Employ Candidates Compliantly in Uzbekistan

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  1. Overview: Uzbekistan
  2. Global HR Compliance
  3. Global PEO and payroll
  4. Work permit for hiring expats via PEO
  5. Expand without a company set up
  6. Contractor vs. employee: which is better?
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Global HR Compliance in Uzbekistan

If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in Uzbekistan Guide below will help you understand the nuances of labor legislation in the country.

There are two main reasons for companies hiring foreign workforce:

  • Expanding into foreign markets to sell company product or products there. In this case, companies hire sales representatives who would exclusively represent their product in the target market and sell it to their local client base.
  • Hiring the right foreign talent with a unique expertise, often related to IT sphere that cannot be found in the home country or that costs less compared to local specialist with similar skills.

After you have found the right candidate, the question is how to hire and provide compensation to this person so you as a business remain 100% compliant when working with global workforce. Another thing to consider is whether you want to keep the talent long-term and how you can do that.

If you need to hire foreign workforce in Uzbekistan so you can expand there, then our Global Employer of Record solution may be of help. We help you legally hire and reward your foreign workforce by making them employees via a global employment outsourcing service. This is simple as employ your in-house workforce with the only difference that workers can live anywhere in the world and Acumen International would be their legal employer on your behalf. This means we would bear all employment risks, not you. Also, we manage bonuses, vacations, sick leave and can rent the office and a car for your foreign sales representatives if that is what you need.

With our solution, you can test new foreign markets before deciding whether you are going to get established there. You gain flexibility and expand with reduced costs, and easily withdraw from the unattractive countries.

We are experts in global workforce employment in Uzbekistan, 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 Uzbekistan.

See the guide below for a general overview of labor rules and regulations in Uzbekistan. Or contact us if you need to employ workers in Uzbekistan or would like to get more details.

Hiring and Firing Workforce in Uzbekistan Guide

# Employment Agreements

Labor agreements may be concluded: 

  • For unlimited term
  • For a fixed term not exceeding 5 years
  • For the term for fulfillment of a certain work.

Permanent employment contracts 

The content of the employment contract is determined by the agreement of the parties, as well as legislative and other normative acts on labor.

By agreement of the parties to the employment contract, the following shall be determined

  • Place of work (enterprise or its subdivision)
  • The labor function of an employee is a specialty, qualification, position for which he/she will work
  • Day of the beginning of work
  • The amount of payment and other working conditions

The level of labor rights and guarantees for employees, established by legislative and other regulatory enactments, can not be reduced when concluding an employment contract.

Form of the employment contract 

The form of the employment contract is developed, taking into account an approximate agreement, approved in the order established by the Government of the Republic of Uzbekistan.

The employment contract shall be made in an amount not less than two copies having equal force, and shall be transferred to each of the parties for storage.

The contract specifies the addresses of the parties.

The employment contract is signed by employee and the official with the right of employment, indicating the date of signing. The signature of the official is certified by the seal of the company (if there is a seal), confirming the authenticity and validity of the signature.

If the employment contract does not specify the term of its operation, the contract is considered concluded for an indefinite period.

An employment contract concluded for an indefinite period can not be renewed for a certain period of time, as well as for the duration of a certain work without the consent of the employee.

  • Casual employment contracts
  • Fixed-term contracts

Labor agreement concluded for a term of fulfillment of certain work is a fixed-term labor contract. Labor Code provides that fixed-term labor contracts may only be concluded if unlimited labor contracts cannot be concluded due to the presence of circumstances.

The legislation determines such circumstances including but not limited to:

  • Nature of the prospective work.
  • Conditions of performance of the work.
  • Interests of employee.
  • Other cases provided for by the legislation.

# Employment Termination and Severance Pay (Dismissal)

Employee decision 

 An employee has the right to terminate an employment contract concluded for an indefinite period, as well as a fixed-term employment contract before the expiration of its term, having warned the employer in writing.

Employer decision 

By agreement between the employee and the employer, the employment contract may be terminated before the expiration of the notice period.

Termination of employment by the employer is regulated very strictly in Uzbekistan and is under the control of local municipalities, civil courts and regional departments of the Ministry of Labor of Uzbekistan. Trade unions do also play a significant role, however, only in large-scale enterprises or enterprises where trade unions have been established.

It should be noted that employer is not allowed to terminate employment agreement unilaterally if the employee is on a sick-leave or other leave, except on the grounds of employer’s liquidation. Moreover, the Labor Code stipulates that the employer is not entitled to terminate employment agreement unilaterally with (except on the grounds of company liquidation):

  • A pregnant woman
  • A woman having child under 3-years old.

Please note that a woman on a parental leave is allowed to return to her work before expiry of her parental leave, and the employer is not allowed to terminate employment agreement with her even for gross violation of internal rules/policies until her child reaches 3-years old (except on the grounds of employer’s liquidation). However, in case of a gross violation, the employer is allowed to apply disciplinary penalty in the form of a reprimand or fine with respect to such woman.

