Hiring guide in Azerbaijan

What should I know about hiring in Azerbaijan?

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 Azeri legislation. The easiest and fastest way to hire an Azeri employee without opening a separate entity is through an employer of record provider like Native Teams.

Why is Azerbaijan a good choice for finding remote employees?

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. Also, the country’s youthful and dynamic population is increasingly engaged in remote work, bringing fresh perspectives and energy to the workforce. Apart from the young and 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.

How can Native Teams Help you hire in Azerbaijan?

For a streamlined hiring process in Azerbaijan, Native Teams provides essential support through our Employer of Record services. Our solutions are crafted to navigate the intricacies of Azerbaijani employment regulations, cultural norms, business practices, and language considerations. Our team of skilled tax and legal professionals acts as your trusted partner throughout the recruitment journey in Azerbaijan. We ensure adherence to local payroll requirements, tax obligations, and HR documentation, allowing you to efficiently hire and integrate Azerbaijani talent into your remote team.

Hire your first Azerbaijani employee with Native Teams.

Legal requirements for hiring in Azerbaijan

Employers must follow a few essential laws and regulations to ensure a fully compliant employment process in Azerbaijan.

Legal framework

Types of employment contracts

In Azerbaijan, employment contracts are governed by the Labor Code and can be categorised into several types, each serving different purposes based on the nature of employment and the needs of both the employer and employee. The main types of employment contracts in Azerbaijan are indefinite-term, fixed-term, seasonal, part-time, temporary, and probationary. 

Each type of contract must be documented in writing and specify the terms of employment, including job duties, salary, working hours, and other relevant conditions. Employers must ensure the terms comply with the Labor Code and applicable regulations.

Content of an employment contract

An employment contract in Azerbaijan must include several essential elements to ensure legal compliance and clarity. It should detail the employer and employee’s names and contact information, the job title and a comprehensive description of the employee’s duties. The contract must specify the duration of employment, whether fixed-term, indefinite, part-time, seasonal, or temporary, and the location of the workplace.

It should outline the working hours, including daily and weekly schedules and break times, salary, payment frequency, and any additional compensation or benefits. Additional provisions relevant to the employment relationship, the signatures of both parties and the date are also necessary to formalise the agreement.

Download a free employment contract for Azerbaijan through Native Teams.

Oral, written or electronic employment contracts

In Azerbaijan, employment contracts can be oral, written, or electronic, though written contracts are the most common and advisable for clarity and legal security. Oral contracts are legally recognised but can lead to disputes due to the need for a formal record. Written contracts provide a clear, detailed account of terms and conditions, reducing the potential for misunderstandings. 

Electronic contracts, valid under Azerbaijani law if they meet legal requirements and use recognised digital signatures, offer a modern, efficient alternative. Written or electronic contracts are preferred for formal and long-term employment relationships to ensure comprehensive documentation and compliance.

Probationary period

In Azerbaijan, the probation period can be up to 3 months for all new employees. This period allows both the employer and employee to evaluate the suitability of the employment relationship.

Working hours 

The standard workweek in Azerbaijan is 40 hours, typically 8 hours per day from Monday to Friday. For part-time workers, the number of working hours depends on the employer’s policies and the nature of the job.

Breaks and night work

In Azerbaijan, the Labor Code stipulates specific breaks and night work regulations to ensure fair labour practices. Employees are entitled to rest breaks during their workday, typically including a meal break of at least 30 minutes if their shift exceeds 6 hours. This break is generally unpaid unless specified otherwise in the employment contract or company policy. Additionally, employees must receive at least 12 hours of rest between the end of one workday and the start of the next. 

For night work, defined as work performed between 10 PM and 6 AM, the Labor Code mandates that night shift workers should receive a higher wage rate, typically 20% more than their regular salary. Employers must also ensure that night workers have access to regular health checks and that their working conditions comply with safety standards to mitigate the risks associated with nighttime labour.

