The hourly wage system, applied in a number of countries, remains a topic of discussion in Azerbaijan. Experts believe that if such a system is applied, the regulation of labor relations should be carried out on a legislative basis.
Speaking to Modern.az on the issue, Vugar Bayramov, a member of the Milli Majlis Committee on Economic Policy, Industry and Entrepreneurship, stated that in countries where hourly wages are applied, this mechanism is regulated by law:
“In countries that apply the hourly wage system, this is regulated by law and specific obligations are defined for the employer and the employee. This is no longer an issue determined by the parties among themselves. Labor relations are formed on the basis of the requirements defined by law.”
The deputy noted that one of the main issues is how the relations between the employee and the employer will be regulated:
“One of the main directions here is how labor relations are regulated and how the obligations of the employee and the employer are determined.”
Vugar Bayramov emphasized that even if the hourly wage system is applied, the tax payment mechanism does not change:
“Naturally, the tax here is calculated according to the salary. Although the salary is determined per hour, payment is usually made once or a maximum of twice a month. This model is also applied in world practice. In most cases, salaries are paid twice a month.”
According to the deputy, in developed countries, the payment interval can sometimes be agreed upon between the employee and the employer:
“In some cases, payment is made once a month, and this issue can be agreed upon between the parties. But the main point is that the tax is calculated according to the paid salary.”
He stated that although the calculation is hourly, a monthly salary amount is formed and taxation is carried out accordingly:
“Although the calculation of the salary is carried out per hour, ultimately a monthly salary amount is determined and the tax is calculated accordingly. This is also regulated by law and no changes occur in the payment of tax from the salary. The tax is levied on the budget according to the paid amount.”
