hours per day. In workplaces with difficult or harmful working conditions, overtime should not exceed 2 hours.

Overtime pay is generally calculated as follows:

• If the salary is based on time worked, each overtime hour should be compensated at 200% of the regular hourly rate.
• If the salary is based on piecework, overtime must be paid at a rate no less than the regular hourly wage of employees in the same pay scale.

Different methods for calculating overtime pay may be outlined in employment contracts or collective agreements. It is important to note that overtime hours cannot be compensated with time off or additional leave days.

Leave

Annual Leave (Vacation):

In Azerbaijan, the minimum annual leave entitlement for employees over the age of 18 is 21 days. This entitlement increases with the number of years an employee has worked for the same company, as follows:

• 5–10 years of service: an additional 2 days of leave per year
• 10–15 years of service: an additional 4 days of leave per year
• 15 or more years of service: an additional 6 days of leave per year

Annual leave can be divided into multiple periods, but one of these periods must be at least two weeks long. If a weekly day off or a non-working day coincides with a holiday, that day off is transferred to the next working day. Additionally, if the holidays of Eid al-Adha (Gurban) or Ramadan fall on a non-working day, the following working day is observed as a day off.

Public Holidays

Azerbaijan observes 24 public holidays. According to the resolution, the following days will be considered rest days due to holidays coinciding with weekends:

For a five-day workweek: January 3 and 4, March 25, May 30, June 27, and July 11 and 12.

For a six-day workweek: January 3, March 25, June 27, and July 11.

Sick Days

Employees who are unable to work due to illness will receive their full salary from the employer for the first 14 days. After this period, payments will be covered by the State Social Protection Fund. To receive sick pay benefits, the employee must submit a medical certificate.

Maternity Leave

Women are entitled to a total of 126 days of maternity leave in Azerbaijan, with 70 days to be taken before the expected due date and 56 days after the birth. If the birth is difficult or involves multiple births, the leave can be extended by an additional 14 days.

Maternity pay is calculated at 100% of the mother’s average salary over the previous 12 months and is paid by the State Social Protection Fund.

Pregnant women and women with young children are afforded special protections under employment law, including:

• A pregnant woman or a woman with a child under 3 years old cannot be terminated.
• A pregnant woman or a woman with a child under 18 months old is entitled to a reduced workweek, with a maximum of 36 hours per week.
• A pregnant woman or a woman with a child under 3 years old cannot be required to work night shifts.

Paternity Leave

Fathers can take 14 days of unpaid paternity leave following the birth of a child.

Parental Leave

In Azerbaijan, there are various stipulations for parental rights, inclusive of additional time off should it be required; the main clauses are:

• A woman with two children under the age of 16 is entitled to 2 additional days of paid leave; a woman with 3 or more children under the age of 16 is entitled to 5 days of additional paid leave.
• A woman or single father with children under the age of 16 is entitled to 14 days of unpaid leave per year.
• Female employees adopting children under 2 months of age are entitled to 56 calendar days of social leave.

Other Leave

In Azerbaijan, employees who are also pursuing education are entitled to study leave to attend training sessions, take state exams, prepare diploma projects, and more during the relevant academic season. During this paid educational leave, employees receive their average salary. The number of days granted for study leave varies based on the nature of the work and specific leave requirements.

Additionally, employees who donate blood are granted an extra day of leave with full pay, which is typically added to their annual leave entitlement.