AZE.US
Azerbaijan’s updated rules for calculating paid annual leave are expected to protect workers from receiving lower vacation payments after a salary increase or temporary reduction in wages.
The change took effect at the beginning of this year.
Under Article 111 of Azerbaijan’s Labor Code, the amount calculated for the period of annual leave based on average wages must not be lower than the employee’s latest salary.
In practical terms, this means the salary stated in the employment contract at the time the employee goes on leave must be taken into account.
Previously, vacation pay was calculated based on the employee’s average salary over the previous 12 months. If the worker earned less during some of those months, the final leave payment could be lower than their current salary level.
The new rule is designed to prevent that.
If a salary reduction occurred during the previous 12 months through no fault of the employee, it should not reduce the amount paid for annual leave.
Specialists say the change is particularly important for employees who received a salary increase during the past year. Under the previous system, older and lower monthly wages were still included in the average, which could reduce the final amount.
The basic calculation formula has not changed.
The employee’s total salary for the previous 12 months is divided by 12, then by the fixed coefficient of 30.4. That produces the amount payable for one day of leave. The figure is then multiplied by the number of leave days requested by the employee.
The difference is that the calculated amount is now compared with the employee’s current salary level.
If the old average-based formula produces a lower result, the more favorable amount for the employee should apply.
In effect, the new rule creates a safeguard: vacation pay should not fall below the employee’s current wage level.
Specialists also note that the right to annual labor leave begins from the first day of employment. However, the right to use that leave generally arises after 6 months of work with the same employer.
Once that period is completed, the employee may apply to the employer for annual leave. If the employee has worked for more than 6 months, the employer must provide the leave in line with labor rules.
The updated payment rules are already in force and apply to workers planning to take annual leave now.
AZE.US