"For such a rich country as Azerbaijan, the minimum wage is simply ridiculous"

The Ministry of Labor and Social Protection has been instructed to prepare and submit appropriate proposals by July 1 of this year to replace the monthly minimum wage with the hourly minimum wage.

What does it mean? How to calculate the hourly minimum wage?

The minimum wage in Azerbaijan is 345 manats. Will people be able to earn more if hourly pay is applied?

Lawyer Akram Hasanov answers questions from ASTNA on this topic.

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Question: The Ministry of Labor and Social Protection has been instructed to prepare and submit by July 1 of this year appropriate proposals to replace the monthly minimum wage with an hourly minimum wage. What does it mean?

Answer: So far,  the talk is only about the preparation of proposals. This is stated in paragraph 3 of the Roadmap for 2024 for the implementation of improvements and communications in the relevant area related to the "Workforce" indicator of the World Bank Group's "Business Ready" report. This map was approved by the Chairman of the Commission on the Business Environment and International Ratings, First Deputy Prime Minister Yagub Eyyubov on April 2, 2024. The task must be completed by July 1, 2024.

In other words, this is a process that is developing in a working order, this is a discussion stage. There is no clear government decision on the transition to this rule yet. It is just that our society has not yet got used to the generalization of government discussions. We present any information as if the decision has already been made. The fact that this issue has already been announced to the public in a transparent manner is a positive thing. From now on, we can all make suggestions. We are no longer subjected to ridicule when a question is submitted to the Milli Majlis as a bill, they say, what do you propose?! That is, when the job is already done.

In general, the problem is more technical in nature. That is, calculating the minimum wage on a monthly or hourly basis ultimately does not change anything. It is just that the monthly indicator will be divided into hours, and that is it. Currently, the monthly figure is 345 manats. There are 40 working hours per week. This is approximately 160-168 hours per month. The hourly rate is about two manats. As they say, what is on the forehead, what is on the forehead. In practice, in months when there are many working days (for example, May, July), the employee will earn more, and in months when there are few of them (for example, February, March), - less.

Question: How will this amount be calculated?

Answer: The state will set an hourly minimum wage, and the employer will not be able to set an hourly wage below this amount in the employment contract.  For example, as I said earlier, let us assume that this amount will be 2 manats (possibly higher). The employer will take this into account when determining the weekly 40-hour work schedule in the employment contract.

Question: For what purpose is this being introduced?

Answer: The goal is probably technical. That is, so that everyone receives a salary corresponding to the actual hours worked. A large one per month with a large number of working days or vice versa. In most Western countries, wages are also hourly. Probably, if this decision is made, the hourly wage calculation will also be prescribed in the employment contracts.

Question: Will people be able to receive a large salary in this case?

Answer: In a month in which there are more working days, yes. But not in a month with a small number of working days. For example, March is the shortest month due to the large number of holidays. Therefore, if an hourly wage is set, then in March the employee will earn less. But, for example, in July he will earn more. And the annual figure will be about the same as it is now.

Question: Won't this lead to abuse by employers, injustice between employees? That is, will the employer attribute more hours to an employee who wants to distinguish him from others? How will this issue be regulated?

Answer: This is unlikely. Because an employer can still write to an employee for fewer hours and give him a lower monthly salary. After all, the monthly salary of an employee in each specific case is paid according to the days (hours) actually worked.

Question: Won't this lead to black bookkeeping, to an increase in black salaries?

Answer: The answer is no. As I have already said, already now the monthly salary is paid in accordance with the actual working time. That is, the black bookkeeping will remain the same as it is now. Because of this, it will no longer be there.

Question: What are your suggestions?

Answer: It is not so important what the salary calculation will be - hourly, weekly or monthly. This is a technical problem. The main thing is that the minimum wage in Azerbaijan reflects the real need, is fair and complies with the international obligations of our country. Thus, Azerbaijan has joined the International Covenant on Economic, Social and Cultural Rights since 1992. In accordance with paragraph 7 of this document, everyone should have a fair salary that ensures satisfactory accommodation. Since 2004, we have joined the European Social Charter. According to paragraph 4 of this document, our state is obliged to recognize the right of employees to be paid to the extent that this ensures a decent standard of living for employees and their families. According to the conclusion of the European Committee on Social Rights, wages that ensure a decent standard of living for an employee and his family should be at least 60% of the average salary in the country. The average monthly salary currently stands at 985.3 manats. Thus, a decent salary, that is, the minimum wage, should be 591.18 manats. And we have only 345 manats. That is, about 58% of the required amount. That is the real problem. This needs to be addressed. For such a rich country as Azerbaijan, the minimum wage figure is simply ridiculous.