Annual leave

In Azerbaijan, employees are entitled to annual leave as the Labour Code stipulates. Employees are granted at least 21 calendar days of paid annual leave annually. This entitlement allows employees time to rest and recharge, contributing to their overall well-being and productivity. The timing and scheduling of annual leave should be agreed upon between the employer and employee, with consideration given to the business’s operational needs. 

Employees are encouraged to use their annual leave within the year it is accrued. However, unused leave can often be carried over to the next year, depending on the company’s policy or specific contractual agreements. If an employee does not use their annual leave, they may be entitled to compensation for the unused days upon termination of employment.

Public holidays

In Azerbaijan, public holidays are set by the government and observed nationwide. Key public holidays include:

• New Year’s Day: January 1
• Martyrs’ Day: January 20
• International Women’s Day: March 8
• Novruz Bayram: March 20-24
• Ramazan Bayram: Variable
• Independence Day: May 28
• Gurban Bayram: Variable
• State Independence Day: October 18
• National Revival Day: November 9
• National Salvation Day: June 15
• Christmas Day: December 25 (observed by the Christian community)

Salary

In Azerbaijan, wages and contributions are regulated by the Azeri Labor Code and other relevant legislation to ensure fair compensation and social protection for employees. Employers must pay employees at least the minimum wage set by the government, which is reviewed and adjusted periodically. Salaries must be paid in full and on time, typically monthly. 

In addition to wages, employers are responsible for making mandatory social security contributions, which include payments for pensions, health insurance, and unemployment benefits. Both employers and employees contribute to the State Social Protection Fund, with specific percentages deducted from the employee’s salary and matched by the employer.

Employers must also adhere to regulations regarding overtime pay, which is calculated at a higher rate for work performed beyond regular hours. Accurate payroll records and timely submission of contributions are essential to comply with legal requirements and avoid penalties.

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

Sick leave

Employees in Azerbaijan are entitled to paid sick leave. The first 14 days of sick leave are paid at 50% of the average salary, while days beyond this period are typically covered at 100% of the average salary. The sick leave benefit is subject to the length of service and specific employer policies.

Parental and maternity leave

Female employees in Azerbaijan are entitled to 126 calendar days of maternity leave, which includes 70 days before the expected date of childbirth and 56 days after. Paternity leave is generally 14 days, which can be taken within the first 30 days following childbirth.

Termination of the employment relationship

In Azerbaijan, terminating an employment relationship requires adherence to specific procedures outlined in the Labor Code. Employers must provide written notice, usually one to two months, depending on the contract and length of service. Valid grounds for dismissal include redundancy or performance issues, and severance pay may be required. Employees can challenge unfair dismissals through legal channels and special protections apply to categories such as pregnant women. Employees must also give notice as specified in their contract for voluntary resignation.

Ordinary dismissal by the employer

Ordinary dismissal by an employer involves several key steps and conditions as specified by the Azerbaijani Labor Code. The employer must provide written notice of termination, generally one to two months in advance, depending on the employee’s length of service and the contract terms. The dismissal must be based on valid grounds such as company restructuring, redundancy, or unsatisfactory performance, which should be documented to avoid disputes. 

Employees are typically entitled to severance pay, calculated based on their tenure and contractual terms. The dismissal process must comply with legal requirements to ensure fairness and avoid potential legal challenges from the employee.

Notice period and challenging the dismissal

When an employer initiates an ordinary dismissal, they must provide written notice to the employee, typically ranging from one to two months, depending on the employment length and the contract terms. This notice period allows the employee time to prepare for the end of their employment. 

Employees who believe the dismissal is unjust can challenge it through labour dispute resolution mechanisms. They can file a complaint with the State Labor Inspectorate or pursue legal action in court, seeking remedies such as reinstatement or compensation if the dismissal is unlawful. Ensuring proper documentation and adherence to legal procedures is crucial for both parties to address and resolve disputes effectively.

Rights and obligations of unemployed individuals

In Azerbaijan, unemployed individuals have the right to unemployment benefits, job placement services, and access to training programs, provided they meet eligibility criteria. They may also continue receiving health insurance depending on their circumstances. Obligations include actively seeking employment, participating in job training or counselling, and complying with regulations set by the State Employment Agency. Meeting these requirements helps secure support and enhances their chances of finding new work.

