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Key Points in the Implementation of Hourly Wage System
Key Points in the Implementation of Hourly Wage System
As previously reported, the Minister of Labour and Social Protection, Anar Aliyev, has stated that work is underway on nearly 200 amendments to the Labour Code.
According to the Minister, one of the proposed changes to the Labour Code involves the introduction of an hourly wage system. This raises an important question: how will the implementation of hourly wages affect employers and employees?
It should be noted that a minimum hourly wage is already applied in several developed countries. For example, in the United States, hourly wages vary by state. While the federal minimum wage is $7.25, it is $16 in California. In light of the upcoming implementation of an hourly wage system in our country, we would like to highlight some key points for our colleagues.
First point. Just as there is a minimum monthly wage in our country, a minimum hourly wage will also be established. Just as it is prohibited to set a monthly salary below 400 AZN for full-time workers, hourly-paid workers will not be allowed to receive a wage below the legally defined minimum hourly rate. Therefore, workers employed on an hourly basis will be entitled to a higher hourly wage. For example, a worker earning 400 AZN per month with a monthly work norm of 160 hours (based on 20 working days) would earn an hourly rate of 2.5 AZN (400 AZN ÷ 160 hours). However, we believe that the hourly wage for those on an hourly system will be set at a higher rate than 2.5 AZN.
Second point. Who will be subject to the hourly wage system? Some colleagues believe that hourly wages will be applied only to specific positions within certain sectors. However, according to the information we have obtained, the hourly wage system will apply to individuals who sign short-term employment contracts. This means that employers will not be required to calculate a minimum hourly wage for employees under indefinite or long-term employment contracts.
As previously reported, the Minister of Labour and Social Protection, Anar Aliyev, has stated that work is underway on nearly 200 amendments to the Labour Code.
According to the Minister, one of the proposed changes to the Labour Code involves the introduction of an hourly wage system. This raises an important question: how will the implementation of hourly wages affect employers and employees?
It should be noted that a minimum hourly wage is already applied in several developed countries. For example, in the United States, hourly wages vary by state. While the federal minimum wage is $7.25, it is $16 in California. In light of the upcoming implementation of an hourly wage system in our country, we would like to highlight some key points for our colleagues.
First point. Just as there is a minimum monthly wage in our country, a minimum hourly wage will also be established. Just as it is prohibited to set a monthly salary below 400 AZN for full-time workers, hourly-paid workers will not be allowed to receive a wage below the legally defined minimum hourly rate. Therefore, workers employed on an hourly basis will be entitled to a higher hourly wage. For example, a worker earning 400 AZN per month with a monthly work norm of 160 hours (based on 20 working days) would earn an hourly rate of 2.5 AZN (400 AZN ÷ 160 hours). However, we believe that the hourly wage for those on an hourly system will be set at a higher rate than 2.5 AZN.
Second point. Who will be subject to the hourly wage system? Some colleagues believe that hourly wages will be applied only to specific positions within certain sectors. However, according to the information we have obtained, the hourly wage system will apply to individuals who sign short-term employment contracts. This means that employers will not be required to calculate a minimum hourly wage for employees under indefinite or long-term employment contracts.