Azerbaijan is actively discussing the possibility of transitioning to an hourly wage system as part of the budget formation process for the upcoming year. This potential shift is being considered as part of a broader roadmap aimed at improving labor practices. The proposed changes are based on the Business Ready reports from the World Bank Group.
According to experts, adopting an hourly wage system could lead to several positive changes for workers:
- More accurate time tracking.
- Workers could potentially take on multiple jobs, distribute their working hours more flexibly, and increase their income this way.
- Special rates would apply for work performed during weekends and overtime.
Additionally, new system will be introducing minimum hourly rates.
On the other hand, previously it was also discussed that the new system will introduce regulated tasks, meaning that a specific volume of work must be completed within one hour. In other words, hourly wages may encourage employees to use their working time more efficiently, as pay will directly correlate with hours worked. While this benefits employers by potentially reducing the number of workers or working hours, it may also increase the workload per hour and may not guarantee stable income for employees.
Labor market specialists suggest that strengthening social protection systems might be necessary to prevent sharp declines in income and ensure the transition does not have adverse social effects. The development of this new mechanism is underway, and further details will be revealed following ongoing discussions.
Stay tuned for updates on how this transition will unfold and when it will be introduced. With our EOR (Employer of Record) service, you will be informed about local law changes in time, allowing you to make proactive decisions and swiftly adapt your business operations when needed.
