Hiring guide in Armenia

Legal framework

Types of employment contracts

In Armenia, there are 3 types of employment contracts — fixed-term, indefinite-term, and temporary employment contracts.

Fixed-term contracts designate a predetermined timeframe for the employment arrangement. They typically outline the terms and conditions of employment, such as salary, benefits, and duties. Such contracts offer flexibility to both parties.

In contrast, indefinite-term contracts establish an enduring employment relationship without a specified end date. They provide greater job security to employees and commonly incorporate provisions for termination with notice periods and severance compensation. These contracts typically delineate the rights and obligations of both parties, ensuring a stable and enduring professional relationship.

Temporary employment contracts are used for transient or seasonal work commitments. They are typically assigned for specific projects or duties and possess a defined duration.

Content of an employment contract

Employment contracts in Armenia must detail the year, month, date, and location of both the agreement’s acceptance and finalisation. Additionally, the contract should specify the complete address where it was established, ensuring transparency and providing a clear point of reference.

Moreover, the contract must explicitly state the employee’s full name, including their given name and surname. For the employer, the contract should indicate the name of the organisation or the complete name of the individual employer.

A crucial aspect of the contract is the employment commencement date, signifying when the employee is slated to commence their duties. Furthermore, the contract is required to specify the position or job title and delineate the job-related duties, ensuring mutual understanding between both parties regarding the role’s responsibilities and expectations.

 Download a free employment contract for Armenia through Native Teams.

Oral, written or electronic employment contracts

In Armenia, employment contracts are established through oral, written, or electronic agreements, each carrying specific legal requirements and implications. While oral contracts hold legal validity, written and electronic contracts are strongly recommended to ensure clarity and mitigate potential disputes.

Oral employment contracts are typically used for brief or informal employment. However, due to the absence of a tangible record, oral contracts can engender misunderstandings and disputes, making them less prevalent and typically confined to casual or temporary work setups.

Written employment contracts are the prevalent and favored form in Armenia. They furnish a comprehensive and legally binding document outlining employment terms and conditions, like job roles, remuneration, working hours, leave entitlements, and termination procedures. Signed by both parties, written contracts offer a clear record that can be referenced in case of disputes or misunderstandings.

With technological advancement, electronic employment contracts are becoming increasingly prevalent. Recognised as legally binding under the Labour Code, electronic contracts must meet specific criteria, including secure electronic signatures and compliance with digital authentication standards.

Working hours

The standard workweek comprises 40 hours, typically distributed across five days, resulting in an eight-hour workday. On the other hand, part-time employment involves fewer than the standard 40 hours per week, with corresponding adjustments in pay.

Night work

Night work, as defined by Armenia’s Labour Code, refers to any labour performed between 10:00 PM and 6:00 AM. This timeframe ensures that employees working during these hours receive specific protections and benefits, recognising the potential health and social impacts of late-night work. 

Breaks and types of leaves

If their workday exceeds 6 hours, employees are entitled to at least 1 hour of rest for a meal and relaxation. Typically, these breaks are unpaid unless otherwise specified in the employment contract or a collective agreement.

Moreover, employees are granted daily and weekly rest periods. A continuous rest period of at least 11 hours must be provided between two consecutive working days (shifts), and employees must receive a minimum of 35 consecutive hours of rest per week.

Annual leave

Employees become eligible for annual leave after completing at least 6 months of uninterrupted employment with the same employer. 

Once the six-month period is completed, employees are guaranteed a minimum of 20 working days of annual leave per year. However, this entitlement may expand based on the length of an employee’s service, with additional days granted for each year of continuous employment. 

For instance, employees with up to five years of service qualify for 24 working days of annual leave, while those with over 15 years of service are entitled to 30 working days.

Public holidays

Armenia observes several public holidays, encompassing New Year’s Day, Christmas, International Women’s Day, and Independence Day, among others. Mandated by the government, these holidays permit employees to take time off without any deduction in pay.

Salary

According to the regulations outlined in the Labor Code, the salary must be specified within employment contracts and must meet or surpass the minimum wage set by the government, presently standing at 500 AMD per hour, or 75,000 AMD per month for a typical 40 hour work week.

