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Hiring from Azerbaijan can help your business reach the next level. However, there are a few things to consider before hiring from the country bounded by the Caspian Sea and the Caucasus Mountains. Employers must strictly follow the labour legislation of Azerbaijan, taking into account work standards, annual leave, minimum salary, work hours, compensation and termination conditions, which are regulated by the Employment Code of Azerbaijan.
With the rise of remote work, employers must ensure their employment contracts comply with Azerbaijani legislation. The easiest and fastest way to hire an employee from Azerbaijan without opening a separate entity is through an Employer of Record provider like Native Teams.
Azerbaijan offers several advantages for finding remote employees. Firstly, Azerbaijan has a growing pool of skilled professionals across various sectors, including technology, engineering, and customer service. The country’s youthful, dynamic population is also increasingly engaged in remote work, bringing fresh perspectives and energy to the workforce. Beyond a young, adaptable workforce, many Azerbaijanis are proficient in English and other languages, facilitating effective communication with international teams and clients.
Finally, Azerbaijan’s time zone benefits businesses operating in the Eurasian region, allowing for convenient collaboration and real-time communication with clients and teams across neighbouring regions.
For a streamlined hiring process in Azerbaijan, Native Teams provides support through our direct Employer of Record services. Our team of skilled tax and legal professionals acts as your trusted partner throughout the hiring process in Azerbaijan, ensuring adherence to local payroll requirements, tax obligations, and other compliance considerations.
Hire your first Azerbaijani employee with Native Teams.
Employers must follow a few essential laws and regulations to ensure a fully compliant employment process in Azerbaijan.
The right to work is a fundamental right in Azerbaijan, guaranteed to citizens under Article 35 of the Constitution.
Azerbaijani employment law regulates the relationship between employers and employees and establishes protections relating to fair treatment, wages, working hours, and workplace health and safety.
Employers are required to provide a safe and healthy working environment, including compliance with applicable safety standards and the provision of necessary protective equipment.
Employment law also establishes principles of equality and non-discrimination. Employment-related decisions should be based on merit and qualifications, with employees protected against discrimination based on characteristics such as gender, race, ethnicity, and religion.
Employment contracts in Azerbaijan may be concluded for an indefinite period or a fixed term, depending on the nature and circumstances of the employment.
Indefinite employment contract
An indefinite contract establishes an ongoing employment relationship with no specified end date. If the employment contract does not state its duration, it is considered indefinite.
Fixed-term employment contract
A fixed-term contract may be concluded for a period of up to five years. It may be used in specific circumstances, including seasonal or temporary work, construction and installation projects, training and professional development, skills assessment, and certain personal, family, or educational situations.
Part-time employment
Employers and employees may agree on shorter working hours, working days, or working weeks. The specific part-time arrangement is determined by mutual agreement, and part-time employees retain the employment rights provided by the Labour Code and their employment contract.
Employment contracts in Azerbaijan must clearly define the terms and conditions of the employment relationship. Employee rights and guarantees cannot be diminished when the contract is concluded or terminated, and its terms generally cannot be changed unilaterally unless the contract provides otherwise.
An employment contract should include:
Download a free employment contract for Azerbaijan through Native Teams.
Employment contracts in Azerbaijan must be concluded in writing in accordance with the Labour Code and become effective once signed by both parties.
If an employee begins working without a written employment contract, the agreement must be formalised within three days to comply with legal requirements.
Written contracts may also be concluded through various forms of communication, including electronic document exchange. For electronic contracts, it is important that the authenticity of signatures and the origin of the document can be verified, as these factors may affect the validity and enforceability of the agreement.
The standard working time in Azerbaijan is limited to eight hours per day and 40 hours per week.
Employees generally work a five-day week with two days off. Depending on the nature of the work and employment conditions, employers may establish a six-day working week with one day off.
For a six-day working week, maximum daily hours are:
Employers and employees may agree on part-time working arrangements, including shorter working days or weeks. The specific working hours and duration of the arrangement are determined by mutual agreement. Part-time employees retain the employment rights provided under the Labour Code and their employment contract.
Employers are responsible for accurately recording employees’ working hours, including regular working time and overtime.
In Azerbaijan, night work is defined as work performed between 10:00 PM and 6:00 AM.
For employees working in severe or hazardous conditions, or performing certain specialised tasks, the night shift may be reduced by one hour if at least half of the working day falls within the night period.
Where working time is calculated over a reporting period, total working hours may be distributed, provided that the standard working time for the applicable period is not exceeded. The reporting period may extend up to one year, while an individual working day or shift may not exceed 12 hours.
