Area: 29,700 SQ.KM.
Capital: YEREVAN (1,075,000)
LITERACY RATE: 99.6%
KNOWLEDGE OF ENGLISH: 40%
climate: summer 35c; winter 0c
Currency: Dram ($1 = 475 AMD)
average Monthly salary: $378
gdp growth (2018): 5.2%
gdp per capita: $4,212
wp doing business rank (2019): 41
unemployment RATE: 16.9%
inflation rate (2018): 2.5%
As a general rule, a holder of an Armenian visa is not entitled to work in Armenia unless s/he also holds a work permit. Highly skilled foreign specialists, business owners, executives and certain other categories of workers are exempt from work permit requirements.
The transfer of staff (skilled or non-qualified) is subject to obtaining a work permit and, where necessary, a temporary residence permit. In Armenia, for work permit requirements, no distinction is made between intra-company transfers, local hires or subcontracting employment. The work permit has to be applied for on behalf of the legal employer and is issued for the duration of the employment contract. The law requires the employer to search for Armenian citizens to do the job.
Work permit requirements do not apply to the following categories of foreigners:
A business visitor cannot undertake work activities while in Armenia, unless these activities are exempted from work permit requirements. Permitted activities during a business trip include meetings, interviews, discussions, negotiations, exploring business opportunities, attending conferences, conducting site visits, taking orders or purchasing goods or services. Payment by an Armenian entity of salary or other remuneration would be evidence of work.
Employers which already employed foreign labor at the time the work permit regulations came into effect do not have to apply for work permits until the current employment agreements expire. However, they must present copies of such employment agreements to the Ministry of Labor and Social Affairs (MLSA) within 60 days. Any new hiring will require a work permit.
Exemption for workers employed by non-Armenian employers.
Unless a foreign individual is exempted from work permit requirements, the employer must first obtain a work permit by applying to the MLSA. The migrant will normally then apply for a temporary residence permit in order to be granted the permission to live and work in Armenia.
The process at the MLSA involves a test of the Armenian market to ensure that there are no qualified and available Armenian workers to fill the position. If MLSA identifies Armenian nationals who may fit with the employer’s requirements they will be referred to the employer for an interview. The employer does not have to advertise the vacancy or to offer a certain wage (as long as the minimum monthly salary requirements are satisfied).
If no candidates are referred by the MSLA to the employer or if the employer rejects these candidates for valid reasons, the employer is then allowed to apply for a work permit for a particular foreigner. The work permit has a fixed term and is renewable on request. From the moment when a work permit is granted the foreign national can start working in Armenia.
After obtaining the work permit the foreign national has to file an application for a temporary residence permit at the Passport and Visa Department of the Police in Yerevan. The application must be accompanied by supporting documentation, including medical test results. The temporary residence card is issued within approximately 30-45 days of the application date.
Under the current regulations obtaining a work permit can take as little as 13 business days.
The employer or the employee will have to pay the fees for obtaining a work permit (AMD 25,000 or around USD 52) and, if necessary, a temporary residence permit (AMD 105,000 or around USD 219).
The following documents must be filed by the employer with the MLSA:
All documents, except for the employee’s passport, are retained by the MLSA.
The Code of Administrative Offences provides penalties for immigration/work permit violations. Failure to obtain a work permit/residence permit is punishable by a monetary fine of AMD 100,000 to 150,000 (around USD 208 to 313). Overstaying a visa or otherwise violating the immigration status is punishable by a fine of AMD 50,000 to 100,000 (around USD 104 to 208).
If, after obtaining a work permit, the employer fails to provide the position the permit was obtained for, the employer must cover the return travel costs, living, and personal property transportation expenses of the employee and the family members accompanying them.
The employment agreement shall be executed in writing, in the form of a single document, in two copies - one for the employee and the other for the employer. The agreement shall comply with all the labor laws and regulations and the employee's rights and privileges guaranteed by such laws shall not be restricted. If any regulatory amendments are enacted that improve the employee's situation the employment agreement shall be amended accordingly.
The agreement shall contain the following information:
The highlighted items are considered "essential terms" and their amendments shall follow a special procedure, including advance notices to the employee.
The following are additional terms that must be included in employment agreements signed with foreign employees working on the basis of a work permit:
The employer shall register the newly hired employee electronically with the tax office not later than on the first day of work. Moreover, the employer shall document all processes regarding the employee (hiring, firing etc.) in the form of employer's "internal acts" (orders, decrees, etc).