To calculate the salary and taxes in Armenia, click here.

Sick leave

The employer is responsible for salary payments for the initial five days of sick leave. After the fifth day, compensation is provided by the State Social Security Service. Typically, the compensation rate from the fifth day stands at 80% of the employee’s average salary. 

Parental leave

Female employees are entitled to 140 calendar days of compensated maternity leave, typically divided into 70 days preceding and 70 days following childbirth. Fathers are allocated five days of paid paternity leave subsequent to the birth of their child. This leave can be utilised at any time within one month of the child’s birth.

Following maternity leave, either parent has the option to take unpaid childcare leave until the child is three.

Methods of employment termination

Termination by mutual agreement represents the simplest form of contract termination, wherein both parties consent to conclude the employment relationship under mutually agreed-upon terms. Employees can terminate their employment contracts by providing a written notice. Typically, the notice period spans one month.

Ordinary dismissal by employer

Ordinary dismissal pertains to the termination of an employment contract by the employer for reasons unrelated to the employee’s misconduct. Such reasons may include redundancy, company liquidation or reorganisation, or the employee’s inability to fulfil their duties due to objective factors like health issues or loss of necessary qualifications.

Notice period

According to the Labour Code of Armenia, the standard notice period is two months unless explicitly stated otherwise in the employment contract or collective agreement. Throughout this notice period, the employee retains the right to receive their regular salary and benefits.

Probationary period

The maximum duration of the probationary period in Armenia is three months, although shorter durations can be negotiated between the employer and the employee. Throughout this period, the employee’s performance and adaptability to the role are closely observed. 

Severance pay

The amount of severance pay is typically determined based on factors such as the employee’s average salary and length of tenure. For instance, employees dismissed due to redundancy are entitled to severance pay equivalent to one month’s average salary for each year of service.

Prohibition of competition

Non-compete clauses are typically acceptable in employment contracts as long as they comply with specific constraints and don’t unreasonably restrict the employee’s right to work.

Remote working policy

For a remote work arrangement, a written contract between the employer and the employee is important. It should include crucial elements, such as the duration of the arrangement (whether temporary or indefinite), the employee’s designated work schedule and availability, their responsibilities, performance expectations, and the prescribed channels and protocols for communication between the employer and employee.

In addition, the agreement should address the equipment and resources provided by the employer to facilitate remote work and state procedures for reporting work-related injuries or illnesses.

Intellectual property rights

The employer retains intellectual property (IP) rights to any work produced by an employee within the scope of their job. This encompasses inventions, software, designs, literary works, and similar creations. However, this arrangement can be altered through a contractual understanding between the employer and the employee.

Employee data privacy

Employers must obtain explicit employee consent before gathering and processing their personal data, ensuring transparency and adherence to legal mandates. They must also implement suitable technical and organisational measures to protect personal data. These measures may encompass access controls, data encryption protocols, and routine security audits.

Responsibilities within a remote work arrangement 

The Labour Code of Armenia explicitly covers remote work arrangements and their associated obligations. A written agreement delineating the particulars of the arrangement and the respective responsibilities of both parties involved is obligatory.

Health and safety at home

Employers are required to carry out a comprehensive risk assessment tailored to the conditions of remote work. This assessment is designed to pinpoint potential hazards and risks inherent in the employee’s home workspace, including concerns such as ergonomic challenges, electrical safety issues, and fire hazards.

What are the advantages of hiring employees from Armenia vs other countries?

Hiring employees from Armenia presents several advantages compared to other countries. In terms of cost-effectiveness, labour expenses in Armenia tend to be lower than in many Western countries, making it an appealing option for businesses seeking to reduce costs without compromising quality.

Armenia’s favourable time zone (GMT+4) enables overlapping working hours with both European and Asian countries, facilitating real-time communication and collaboration.

Many Armenians are multilingual and proficient in languages such as English, Russian, and Armenian. This linguistic diversity can be advantageous for businesses with global operations or clients, facilitating effective communication across borders.

Why use Native Teams for hiring in Armenia?

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• Compliance expertise: we can assist your company in navigating the regulatory environments and ensure you meet all relevant requirements.
• Local support: We can assist you in understanding and complying with the relevant local laws.