Armenia is one of the world’s oldest countries, whose capital was established before Rome. The country is home to several ancient historical sites (including some of the oldest churches in the world).

There are no employer taxes in Armenia, and labor laws provide considerable protections for workers in the country. Their primary industries include manufacturing, textiles, mining, and agriculture.

Types of Contracts

In Armenia, the following contract types are available:

• Fixed-term contracts
• Indefinite contracts

Part-time contracts can also be arranged.

Fixed-term contracts cover specific periods, or a defined project, and are typically 1 year in duration. Contracts can be renewed after the initial term, but are subject to a 3-year maximum, beyond which the contract automatically converts to an indefinite contract.

Note: EU Citizens who do not possess an Armenian work permit are eligible for a 1-year fixed-term contract initially; to extend the contract beyond this the employee must apply for an Armenian work permit.

Job Title Restrictions

Hiring Vice Presidents (VP) and C-Level Executives in Armenia under the Employer of Record (EOR) model may present challenges.

Working Hours

The standard working hours in Armenia are 8 hours per day and 40 hours per week.

Overtime

The maximum allowable working time, including overtime, should not exceed 12 hours per day (48 hours per week), inclusive of breaks. Overtime work in Armenia is compensated at a rate of 150% of the standard hourly rate for each hour worked beyond the regular 8-hour workday or 40-hour workweek.

For employees working during nighttime hours, compensation is calculated at 130% of the standard hourly rate for each hour of night work.

Managers are exempt from overtime limitations and are not entitled to additional salary for overtime work.

Minimum Wage

In 2024, Armenia’s national monthly minimum wage is AMD 75,000, while the minimum hourly wage is AMD 500. Additionally, individuals working in hazardous environments receive a premium above their average salary.

Probation Period

The duration of the probation period should not be more than three months, except for certain cases established by law that can set the maximum time period of six months.

If either the employee or the employer intends to terminate the employment contract before the three-month probation period, they can do so by providing three days' notice.

Taxes & Local Employment Costs

Employee Taxes

Employees in Armenia pay income tax at a flat rate of 20%. The employee is required to make pay social security contributions according to the following guidelines:

• Pension Fund (gross income under AMD 500,000) - 5%
• Pension Fund (gross income between AMD 500,000 and AMD 1,125,000) - 10%

Employer Taxes & Contributions

There are no mandatory taxes and contributions for employers in Armenia.

Annual Leave (Vacation)

Employees in Armenia working 5 days a week are entitled to 20 working days of annual leave. This entitlement increases to 24 days for employees who work a 6 day week. This entitlement may increase to 35 and 42 days for employees working in exceptionally stressful or high-risk conditions.

The annual leave cycle in Armenia is based on the individual employee’s start date, rather than a fixed calendar month (e.g., January to December). Employers are allowed to implement a carryover policy for unused annual leave, ensuring that employees can utilize accrued leave time effectively.

Generally, employees become eligible to access their annual leave after completing 6 months of continuous work with the employer.

Sick Leave

In case of illness or injury, employees are entitled to sick leave with full pay for up to 120 days. The first 5 days are paid by the employer; any subsequent days are paid for by the government.

If the employee has not reported to work for more than 120 days in a row, or more than 140 days within a 12-month period, the employer has the right to terminate the contract, except for certain excluded illnesses or disabilities.

Maternity Leave

Employers are required to provide paid maternity pay at a rate equivalent to 100% of the employee's average monthly earnings over the previous 12 months divided by 30.4 days (average number of days in a month), regardless of the duration of covered employment.

Maternity leave entitlements in Armenia are as follows:

• Standard Maternity Leave - 140 days (70 days during pregnancy, 70 days post-birth)
• Maternity Leave for Complicated Birth - 155 days (70 days during pregnancy, 85 days post-birth)
• Maternity Leave for Multiple Births - 180 days (70 days during pregnancy, 110 days post-birth)

Paternity Leave

Fathers are eligible for 5 working days of paid paternity leave, which must be utilized within 30 days following the birth of the child.

Adoption Leave

Employees who have adopted a newborn, been appointed guardian of a newborn, or had a child through a surrogate are entitled to leave from the day of adoption or appointment until the infant reaches 70 days of age. In cases of adopting or being appointed guardian of two or more newborns, the leave extends until the newborns reach 110 days of age.

Bereavement Leave

Employees are entitled to 3 days of unpaid leave to attend the funeral of a family member.

Marriage Leave

Employees are entitled to 3 days of unpaid leave for their marriage.

Public Holidays

The following public holidays are observed in Armenia:

• New Year’s Holiday - January 1-4
• Armenian Christmas Holiday - Moveable, 2 days in early January
• National Army Day - January 28
• International Women's Day - March 8
• Easter Monday - Moveable
• Armenian Genocide Remembrance Day - April 24
• Labor Day - May 1
• Victory and Peace Day - May 9
• 1st Republic Day - May 28
• Constitution Day - July 5
• Independence Day - September 21
• New Year's Eve - December 31

Termination Process

Only terminations for one of the reasons outlined in Armenian labour laws are acceptable. These reasons include the employee’s inability to perform the duties of the role, contract expiration, unexcused absences, etc. The reasoning for the termination should be provided to the employee in writing.

Notice Period

During Probation

If either the employee or the employer intends to terminate the employment contract before the three-month probation period, they can do so by providing three days' notice.

Post Probation

If an employee is deemed unfit for work, experiences prolonged incapacity to perform their duties, or reaches the age of retirement, the employer has the right to terminate an indefinite employment contract, providing notice as per the following criteria based on their length of service:

• Less than 3 years - 2 months' notice
• 3-10 years - 3 months' notice
• 10+ years - 4 months' notice

Note: Employees in more senior positions, such as VP/Head, have a standard notice period of 3 months. The employer and employee may mutually agree upon a shorter notice period. Payment in lieu of notice is an option.

Statutory Payments

If an employee is terminated without severe cause, including by mutual agreement, they are entitled to a severance payment equal to 3 months’ salary. Any unused annual leave should be paid out to the employee in their final paycheck, which should be paid on the final day of employment.

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