Employer of Record Guide in Armenia
Navigating the hiring landscape in Armenia can be complex, but with the right insights, you can streamline your process. Discover how to compliantly hire top talent and manage your workforce effectively in this emerging tech hub.
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Armenia's growing economy offers access to skilled professionals across technology, finance, and renewable energy sectors. Understanding the local market dynamics and regulatory environment is essential for successful expansion into this strategic Caucasus region.
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Your EOR guide in Armenia
From payroll cycles to employment contracts, Armenia's labour framework has specific requirements that impact your hiring strategy. This comprehensive guide covers the essential compliance elements you need to build and manage your Armenian team successfully.
Minimum Wage
The national minimum wage in Armenia is AMD 75,000 per month, effective as of recent government updates. This applies to all employees regardless of sector or company size.
- Monthly Rate: AMD 75,000
- Coverage: All employees in Armenia
- Review Schedule: Subject to annual government review
Payroll Cycle
Armenian employers typically follow these payment schedules:
- Monthly: Most common, paid by the 15th of the following month
- Bi-weekly: Less common but permitted
- Semi-monthly: Allowed under labour agreements
Individual Income Tax
Armenia operates a flat income tax rate of 20% on all employment income. This simplified system applies to both residents and non-residents earning income in Armenia.
| Income Source | Tax Rate |
|---|---|
| Employment Income | 20% |
| Bonus Payments | 20% |
| Benefits in Kind | 20% |
Tax Residency Criteria
Individuals are considered Armenian tax residents if they:
- Spend 183 days or more in Armenia during a calendar year
- Have their centre of vital interests in Armenia
- Are Armenian citizens residing in Armenia
Tax residents pay Armenian income tax on worldwide income, while non-residents pay only on Armenian-source income.
Employer Payroll Contributions
Note: Research shows conflicting information regarding employer social security contributions. One source indicates 0% employer contributions, while another states 21%. Please verify current rates with Armenian tax authorities.
Based on available information, employers may be required to contribute to:
- Social security system
- Unemployment insurance
- Healthcare contributions
Working Hours
The standard working schedule in Armenia is:
- 40 hours per week
- 8 hours per day
- 5 working days (Monday through Friday)
Certain categories of employees may have reduced working hours:
- Employees under 18 years: 36 hours per week
- Employees in hazardous conditions: As specified by labour regulations
Overtime Pay
Overtime work is compensated at enhanced rates:
- First 2 hours: 1.5× regular hourly rate
- Beyond 2 hours: 2× regular hourly rate
- Annual Limit: Note: Research shows conflicting data - 120 vs 120-180 hours per year. Please verify current limits.
Overtime work requires employee consent and cannot exceed legal maximums.
Employment Classifications
Full-time Employment:
- 40 hours per week standard
- Entitled to full benefits and protections
Part-time Employment:
- Less than 40 hours per week
- Pro-rated benefits based on working hours
Fixed-term Contracts:
- Specific end date
- Same rights as permanent employees during contract period
Annual Leave
Armenian employees are entitled to paid annual leave:
- Minimum Entitlement: 20 working days per year
- Enhanced Entitlement: Up to 24 working days for certain categories
- Accrual: Earned proportionally throughout the year
- Payout: Unused leave must be paid upon termination
Note: Research shows slight variation in annual leave entitlements (20 vs 20-24 days). Please verify specific entitlements for different employee categories.
