Are they planning to implement hourly wages in Azerbaijan?

Recently in Azerbaijan, the possibility of transitioning to hourly wages is being increasingly discussed. How will this change the situation in the domestic employment market, and who will benefit more from the innovation - workers or employers?

The newspaper "Caspian" writes that discussions about changing the minimum wage system in Azerbaijan through the introduction of an hourly minimum wage seriously began last year. This was reflected in the 2024 roadmap for implementing improvements and communications in the relevant area, based on the World Bank Group's Business Ready report. By June 1 of this year, the Ministry of Labor and Social Protection of the Population should prepare appropriate proposals. Currently, consultations with various departments are underway on this matter. The details of the project have not yet been disclosed, but the public has been promised to be kept informed.

Towards international standards

In the foreseeable future, Azerbaijan plans to introduce about 200 amendments to the Labor Code. These concern the legislative establishment of the concept of "remote work," as well as issues related to equal pay for equal work, the introduction of an hourly payment system, and more.

It is believed that this transition is driven by the desire to adapt the national system of labor relations to modern requirements and international standards. However, while domestic experts are cautious in their assessments of this innovation, citizens are wondering what to expect from it - advantages or negatives.

The fact is that this form of payment operates in many countries around the world, particularly in the USA, where incomes vary depending on the state, profession, and other nuances. In the European Union, it averages just over 33 euros. Luxembourg has the best indicators among member countries - 55 euros per hour. What the minimum hourly wage will be in Azerbaijan is unknown, but economists believe that most likely, the tariff scale will be uniform, regardless of the region.

Economist Eldaniz Amirov believes that the innovation will not have a significant impact on the structure of wages, but employees whose employment will be regulated by hourly wages will have the opportunity to fairly demand compensation for overtime. This, by the way, has become a big problem for the Azerbaijani labor market. According to the Labor Contract, an employee works the required eight hours, but in reality - often all 12, and no one compensates for this. According to the expert, the new system, if it does not eradicate such facts, will at least reduce their number.

Convenient for part-time employment

Economist Asiman Guliyev, in turn, emphasizes that the introduction of this measure must be approached systematically and with proper preparation. Even now, similar calculations are used in some places in the country, particularly in higher education institutions.

- It is necessary to modernize labor relations taking into account modern realities. With the right approach, the introduction of a minimum hourly wage can reduce the amount of overtime and strengthen the principles of social justice. The monthly minimum wage is relevant for normal working hours, while hourly wages are especially convenient for areas involving part-time, seasonal employment, and project work. It can be applied, for example, in trade, catering, and agriculture. International experience shows that hourly minimum wages contribute to greater labor market flexibility, especially in the context of digitalization and new labor models. Among the advantages are also increased transparency of calculations, reduced motivation for "envelope" payments, growth of official employment, and increased income for vulnerable categories of the population, including youth, women, and students, - said the interviewee.

The expert believes that it is necessary to study the best practices of countries that have already made such a transition and consider all the pros and cons. For example, in Turkey, an hourly minimum is not officially established, but a calculated hourly rate is actively used: the monthly minimum wage is divided by the number of working hours. However, factors such as inflation and a significant level of informal employment make it difficult to monitor compliance with standards.

Interested parties

Jamaladdin Ismayilov, Vice President of the "Hidmet-ish" Trade Union Federation, expresses concern that the transition to an hourly system may be used by employers in their own interests.

- Such a system will even be