Global HR Compliance in Azerbaijan

Expanding into Azerbaijan offers strategic access to Eurasian markets, particularly in sectors like energy, logistics, and ICT. But entering the country without a solid grasp of employment law poses compliance risks. From payroll calculations to severance rules and social security contributions, employers must align with Azerbaijani labour legislation that is detailed and frequently updated.

If you’re planning to hire or already managing international or local talent in Azerbaijan, Acumen International can help you do so compliantly, without the burden of establishing a local entity. Our Global Employer of Record (EOR) solution provides a legally sound employment framework while allowing you to focus on business growth and local market entry.

Why Companies Hire in Azerbaijan

• Local presence to deliver or oversee services in energy, ICT, infrastructure, or donor-funded projects
• Operational efficiency through direct employment without entity incorporation
• Access to regional hubs and Eurasian market connections
• Talent acquisition in technical, legal, or specialised business roles
• Legal clarity to avoid misclassification and limit compliance exposure

Employment Contracts in Azerbaijan

All employment contracts in Azerbaijan must be in written form and are registered electronically via the Ministry of Labour’s digital system.

Types of Contracts

• Open-ended contracts: Default format if no specific term is stated.
• Fixed-term contracts: Allowed for up to 5 years, usually in cases such as:
  • Project-based or seasonal work
  • Temporary replacement for an absent employee
  • Instances where open-ended contracts are impractical or restricted by law

Employers may not switch an open-ended contract to a fixed-term one without mutual consent.

Probation Period

The probation period must be clearly stated in the contract and cannot exceed 3 months. Either party may terminate during probation with three days’ notice in writing.

Working Hours and Overtime

• Standard workweek: 40 hours over five or six days
• Reduced limits apply for specific jobs or vulnerable groups (e.g., minors, hazardous conditions)
• Overtime:
  • Requires employee consent
  • Paid at 1.5x for the first 2 hours, 2x thereafter
  • Cannot exceed 4 hours over two consecutive days.

Minimum Wage in Azerbaijan

As of January 2024, the national minimum wage in Azerbaijan is 345 Azerbaijani Manat (AZN) per month. This is a statutory baseline and applies across industries, though many formal-sector employers offer significantly higher salaries.

Statutory Leave Entitlements

Annual Leave

Minimum: 21 calendar days per year

Additional leave based on tenure with the same employer:

• 5–10 years: +2 days
• 10–15 years: +4 days
• 15+ years: +6 days

One leave period must be at least two consecutive weeks.

Sick Leave

First 14 days paid by employer.

Subsequent days covered by State Social Protection Fund upon submission of a medical certificate.

Parental Leave

Maternity leave

• 126 calendar days total (70 before birth, 56 after)
• 70 days postnatal for abnormal or multiple births
• Fully paid via state social insurance

Paternity Leave

• Up to 14 days unpaid.

Childcare Leave

• Available to single fathers or guardians until child reaches age 3
• Partially paid or unpaid depending on circumstances.

Termination and Severance

Notice Periods

• By employer (depending on length of service):
  • <1 year: 2 weeks
  • 1–5 years: 4 weeks
  • 5–10 years: 6 weeks
  • 10+ years: 9 weeks
• By employee:
  • Standard notice: 1 month
  • Immediate resignation allowed under certain circumstances (retirement, relocation, disability, etc.)

Severance Pay

When dismissal is due to redundancy or liquidation:

• <1 year: 1 month’s salary
• 1–5 years: 1.4x salary
• 5–10 years: 1.7x salary
• 10+ years: 2x salary

Other scenarios (e.g., military service, job no longer suitable due to health reasons) require payment of 2x the average monthly salary.

In the event of the employee’s death, the family is entitled to 3x average monthly salary as a one-time benefit.

Employee Benefits in Azerbaijan

Mandatory Benefits

• Paid annual leave
• Maternity and childcare leave
• Sick pay
• Public holidays (approximately 13 per year)
• Pension contributions
• Free or subsidised healthcare via mandatory insurance
• Funeral and hardship allowances

Voluntary/Non-Mandatory Benefits

• Private health insurance (often extended to family)
• Transport or meal allowances
• Annual performance bonuses
• Support for education or professional development
• Paid leave for weddings, relocation, or family emergencies (case-by-case).

How Acumen International Can Help You Hire in Azerbaijan

Direct Employment Without a Local Entity
Use our EOR service to legally employ your workforce in Azerbaijan without setting up a company or branch office.

Local Compliance, Centrally Managed
We take responsibility for employment contracts, registration, taxes, and payroll—ensuring full compliance with Azerbaijani labour laws.

Custom Support for Complex Hiring
We help structure roles that align with your global policies and local legislation — whether for fixed projects, regional representation, or hybrid setups.

Global Mobility Support
Our team assists with obtaining work permits and coordinating compliant immigration for expats and foreign specialists.

Access to the Global Payroll Calculator
Forecast total employment costs, including net salaries, social contributions, and employer taxes for Azerbaijani hires, useful for budgeting and scenario planning.

One Partner Across 190+ Countries
Simplify your global operations with a single partner that delivers legally sound employment solutions in every market where you hire.