Employment agreements can be for a fixed term or for an indefinite term. Normally, the employment agreement shall be signed for an indefinite term, while fixed-term agreements are generally allowed only if an indefinite agreement would not be suitable because of the nature or the conditions of the work. In addition, agreements for a specific term can be used:
There is a presumption that a fixed-term agreement is automatically converted into an indefinite agreement if it is extended or if a new agreement is signed within one month following the expiration of the previous one. However, this presumption still does not work if the nature or the conditions of the work make it impossible to sign an agreement for an indefinite term.
It is not clear if restrictive covenants (non-compete, non-solicitation and similar clauses) are enforceable in Armenia. In practice the courts have upheld the validity of such restrictions with regard to independent contractors, and it is possible that they would also be enforceable against employees, provided that they are reasonably necessary to protect the employer's business interests.
Collection and processing of employee personal data is possible with the express written consent of the employee. If employees are filmed it is recommended to adopt a formal policy that would explain the legitimate needs of the employer for video surveillance, and to include an express provision about it in the employment agreement.
Volunteer work is currently not regulated in Armenia, with the exception of certain provisions in the Law on Charity and the Law on Public Associations. Volunteers do not enter into employment agreement but instead may be required to sign an agreement for volunteer work. Work permit requirements do not apply to foreigners engaged in volunteer work.
Apprenticeship is allowed under the Labor Code. However, it shall not exceed six months and apprentices shall be paid minimum salary for their work.
In accordance with the Labor Code, the employer is expected to have in place the following internal rules and policies:
It is the duty of the employer to notify the employee of all the internal policies, including disciplinary rules, working conditions, work safety and fire safety rules.
The Labor Code imposes a number of work safety requirements that include:
If employees have to work with chemicals the employer is required to meet certain requirements pertaining to labeling, special training of employees, measuring equipment, alerting and collective protection systems etc.
If one-time or periodic medical checks are required for the employees (minors, night shift workers and other categories specified in a government decree) the employer shall have an agreement with a medical institution.
The employer shall determine the factors that affect pregnant women and mothers. Pregnant women shall be entitled to additional time-off for medical checks. The list of works that are prohibited for minors and pregnant women was established by a governmental decree.
The regular work week in Armenia consists of five working days, Monday to Friday. As an exception it is possible for the employer to opt for a six-day work week, normally Monday to Saturday. If the nature of the work requires the business to operate during the weekends the employee is entitled to another day off. The duration of work shall not exceed 40 hours per week, irrespective of whether the employer has a five-day or a six-day work week. A shorter work week may be mandated by law (e.g. in case of minors or dangerous working conditions) or may be agreed upon by the employer and the employee (part-time work). If the employee works for two different employers (concurrent employment) or holds two positions (two employment agreements) with the same employer, the maximum duration of the work shall not exceed 12 hours per day (with certain exceptions for those employed by educational and medical institutions, energy suppliers etc., as specified by a decree, allowing 24-hour shifts).
Overtime work is allowed only in certain situations where there is an emergency, a natural disaster, or if discontinuation of the work will result in material damages to the employer or a breach of its contractual obligations. The maximum duration of overtime work is limited to 4 hours per every two days and to 180 hours in a year. The total duration of the work (regular and overtime) shall not exceed 12 hours per day or 48 hours per week. Restrictions on overtime work are not applicable to those holding managerial positions specified in the internal rules of the employer. Special rules on overtime work and night shifts apply to minors and pregnant women.
An employee may be required to work on a non-working day or during non-working hours (on-call work), but not more frequently than once a week and no longer than 8 hours per day. If the duration of on-call work exceeds these limits the employee can request time-off in the next month or that time be added to his/her annual vacation or a monetary compensation.
The employer shall enact internal rules establishing work and rest (shift) schedules, rules on overtime and on-call work, lunch breaks etc. The employer is also required to keep detailed records of the attendance of each employee.
Employees are entitled to an annual leave of 20 working days (24 working days in case of a 6-day working week). Extended and additional holidays are available to certain categories of workers (dangerous, stressful etc.). The annual leave can be taken partially but at least one part of it shall be at least 10 working days long. Employees are generally entitled to the annual leave after 6 months of work. Certain categories of workers are given the right to choose the time of their leave. Unused portions can be deferred to the following years but must be used within 18 months. It is prohibited to accept a monetary compensation instead of the annual leave, unless the employment is terminated in which case a compensation for unused leave shall be paid.
Maternity leave normally lasts 140 days (70 days before and 70 days after the delivery). The mother can take unpaid maternity leave up to three years after the birth of her child, keeping her position in the workplace.
