- Overview: Armenia
- Global HR Compliance
- Global PEO and payroll
- Expand without a company set up
- Contractor vs. employee: which is better?
Global HR Compliance in Armenia
If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in Armenia Guide below will help you understand the nuances of labor legislation in the country.
Companies hire international workforce for various reasons but in most cases they are:
- entering the foreign markets to sell company products. To do so, the company hires sales representatives who would represent their product and sell it to their local client base.
- hiring a global talent with unique skills that is unavailable in the local market or costs the company less than the talent with similar skills hired in the home country.
Before entering a certain foreign market or engaging a global talent, it is crucial for the company to understand how it can make local hires and reward its workers on a monthly basis. Growing companies often face a challenge of paying benefits and bonuses to the commission-based independent sales representatives they are working with.
If you intend to hire and pay your foreign workforce in full compliance with labor laws and regulations of Armenia, then the Global Employer of Record service from Acumen International may be the best way for you to go. We are an International PEO company and we specialize in global employment, meaning we can employ your employees in Armenia and act as their legal employer on your behalf. We will payroll your foreign workforce monthly and provide benefits to them through our global network so you don’t have to set up your own legal entities there.
We are experts in global workforce employment in , and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.
Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.
With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Armenia.
Hiring and Firing Workforce in Armenia Guide
# Employment Agreement
Permanent employment contracts
The employment agreement shall contain the following information:
- Address of contract conclusion
- The employee’s first and last and/or patronymic name
- Name of the organization or natural person employer’s first and last and/or patronymic name
- The structural subdivision (where available)
- The year, month, and date of the commencement of work
- The name of the position and/or official duties
- The amount of salary and/or the method for determining it, and any supplements, additional payments, premiums, and so on granted to employees
- Validity period of the employment contract (if applicable)
- Duration and terms of any probation period, with the consent of the parties
- Working time regime
- Normal duration of working times, or summarized calculation of working time
- The type and duration of annual leave (minimum, extended and additional).
Fixed-term contracts (terms of agreement and time limitations)
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:
- For seasonal works (the list of such work is established by a regulation)
- For temporary works for up to two months
- To replace another employee who is temporarily absent
- To hire a foreign worker for the duration of his/her work or residence permit
- To hire an employee who has reached the age of retirement.
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.
A collective labor agreement may be applicable, but signing one is not mandatory. If the parties decide to sign the collective agreement, it will define the:
- Conditions for the terms of probation periods
- Conditions for significant changes in terms of employment and notification deadlines
- Terms for the termination of the employment contract
- Structure of work, rest periods, vacations, and vacation dates
A collective agreement can provide more favorable conditions for employees than those defined by the Labor Code. The terms of the agreement that are less favorable to employees compared with the regulations of the Labor Code will have no legal effect.
# Employment Termination and Severance Pay (Dismissal)
An employee can terminate the employment agreement (fixed-term or indefinite-term) unilaterally by giving notice. The Labor Code provides for a “cooling-off” period of three business days during which the employee is allowed to withdraw the termination notice.
# It is prohibited to dismiss
Termination of an employment contract by the employer is prohibited in a number of circumstances:
- At a time when an employee is temporarily unable to work
- When an employee is on leave
- After a decision on calling a strike is adopted, the employee takes part in the strike in the manner defined by law
- During the implementation of duties imposed on the employer by state and local self‐ governance bodies
- Concerning pregnant women, from the time that she has submitted a pregnancy certificate to the employer until one month after the end of the pregnancy and maternity leave
- Concerning a person who is not on leave but has care of a child who is not less than one year old, except for certain exceptions provided for by law.
# Notice period
An employee can terminate the employment agreement 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.
# Employee Benefits and Contributions
Mandatory benefits required by law to be provided by an employer: public holidays entitlement, annual paid leave, maternity leave, paternity leave, sick leave.
Non-mandatory benefits that are offered by an employer:
- Medical insurance
- Corporate events
- Trainings, assistance in the educational process, language courses
- Flexible hours/Additional days off
- Stock options. Employee stock options give an employee an opportunity to buy a specified number of shares in a company at a specified price within a set period of time
- Additional financial support. There are several financial benefits: performance-based bonuses, referral bonuses, annual bonuses
# Probationary period
A probationary period is permissible with the consent of the parties. The party who initiated the probationary period may terminate the contract by giving the other party three days’ notice in writing. The other party shall be guided by the general principles of notification when terminating the contract. A probation period shall not be longer than three months
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.
# Work hours
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.
# Annual Leave
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.
# Sick Leave
Employers provide paid sick leave to their employees from the 2nd to the 5th day. After the 6th employees are covered by social insurance
# Parental Leave
Maternity leave normally lasts 140 days (70 days before and 70 days after the delivery) or 155 days if there are complications and 180 days for multiple births. Working women shall be provided with pregnancy and maternity leave with their full wage being paid.
Paternity rights and leaves
Fathers can take 5 days of paid leave within the first 30 days after the child is born
Acumen International can help you fast-track your possibilities of entering and expanding your business in Armenia by providing you with our Employer of Record services. Our unique mix of PEO/EOR solutions will enable you to jumpstart your global operations almost immediately, cost-effectively and compliantly without any need to set up a legal entity first or afterwards.