In case of company liquidation, the employer shall arrange employment of above-mentioned women in other company(ies). Moreover, it does not matter:

  • What position woman has during her pregnancy.
  • If a woman had a temporary or permanent employment agreement. In case of a temporary agreement, it will be subject to automatic renewal until expiry of leave periods.

Mutual agreement 

An employment contract may be terminated by agreement of the parties. For this reason, all types of employment contracts may be terminated at any time;  As a rule, the termination of an employment contract by agreement of the parties is made out by an additional agreement to the employment contract signed by the employee and employer. The conditions under which the employment contract is terminated by agreement of the parties depend on the specific agreement between the employee and the employer.

# It is prohibited to dismiss

In order to dismiss a worker, an employer usually has to follow a set of legally mandated procedures, such as providing notice. Within the notification period, the employee shall be allowed not to come at work at least one day in a week in order to look for another job. Labor Code stipulates that the employer is not entitled to terminate employment agreement unilaterally with (except on the grounds of company liquidation):

  • A pregnant woman
  • A woman having child under 3-years old.

Priority Employees: the Labor Code contains concept of priority right to retain employment with certain categories of employees.  In particular, Labor Code specifies that in case of terminating employment agreement due to changes in technology or organisation of production and work, reduction of volume of work entailing changes in personnel (staff) or the nature of work, the priority right to retain employment shall be granted to employees with the highest qualifications and productivity.

# Notice period

Notice of dismissal should be made in writing by employers at least two months before dismissal in case of staff reduction or liquidation of the employer, or at least two weeks before dismissal in case when the employee does not meet the job requirements due to insufficient qualification or health condition. Notice of dismissal under a fixed-term contract must be provided within one week after the last day of the contract, otherwise, the contract will be regarded as having been confirmed and the appointment made permanent.

Employee should provide notice two weeks in advance. After the expiration of the warning period, the employee has the right to stop work, and the employer is obliged to issue the employee a workbook and provide compensation

# Severance payments

  • On the initiative of the employer, except for termination of the contract due to violation by the employee of his labor duties
  • In the circumstances beyond the control of the parties
  • In connection with the refusal of the employee to continue work in the new working conditions.

The size of the severance pay cannot be less than the average monthly earnings.

# Employee Benefits and Contributions

Mandatory benefits required by law to be provided by an employer 

Minimum paid annual vacation, sick leave, paid maternity leave, leave for statutory holidays, paternity leave, family bereavement leaves. 
Employers must make mandatory monthly contributions to individual accumulative pension accounts of local employees.

Non-mandatory benefits that are offered by an employer

Transportation allowance, housing, education allowance, performance-based bonuses.

# Probationary period

An employment agreement may establish a probation period that, in general, should not exceed three months.

# Overtime

Overtime work may be applied only with the consent of the employee. With a work shift of twelve hours, as well as in work with particularly difficult and particularly harmful working conditions, overtime work is not allowed. The duration of overtime work should not exceed 4 hours for each employee for two consecutive days (in hazardous and difficult working conditions – two hours a day) and 120 hours a year. 

For each hour of overtime work, an employee must be compensated at least at double of his/her normal hourly rate. At the request of the employee, overtime work may also be offset by the provision of time off at a rate commensurate with the number of overtime hours worked.

# Work hours

The normal working hours for an employee may not exceed 40 hours per week. With a 6-day work week, the duration of daily work may not exceed 7 hours, and with a 5-day work week, 8 hours.

# Annual Leave

Vacation is paid and cannot be less than 15 working days. Extra vacations can be granted by the employer in the employment agreement or other local documents.

Given the age and state of health, the annual basic extended leave is granted: 

  • Persons under the age of eighteen – thirty calendar days
  • Working disabled people of I and II groups – thirty calendar days.

For the period of annual leave, the employee is guaranteed payment in the amount not lower than the average earnings.

# Sick Leave

There is no limit for employee sick leave. The allowance for employee temporary disability (sick leave) is paid by the employer from its own funds. In case of prolonged illness, the employee is subject to a special medical expert commission which draws a conclusion regarding the employee’s ability to continue work.

Parental Leave

Maternity rights and leaves 

Women employees who have a baby are entitled to paid maternity leave for a period of 126 days. Maternity allowance is paid by the employer for the period of maternity leave (70+56=126 days) based on the employee’s wage. Childcare leave is then paid by the employer at the rate of 2 monthly minimum wages (MMW) for a period of two years. The employee may work part-time. In this case, she is paid her part-time wage plus the childcare allowance.

Paternity rights and leaves 

The entitlement to maternity leave also covers a father or tutor, grandmother, grandfather or other relatives who actually takes care of the child, in cases when the mother’s care for the child is absent (for example, in case of death or long stay in medical establishment).

Acumen International can help you fast-track your possibilities of entering and expanding your business in Uzbekistan 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.

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