Employees in Azerbaijan are entitled to rest and meal breaks during the working day. The timing and duration of these breaks should be established in internal workplace policies, shift schedules, or employment contracts.
Employees must receive at least 12 hours of rest between working shifts. For employees working rotating shifts, rest periods are determined according to the applicable shift schedule.
Employees are also entitled to weekly rest periods:
The continuous weekly rest period must be at least 42 hours.
Employees in Azerbaijan are entitled to at least 21 calendar days of paid annual leave per year, with eligibility beginning after six months of continuous employment. Collective agreements, labour legislation, or individual employment contracts may provide a longer annual leave entitlement.
Employees are entitled to additional leave based on their length of service:
Annual leave may be taken consecutively or in separate periods, subject to the applicable conditions.
When employment ends, employees are entitled to compensation for any accrued but unused annual leave, calculated according to the number of unused leave days.
Employees cannot waive their right to annual leave in exchange for monetary compensation during employment, and any such agreement is considered invalid.
Employees in Azerbaijan are entitled to receive at least the state-established minimum wage, provided they fulfil their duties and meet the applicable work requirements during the monthly period.
Collective agreements and employment contracts may establish higher salary levels. Additional payments, such as bonuses, compensation supplements, wage increases, and overtime pay, are not included when calculating the minimum wage.
An employee’s salary must not be lower than the amount specified in their employment contract or applicable collective agreement.
Pay may also be determined according to an employee’s qualifications, expertise, and performance. Employees who consistently exceed required work standards or successfully complete relevant professional examinations may request a higher qualification grade.
Where an employee significantly fails to meet applicable production or equipment standards, their qualification grade may be reduced. It may subsequently be restored following improved performance, in accordance with applicable procedures.
To calculate the salary and taxes in Azerbaijan, click here.
Employees in Azerbaijan are entitled to sick leave in cases of temporary incapacity for work.
The start and duration of sick leave are determined by the employee’s designated primary healthcare physician. The employee’s temporary incapacity must be confirmed by a medical report issued by the physician.
During sick leave, employees are entitled to salary compensation. The compensation is calculated based on the employee’s average salary over the 12 months preceding the month in which the illness occurred, regardless of which entity is responsible for making the payment.
Parental or family leave allows employees to take time away from work to care for a child or dependent family member.
Parental leave may be paid or unpaid, depending on the applicable arrangement. Unpaid parental leave provides job protection while the employee is absent, while paid parental leave allows employees to receive compensation while caring for a child or dependent.
Parental leave may include or complement other forms of family-related leave, such as maternity, paternity, and adoption leave.
Female employees in Azerbaijan are entitled to 126 calendar days of paid maternity leave, consisting of:
In cases of complicated childbirth or multiple births, the post-childbirth leave period is extended to 70 calendar days.
Fathers are entitled to 14 calendar days of unpaid paternity leave following the birth of their child.
Employment contracts in Azerbaijan may only be terminated on grounds established under the Labour Code, which provides protections against arbitrary dismissal.
The main grounds for termination include:
Employers in Azerbaijan may terminate an employment contract only on valid grounds established under the Labour Code.
Grounds for employer-initiated termination include:
Employers must be able to substantiate the grounds for termination and follow applicable labour law requirements. Employees have the right to challenge the validity of a dismissal.
Notice periods in Azerbaijan vary depending on who initiates the termination and, in cases of redundancy, the employee’s length of service.
Employees may generally terminate their employment contract by providing at least one month’s written notice to the employer.
For termination due to redundancy, the minimum notice periods are:
Employees who believe their employment has been unlawfully terminated may challenge the dismissal through available dispute resolution mechanisms, including court proceedings and applicable pre-trial procedures.
Employees may also submit a claim to the State Labour Inspection Service (SLIS), which oversees compliance with employment legislation in Azerbaijan.
Unemployment benefits in Azerbaijan are regulated under the Law on Unemployment Insurance and form part of the country’s social insurance system.
Individuals may qualify for unemployment benefits where their employment ends due to liquidation of a state body or legal entity, or staff redundancy, provided they register as unemployed with the relevant employment authorities.
The level of unemployment benefits depends on the individual’s insurance history:
Individuals who voluntarily resign or are dismissed due to their own misconduct are generally not eligible for unemployment compensation. Individuals who terminate self-employment without a justified reason may also be ineligible for benefits.
Employees in Azerbaijan may be entitled to severance pay in cases of enterprise liquidation or staff redundancy. The amount depends on the employee’s length of service.
