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Why was the term “hourly pay” added to the calculation of wages for days off?
Why was the term “hourly pay” added to the calculation of wages for days off?
The amendment made to Article 164 of the Labour Code of the Republic of Azerbaijan (“Payment of Wages for Work Performed on Rest Days, Voting Days, Public Holidays That Are Not Considered Working Days, and the National Day of Mourning”) aims to eliminate differing interpretations that existed in practice.
To clarify the issue, it is useful to recall the approach described in the book “Labour Records: From A to Z” published by MKS Academy in 2024. Some experts argued that since the article explicitly required payment of not less than twice the daily tariff wage, an employee working only 5 hours on a rest day should still receive compensation based on a full working day. Another view held that remuneration should correspond to the actual work performed; therefore, payment should be calculated based on the actual 5 hours worked. Paying a full daily wage for only 5 hours of work was considered inconsistent with the spirit of the legislation.
In the previous version of Article 164, the term “daily tariff wage” sometimes led to misunderstandings. Following the amendment, the word “(hourly)” was added after “daily” in the second and fourth paragraphs of Part 1 of Article 164. As a result, the possibility of hourly calculation has now been explicitly established at the legislative level.
Accordingly, under Part 1 of Article 164 of the Labour Code, payment for work performed on rest days, voting days, public holidays that are not considered working days, and the National Day of Mourning shall be made as follows:
under a time-based remuneration system, at not less than twice the daily (hourly) tariff wage;
under a piece-rate remuneration system, at not less than double piece-rate prices;
for employees receiving a monthly salary, if the work is performed within the monthly working time norm, an additional payment of not less than the daily (hourly) position salary; if the work is performed beyond the monthly working time norm, an additional payment of not less than twice the daily (hourly) position salary.
Example 1. An employee working under a five-day work schedule has a tariff (position) salary of 1,000 AZN. Since the employee works in a territory liberated from occupation, a coefficient of 1.2 is applied, resulting in an actual salary of 1,200 AZN.
The monthly working time norm in February is 160 hours. The employee worked 5 hours on a rest day.
Calculation:
1,000 AZN / 160 hours × 5 hours × 2 = 62.50 AZN
The double rate is applied in accordance with Article 164.
Example 2. The same employee worked on two rest days in February. Assume that February contains 20 working days.
Calculation:
1,000 AZN / 20 days × 2 days × 2 = 200 AZN
As illustrated by the examples, the basis for calculation should not be the employee’s actual earnings (e.g., 1,200 AZN), but rather the tariff (position) salary of 1,000 AZN. This is because Article 164 of the Labour Code refers to the concept of a “tariff (position) salary” rather than “wages” or “salary earnings.”
The amendment made to Article 164 of the Labour Code of the Republic of Azerbaijan (“Payment of Wages for Work Performed on Rest Days, Voting Days, Public Holidays That Are Not Considered Working Days, and the National Day of Mourning”) aims to eliminate differing interpretations that existed in practice.
To clarify the issue, it is useful to recall the approach described in the book “Labour Records: From A to Z” published by MKS Academy in 2024. Some experts argued that since the article explicitly required payment of not less than twice the daily tariff wage, an employee working only 5 hours on a rest day should still receive compensation based on a full working day. Another view held that remuneration should correspond to the actual work performed; therefore, payment should be calculated based on the actual 5 hours worked. Paying a full daily wage for only 5 hours of work was considered inconsistent with the spirit of the legislation.
In the previous version of Article 164, the term “daily tariff wage” sometimes led to misunderstandings. Following the amendment, the word “(hourly)” was added after “daily” in the second and fourth paragraphs of Part 1 of Article 164. As a result, the possibility of hourly calculation has now been explicitly established at the legislative level.
Accordingly, under Part 1 of Article 164 of the Labour Code, payment for work performed on rest days, voting days, public holidays that are not considered working days, and the National Day of Mourning shall be made as follows:
under a time-based remuneration system, at not less than twice the daily (hourly) tariff wage;
under a piece-rate remuneration system, at not less than double piece-rate prices;
for employees receiving a monthly salary, if the work is performed within the monthly working time norm, an additional payment of not less than the daily (hourly) position salary; if the work is performed beyond the monthly working time norm, an additional payment of not less than twice the daily (hourly) position salary.
Example 1. An employee working under a five-day work schedule has a tariff (position) salary of 1,000 AZN. Since the employee works in a territory liberated from occupation, a coefficient of 1.2 is applied, resulting in an actual salary of 1,200 AZN.
The monthly working time norm in February is 160 hours. The employee worked 5 hours on a rest day.
Calculation:
1,000 AZN / 160 hours × 5 hours × 2 = 62.50 AZN
The double rate is applied in accordance with Article 164.
Example 2. The same employee worked on two rest days in February. Assume that February contains 20 working days.
Calculation:
1,000 AZN / 20 days × 2 days × 2 = 200 AZN
As illustrated by the examples, the basis for calculation should not be the employee’s actual earnings (e.g., 1,200 AZN), but rather the tariff (position) salary of 1,000 AZN. This is because Article 164 of the Labour Code refers to the concept of a “tariff (position) salary” rather than “wages” or “salary earnings.”