Sick Leave
Employees are entitled to paid sick leave when medically certified:
- Medical Certificate: Required from licensed physician
- Payment: Covered by social security system
- Duration: As medically necessary
- Employer Role: Continue employment relationship during sick leave
Maternity Leave
Female employees receive comprehensive maternity protection:
- Total Duration: 140 calendar days
- Pre-birth: 70 days before expected delivery
- Post-birth: 70 days after delivery
- Payment: Funded through social security system
- Job Protection: Position guaranteed upon return
Parental Leave
Additional parental leave options may be available:
- Childcare Leave: Extended unpaid leave for child-rearing
- Paternal Leave: Limited paternal leave provisions
- Adoption Leave: Similar protections for adoptive parents
Other Statutory Leave
Bereavement Leave:
- Short-term paid leave for immediate family deaths
- Duration varies based on relationship to deceased
Military Service:
- Mandatory military service leave for eligible citizens
- Job protection during service period
Termination Categories
Termination by Employer:
- With cause (serious misconduct)
- Without cause (economic reasons, restructuring)
- During probation period
Termination by Employee:
- Voluntary resignation
- Immediate termination for employer violations
Notice Period Requirements
Notice periods depend on the reason for termination and length of service:
| Termination Type | Notice Period |
|---|---|
| Employee Resignation | 2 weeks |
| Employer Termination (without cause) | 2 weeks to 2 months |
| Termination with Cause | No notice required |
| During Probation | Reduced notice (typically 3 days) |
Severance Pay
Severance payments may be required for certain terminations:
- Without Cause Termination: Compensation based on length of service
- Economic Redundancy: Enhanced severance provisions
- Calculation: Typically based on average monthly salary
Final Pay Requirements
Employers must provide final compensation including:
- Outstanding salary through last day worked
- Accrued but unused annual leave
- Any earned bonuses or commissions
- Timeline: Final pay must be provided promptly upon termination
Legal Protections
Employees are protected against discriminatory termination based on:
- Gender, race, religion, or nationality
- Pregnancy or family status
- Trade union membership
- Filing complaints against employer
National Holidays
Armenia observes several national holidays throughout the year:
| Holiday | Date | Type |
|---|---|---|
| New Year's Day | January 1-2 | Secular |
| Armenian Christmas | January 6 | Religious |
| Army Day | January 28 | National |
| International Women's Day | March 8 | International |
| Easter Monday | Varies | Religious |
| Genocide Remembrance Day | April 24 | Memorial |
| Victory Day | May 9 | Historical |
| First Republic Day | May 28 | National |
| Constitution Day | July 5 | National |
| Independence Day | September 21 | National |
| New Year's Eve | December 31 | Secular |
Holiday Pay Rules
Eligibility:
- All employees entitled to holiday pay
- Payment at regular daily rate
Working on Holidays:
- Double pay for work performed on public holidays
- Alternative day off may be provided instead
Religious Observances
Armenia's Christian heritage means religious holidays are officially recognised:
- Armenian Apostolic Church calendar followed
- Accommodation for minority religious observances
Required Documentation
Employment Contract:
- Written contract mandatory for all employees
- Must specify job duties, salary, working hours, and termination conditions
- Available in Armenian language
Government Forms:
- Tax registration with State Revenue Committee
- Social security registration
- Work permit (for foreign nationals)
Identity Verification:
- Armenian passport or ID card
- Foreign passport with valid visa/permit for non-citizens
Work Authorization
Armenian Citizens:
- No work authorization required
- Must provide valid identification
Foreign Nationals:
- Work permit required before employment
- Visa requirements vary by nationality
- Employer may need to sponsor work authorization
Language Requirements
- Official Language: Armenian
- Business Language: Armenian and Russian widely used
- Employment Contracts: Must be available in Armenian
- Workplace Communication: Armenian proficiency generally expected
Contractual Elements
Mandatory Contract Terms:
- Job title and description
- Salary and payment schedule
- Working hours and location
- Annual leave entitlement
- Notice periods for termination
Recommended Clauses:
- Intellectual property assignment
- Confidentiality agreements
- Non-compete provisions (if legally enforceable)
Probationary Periods
- Standard Duration: Up to 3 months
- Reduced Notice: Shorter termination notice during probation
- Full Rights: Employees retain most labour protections during probation
Worker Classification
Armenian labour law distinguishes between employees and independent contractors:
Employees:
- Subject to employer control and direction
- Entitled to labour law protections
- Employer withholds taxes and social contributions
Independent Contractors:
- Operate with autonomy
- Invoice for services
- Responsible for own tax obligations
- Limited labour law protections
Misclassification Risks:
- Penalties for incorrect classification
- Retroactive tax and social security obligations
- Employee rights may be enforced regardless of contract terms
Trade Unions & Collective Bargaining
- Right to Organise: Employees have the right to form and join trade unions
- Collective Agreements: May override individual employment terms
- Strike Rights: Legal strikes permitted under specific conditions
- Employer Obligations: Must negotiate in good faith with recognised unions
Cultural Considerations
Communication Style:
- Formal business relationships initially
- Personal relationships important for long-term success
- Respect for hierarchy and seniority
Work-Life Balance:
- Family obligations highly valued
- Extended lunch breaks common
- Flexible arrangements for family emergencies
Business Practices:
- Punctuality expected in formal settings
- Personal connections influence business decisions
- Hospitality and relationship-building important
Remote Work Framework
Remote work arrangements are increasingly accepted:
- Legal Framework: Employment law applies regardless of work location
- Equipment: Employer responsibilities for necessary tools
- Health & Safety: Employer duty of care extends to home offices
- Cross-border: Additional considerations for employees working from other countries
What Borderless AI Handles
When you hire through Borderless AI in Armenia, we manage:
- Local employment contract preparation
- Payroll processing and tax compliance
- Social security registration and contributions
- Government reporting and filings
- Local HR support and guidance
- Termination procedures and final settlements
Built-in benefits packages for Armenia
When the world is your competition, it pays to incentivize new hires and existing alike. Borderless AI benefits packages typically inlucde:
Medical Insurance
Dental Insurance
Retirement Contribution
Life Insurance
Vision Insurance
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