Severance pay

Severance pay is required when an employer terminates an employee’s contract under certain conditions, such as redundancy or company restructuring in the country. The amount of severance pay is typically calculated based on the employee’s service length and employment contract terms. Generally, severance pay is equivalent to at least one month’s salary for each year of service, although specific agreements or company policies might offer more favourable terms.

Probationary period

In Azerbaijan, the probationary period is a designated time frame during which the performance and suitability of a new employee are evaluated. Typically, this period lasts up to three months, although it can be extended to six months in certain cases. 

During the probationary period, either party may terminate the employment contract with shorter notice, and the employee may not be entitled to all benefits and protections available to permanent staff until the successful completion of this period.

Prohibition of competition 

The prohibition of competition, often outlined in non-compete clauses, restricts employees from engaging in competitive activities after leaving their employment. These clauses are typically included in employment contracts and aim to protect the employer’s business interests, such as confidential information and trade secrets. 

Under Azerbaijani law, non-compete clauses must be reasonable in scope, duration, and geographical area to be enforceable. They should not unduly restrict an employee’s ability to find new work. A non-compete clause may be challenged and potentially invalidated if deemed excessive or unfair. Employers must ensure that such clauses are clearly defined and legally compliant to avoid disputes and ensure they serve their intended purpose without infringing on employees’ rights.

Remote working policy

A remote working policy outlines the terms and conditions under which employees can work from locations outside the traditional office environment. In Azerbaijan, this policy should include several key elements to ensure clarity and compliance with labour laws. It should specify the eligibility criteria for remote work, outlining which positions or employees can work remotely. The policy must detail expectations regarding work hours, communication, and productivity standards to ensure that remote employees remain accountable and aligned with company objectives.

Responsibilities within a remote work arrangement

Employees working remotely in Azerbaijan must fulfil their job responsibilities with the same diligence and efficiency as if they were in a traditional office. They must ensure a proper and secure work environment and adhere to the company’s work hours and performance standards. Regular communication with supervisors and colleagues is essential to maintain effective coordination and productivity. Employees must also comply with organisational policies and data protection measures to safeguard company information.

Health and safety at home

Health and safety regulations for remote workers require employers to ensure that employees working from home have a safe and healthy work environment. Employers are responsible for guiding the setting up of an ergonomic workspace, which includes proper desk and chair arrangements, adequate lighting, and the safe placement of equipment to prevent musculoskeletal injuries. 

Overall, maintaining communication about health and safety practices and addressing any issues helps protect remote employees’ well-being and ensure compliance with legal requirements.

Intellectual property rights

In Azerbaijan, any intellectual property developed by an employee during their employment is generally considered the property of the employer. This includes inventions, designs, and other creative outputs that are created using the employer’s resources or during the employee’s duties. Employees are typically required to transfer all rights to such intellectual property to the employer, as specified in their employment contract or company policies.

Employee data privacy

The Azerbaijani Labour Code mandates that employers must protect the privacy of employee data. Personal information collected from employees should be handled confidentially and used exclusively for employment-related purposes. Employers are obligated to implement adequate security measures to prevent unauthorized access to personal data. Employees have the right to access their personal information held by the employer and to request corrections or updates as necessary.

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

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.

Why use Native Teams for hiring in Azerbaijan?

Native Teams lets you employ team members ‘like a local’ meaning you get all the benefits of a global team, wherever you are based. Here are the reasons why you should use Native Teams for hiring:

• No paperwork: We will handle all the necessary paperwork for you.
• Save on taxes: We help you handle your taxes.
• No company set up: You can expand your business using our company entitles.
• Online onboarding: We’re here to ensure your onboarding process is trouble-free.
• No accounting: We will handle all of your accounting needs, including invoicing, payroll, and more.
• Increase your profit: We assist you in growing your business and maximizing your profits.
• 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.