An employee is entitled to a lunch break after completing 1/2 of the working hours for the day but not later than after 4 hours of work. The duration of the lunch break shall be set by the employer but shall not be shorter than 30 minutes or longer than 2 hours. Additional breaks are mandated by law for minors, nursing mothers, employees working in high and low temperatures, those engaged in dangerous and stressful work etc.
The time to rest between two working days (shifts) shall not be less than 11 hours, while the duration of the weekend rest (Saturday and Sunday) shall generally not be less than 35 hours.
In addition to the above, the Labor Code provides for the following types of leave:
The following are non-working public holidays in Armenia (16 days in total):
As of 2020, the minimum monthly salary in Armenia is AMD 68,000 ($142). Minimum hourly wages are AMD 406 ($0.85), AMD 454 ($0.95) and AMD 680 ($1.42) for 40-hour, 36-hour and 24-hour work weeks respectively. These are net (after-tax) amounts and employers must gross them up to account for taxes. Thus, the minimum gross (before-tax) salary for full-time employment will be AMD 92,617 ($193), including the net salary of AMD 68,000 ($142), the 23% income tax (AMD 21,302 or $44), the 2,5% social payment (AMD 2,315 or $5) and the flat military tax of AMD 1,000 ($2).
Salaries and wages shall be paid in cash or via bank transfer not later than the 15th day of the following month. Employers that operate in the capital city of Yerevan and have 10 and more employees are not allowed to pay wages in cash and are instead required to make bank transfers. Late payments are penalized by a 0.15% daily interest. Advance payments are allowed.
Higher rates of compensation are required in the following cases:
Allowances for business trips shall not be less than the minimum amounts set by the government. These amounts depend on the nature of the business trip (national or international) and cover the daily allowance, lodging expenses, travel expenses, visa fees, phone charges and other similar costs. Similar compensation requirements apply to field work.
Employees taking annual leaves shall be paid their average salary at least three days in advance of their leave.
Employer is generally liable for work injuries (including professional illnesses) suffered by the employee. The amount of compensation shall be determined in accordance with general rules of the Civil Code. It normally covers the lost earnings and expenses associated with medical treatment (medication, prosthetic, nurse care, supplemental nutrition etc.). If the injury resulted in death the employer will be liable for funeral expenses and for compensation to the employee's family members if they were under the care of the deceased. However, there are generally no punitive damages or moral damages in Armenia. Worker's compensation or similar insurance schemes are not mandatory in Armenia.
Employer is also normally liable for any damages caused by its employees (and sometimes even individual contractors) if such damage occurred in the course of performance of the employee's work duties (vicarious liability). The employer who compensated damages is normally entitled to a recourse claim against the employee.
Employee may be held liable for any damage (including lost profits) caused to the employer as a result of destroying, neglecting, mishandling or otherwise damaging the employer's property as well as for intentionally committed offenses. However, as a general rule, the employee's liability is limited to triple the amount of his/her average monthly salary. This limitation does not apply to damages caused intentionally or as a result of a criminal offense, or loss of tools, materials, equipment, or if the damage was caused under influence of alcohol and drugs. The employee may also be held liable to the fullest extent if he/she voluntarily signed an agreement on full material liability, provided such an agreement is in compliance with the Labor Code. If the employer decides to withhold the amounts due by the employee from the salary it must notify the employee of such a decision within one month after the damages were detected. Moreover, such withholding shall not exceed 50% of the employee's monthly salary and in any even the remaining amount shall not be less than the minimum salary set by law.
Men and women are entitled to equal pay. It is prohibited to compensate men and women differently for the same type of work. The law prohibits discrimination based on sex, age, disability, race, color, ethnic or social origin, genetic features, language, religion, worldview, political or other views, nationality, financial status, birth, or other personal and social circumstances (e.g. pregnancy). Any less favorable treatment shall be justified by a legitimate goal, and the means to achieve that goals shall be necessary and proportional.
Employers with more than 100 employees shall allocate at least 1% of their positions to workers with disabilities. Alternatively, they must pay annual contributions of AMD 300,000 ($627) for each such position to a special government fund.
Employers are allowed to apply one of the following disciplinary measures:
Before imposing a disciplinary measure the employer is required to offer the employee to submit written explanations about the incident. These explanations as well as all other relevant circumstances must be properly considered and the reasons for disciplining shall be clearly set out in the written decision. Such a decision shall be made within one month from detecting the action/inaction, but generally not later than 6 months after the commission/omission.
Employment can be terminated by mutual agreement of the employer and the employee. The party that receives the offer to terminate the employment has seven days to accept or reject it. If no action is taken the offer is considered rejected. Termination shall be documented in the form of an agreement that sets out the terms and other conditions (end date, compensation etc.).
