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Azerbaijan prepares serious measures on harboring out-of-registration employment and wages

12 July 2012 10:57 (UTC +04:00)

To him, the Fund has seriously investigated this sphere and prepared proposals in connection with it. The proposals will be submitted to the President in the coming days. It is considered to make amendments to laws on Social insurance and Labour pensions, as well as other legislation acts.

Muslumov noted that the main change would cover application of minimum wage fund on spheres and changing the rule on distribution of compulsory state social insurance premium between employee and employer at current 25%: â€˜Compulsory state social insurance premium of employees with salary up to AZN 300 is proposed to be paid by employer. If our proposals are accepted, then the employer will be forced to pay 18% of premiums for employees with AZN 300-2,000 salary, another 7% will be paid by the employee. Those employees, who earn above AZN 2,000, will be pay 10% of the compulsory state social insurance premium, another 15% will be paid by employerâ€™.

Muslumov thinks that the application of this rule would encourage employers to pay much salary to the staff: â€˜Because as salary rises, the most part of the premium will be paid by the employeeâ€™.

The second direction of the proposals will be the application of minimum wage fund on spheres. According to this rule, if wage fund is lower that the minimum salary, then not the number presented by company, but minimum limit will be taken into account. Analogous experience is applied in Turkey, too.

Muslumov added that Azerbaijan intends to use Turkish practice in this sphere: â€˜During yesterdayâ€™s Cabinet meeting, President Ilham Aliyev gave serious orders in direction of elimination of out-of-registration employment in a short timeâ€™.