Despite the landlocked borders hindering its trading capacity, Armenia has established itself as an emerging regional financial center by leveraging its high availability of labor and technology. For sustained economic growth, the government guards its workers’ rights very strictly. Local, as well as foreign entrepreneurs who wish to avail the business opportunities in the country, must ensure that they fully understand and adhere to the labor law in Armenia.
Labor Code of Armenia
The Labor Code of the Republic of Armenia was adopted in 2004 and defines the current labor legislative framework in the country. It is divided into three parts, 24 chapters and 266 articles addressing various aspects of labor relationships at both the collective and individual levels. Some of the main aspects are discussed below.
Articles 91 to 93 stipulate that the probation period must not exceed three months. During this time, all provisions of the labor code apply to both concerned parties as per usual. The employer and employee each reserve the right to end the contract with a three-day written notice. Workers on a fixed or permanent job may terminate their contract of employment by mutual agreement given that a prior notice is submitted at least a week before.
On January 1, 2020, the minimum monthly wage in Armenia was set at AMD 68,000, following a 23.6% increase from the previous year.
An addendum to the labor code restricts employers with 10 or more workers from paying their salaries in cash. They need to use digital mode of payments or any other non-cash alternative, such as checks. However, if an employee wishes to be paid for their services in cash, they can apply in writing and the employer must process the salary accordingly.
Article 139 stipulates the normal working time to be no more than 40 hours a week (or 8 hours a day). The maximum hours of work, including overtime, should not exceed 12 hours a day and 48 hours a week. This includes rest and lunch breaks. These durations may be reduced in certain circumstances, or for specific individuals, such as young and night workers. The details for reduced work time are set forth in Article 140 of the labor code. Any work performed between 10pm and 6am is considered night work in Armenia.
The supplementary payment for overtime work must not be less than one and a half times the employee’s normal hourly pay. Moreover, overtime work should not exceed 120 hours for the whole year. Any employer forcing employees to work for more than 4 hours overtime for two consecutive days can face legal action. By law, all employers need to maintain a precise record of overtime in working time logs.
Armenia is an attractive country among foreign investors and business persons due to its low-cost and high-quality workforce. To learn more about the labor law in Armenia and how to effectively manage an international workforce, talk to us today.