A fixed-term employment agreement comes to an end on the date specified in the agreement, provided that either party gives at least a 10-day advance notice to the other party. Employment is also considered terminated if the employee does not report to work on the day that follows the end date. If employment continues past the end date the employment agreement is automatically converted into an indefinite-term agreement.
An employee can terminate the employment agreement (fixed-term or indefinite-term) unilaterally by giving a 30-day notice. A five-day notice is sufficient if termination is due to the employee's illness or disability that makes it impossible to continue the employment or if the employer violates the laws or the terms of the agreement. The Labor Code provides for a "cooling-off" period of three business days during which the employee is allowed to withdraw the termination notice.
Employment for an indefinite term can be terminated at the initiative of the employer if at least one of the legal grounds for such termination exists (see table below).
Legal Basis for Termination
Dissolution of the Company (Employer)
One month's wages
Layoffs caused by "production necessity" (i.e. urgent and unpredictable circumstances) or changes in 1) volumes of production; 2) economic conditions; 3) technological conditions; 4) conditions of labor organization
Employee does not meet the requirements for the position to be held or the work to be performed (due to health issues or incompetence)
Long-term disability of the employee (120 consecutive days or 140 days in a year)
Employee reaching the age of retirement (63 or 65 years), if provided by employment agreement
Less than 1 year
10 days' wages
One to five years
25 days' wages
Five to ten years
30 days' wages
Ten to fifteen years
35 days' wages
More than fifteen years
44 day's wages
Regular failure by employee to perform his/her duties without a valid reason (two disciplinary measures in the past)
Loss of confidence in the employee (material damage, disclosure of secrets)
Employee reports to work under influence of alcohol or drugs
Employee's absence from work for a whole working day (shift), without a valid reason
Employee's refusal to undergo compulsory medical examination
If employment is terminated because of economic conditions or employee's inability to meet the requirements termination is possible only if the employee rejects the employer's offer to take another position that matches the employee's abilities, qualification and health. This requirement does not apply if the employer is unable to make such an offer. An employer is generally not allowed to terminate the employment if the employee is on his/her annual leave or temporary disability leave (sick leave) or if the employee is pregnant or on strike.
The employment agreement may be terminated if the employer offered to change the essential terms of the agreement due to changes in volumes of production, economic conditions, technological conditions, or conditions of labor organization, by giving an advance notice, and the employee rejected to accept the new terms.
In the even of "mass layoffs," i.e. termination of more than 20% of the total number of employees (but not less than 10 employees) the employer is required to give a two-month notice to the Employment Agency.
During the probation period the employment agreement can be terminated by either party by giving at least at 3-day notice to the other party.
In addition, an employment agreement comes to an end if the employee 1) is conscripted for military service, 2) dies, 3) is sentenced to a penalty that is incompatible with the employment, or 4) committed a misrepresentation at the time of hiring.
Labor disputes are normally brought before the courts of general competence. Expedited (up to three months) proceedings shall apply to cases involving employment agreement termination/amendments as well as disciplinary measures.
It is possible to include an arbitration clause in the employment agreement. However, the employee still can opt for the court, unless he/she agreed to arbitration after the dispute arose. It is also possible to provide for mediation of labor disputes with the help of a certified mediator. Mediation sessions may also be mandated by the court.
In general, a three-year statute of limitations is established for disputes arising from labor disputes. However, such limitations do not apply to employee's claims for unpaid wages, protection of employee's honor and dignity, as well as compensation for wrongful death or personal injury. There is a shorter, two-month, statute of limitations for employees to challenge termination of employment. One-year statute of limitations exists for an individual's claim to qualify the work relationship as "employment."
The government agency responsible for enforcing labor law regulations is the Health and Labor Inspection Service.
Failure to comply with labor regulations is an administrative offense generally punishable by a warning or a fine of AMD 50,000 ($105). Specific penalties are provided by the Code of Administrative offenses such as hiring without checking the passport/ID card or the military records of the employee, having undocumented employees, involving minors, pregnant women or nursing mothers in works that are not authorized for such classes of workers, failure to conduct medical checks, violating work safety rules, interfering with the activities of workers's representatives, discriminating or retaliating against employees who participate in a strike.
Criminal penalties (fine or imprisonment) may be applied against those who dismiss, without a valid reason, an employee who is pregnant or has a child under three years of age. Such penalties may also be applied against the person responsible for work safety rules if the violation of such rules resulted in serious injury or occupational disease or death.
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