(MENAFN- AzerNews)
labor Landscape: Benefits Of Hourly Minimum Wage Image' Width='242' Height='268'/>
Ulviyya Shahin Read more
The monthly minimum wage may be replaced by an hourly minimumwage in Azerbaijan. This is reflected in the 2024 roadmap forimplementing improvements and communications in the relevant area,based on the World bank Group's Business Ready report. The Ministryof Labor and Social Protection has been instructed to prepare andsubmit appropriate proposals to replace the monthly minimum wagewith an hourly wage by July 1 of this year.
Head of the Innovative Economic Research Center of AzerbaijanTechnical University, professor, and economist Elshad Mammadovstated to Azernews that the implementation of thehourly minimum wage can give impetus in two directions, dependingon the formation of the wage fund in the country.
“On the one hand, this can contribute to the overall increase inwages. Because the implementation of the minimum hourly wageundoubtedly will impose new obligations on employers and this cangradually impact the increase in the wage fund. On the other hand,it is known that today in our country, as well as in this globalexperience, such tendencies and trends have formed that short-termemployment experiences are becoming widespread. In such cases,specific labor contracts can be concluded for the completion ofdaily or weekly tasks, and it is now obvious that the applicationof an hourly minimum wage, rather than monthly, is more effectiveand rational,” he said.
Being further optimistic, the expert also said that there isgreat confidence that this new application in the labour contractwill be more effective.
“Therefore, I believe that the implementation of theseapproaches can yield positive results. Let's not forget that inrecent years, as a result of the direct efforts of the country'sleadership, positive results have been achieved in ensuringtransparency in the field of social protection. This indicates thatwe have already achieved results in legalizing labor relations inthe employment process, and at the same time, positive steps suchas increasing the wage fund and raising the minimum wage have beentaken, yielding positive indicators. In this regard, I believe thatthe implementation of an hourly minimum wage can also provide anadditional impetus to these positive changes, and overall, I wouldevaluate this step positively,” the expert concluded.
Sahib Mammadov , head of the Citizen's LaborRights Protection League, initially noted that people misunderstandcertain positions.
“A misconception has arisen that when the hourly minimum wage isimplemented, individuals in the country will receive wagescorresponding to the number of hours worked. This is a completelyerroneous approach. Here, the discussion revolves around theminimum wage intended for unskilled workers as specified in theLabor Code. That is, whatever the minimum monthly wage can be foran unskilled worker, it is not possible to set this figure lower they want to convert that amount into hourly instead ofmonthly. This system exists in many countries around theworld.”
He mentioned that, however, when implementing this on an hourlybasis, certain issues arise that need to be addressed.
“For example, suppose the current amount is 345 manat, and whendivided into hours and days, a very small amount is obtained foreight hours a day over 22 days. Therefore, if a transition tohourly wages is considered, the amount should be increasedslightly. For instance, if the amount were three manats, themonthly salary would exceed 500 manats, meaning setting a paymentof three manats per hour would result in a small amount, especiallywhen converted into dollars. However, if the hourly wage systemwere adopted, the salary would exceed 500 manat. This significantlyincreases the minimum wage. The Ministry of Finance and theMinistry of Economy should provide their opinion on this matter,based on which the Ministry of Labor and Social Protection shouldprepare proposals and submit them to the government.”
According to him, this process will happen sooner or later.
“However, this is still at the proposal stage. It has bothnegative and positive aspects. This is a modern, implementedstandard. For example, there are European countries where thehourly wage is 11 euros, and there are even countries where it ishigher, exceeding 30 or 40 euros. This discussion pertains tounskilled workers.”
The expert said that however, the implementation of this has notyet occurred within the CIS.
“It seems that it also depends on the fact that when the amountis divided into hours, it appears to be a very small figure, whichis why they cannot transition to this system. However, in manyinitiatives and endeavors, we have played a pioneering role amongthe CIS countries. It is possible that this system could berealized in our country. In any case, certain proposals are beingprepared regarding this matter now. The Ministry of Labor andSocial Protection will present relevant proposals to thegovernment,” he concluded.
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