The minimum severance payments are:
Employment contracts in Azerbaijan may include a probationary period to assess an employee’s professional qualifications and suitability for the role.
The probationary period must be mutually agreed upon and cannot exceed three months. Periods of temporary incapacity, justified absence, or other periods when the employee’s position and salary are preserved are not counted towards the probationary period.
If the employment contract does not specify a probationary period, the employee is considered hired without probation.
If neither party terminates the employment contract before the probationary period ends, the employee is considered to have successfully completed probation. The employment relationship may then only be terminated on the grounds established by the Labour Code.
If the employee’s performance during probation is considered unsatisfactory, the employer may terminate the employment contract.
In Azerbaijan, the right to obtain a patent for industrial property created by an employee depends on how and under what circumstances the intellectual property was developed.
Where industrial property is created as part of the employee’s work duties or a specific task assigned in writing by the employer, the right to obtain the patent belongs to the employer, unless otherwise agreed in the contract.
The relationship between the employer and employee regarding the creation of new industrial property should be regulated by contract.
Employees must notify their employer in writing within one month of creating the industrial property. If the employer does not apply for a patent or notify the employee of its intention to exercise the patent right within three months of receiving the notification, the right to obtain the patent transfers back to the employee.
Employee data protection in Azerbaijan is primarily governed by the Personal Data Law, which regulates the collection, processing, storage, and protection of personal information.
Personal data includes any information that can directly or indirectly identify an individual, including biometric information such as fingerprints, facial images, and DNA.
Personal data is legally protected from the moment it is collected and may be classified as confidential or public. Data owners and operators are responsible for protecting the personal information under their control.
Individuals have several rights regarding their personal data, including the right to:
Applicable data processing activities may also be subject to registration requirements with the Ministry of Digital Development and Transport and relevant secondary legislation adopted by the Cabinet of Ministers.
A non-compete agreement in Azerbaijan may restrict an employee from engaging in competitive activities after their employment ends.
These agreements generally protect the employer’s business interests, proprietary information, and trade secrets. They may include restrictions on:
Non-compete provisions may apply not only to employees but also to contractors and consultants, depending on the terms of their engagement.
Azerbaijan does not have specific legislation dedicated to remote work, but remote working arrangements may be established within the general framework of the Labour Code.
Employers and employees may agree on the terms of remote work, including working hours, occupational health and safety, equipment, and work-related expenses.
Employers are not generally required to provide equipment or reimburse expenses associated with remote work. However, the parties may agree that the employer will provide necessary equipment, such as computers or internet access, or cover related costs.
Employers may also choose to reimburse remote work expenses voluntarily, depending on the agreed working arrangement and the needs of the role.
As Azerbaijan does not currently have a specific legal framework for remote work, employers and employees should clearly document the terms, responsibilities, and expectations governing the arrangement.
Employers remain responsible for supervising employees working remotely, even where employees perform their duties without direct physical supervision.
Employees are expected to cooperate with reasonable remote supervision and monitoring arrangements and maintain transparent communication with their employer.
Where workplace inspections are required, employees are also expected to cooperate in facilitating the inspection process.
Clear communication and mutually agreed remote work policies are important for defining the responsibilities of both parties and supporting an effective remote working arrangement.
Employers in Azerbaijan are responsible for providing a healthy and safe working environment and taking appropriate measures to protect employees from occupational risks.
Employers are required to develop annual plans for improving working conditions, occupational safety, and employee health, including specific measures and implementation timelines.
The responsibilities of both employers and employees for maintaining a safe working environment should be clearly defined in collective agreements and employment contracts.
Hiring employees from Azerbaijan offers several notable advantages compared to other countries. The cost-effectiveness of salaries in Azerbaijan, generally lower than in many Western countries, can lead to significant budget savings for employers.
The country boasts a growing pool of skilled professionals in diverse fields like IT, engineering, and finance, supported by a focus on education and vocational training. Strategically located at the crossroads of Eastern Europe and Western Asia, Azerbaijan provides a valuable position for businesses looking to expand into the Eurasian region.
The cultural and historical ties between Eastern and Western countries can facilitate better communication and business relationships. Additionally, the growing Azerbaijani economy presents opportunities in emerging sectors, and the multilingual abilities of many Azerbaijanis, including proficiency in Azerbaijani, Russian, and English, are beneficial for international operations. Combined with recent improvements in the regulatory environment, hiring local talent can enhance business operations and contribute to success in the region and beyond.
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