Uzbekistan is a nation in Central Asia located in the North of Afghanistan and Turkmenistan. Uzbekistan is a developing country with a GDP of 80 billion dollars as of 2023. The current rank of Uzbekistan in the significant economy is 74th. By looking at the purchasing power of the parties in Uzbekistan, the country ranks 128th in the list of wealthiest countries in the world.
Uzbekistan is famous for its dominance in heavy industries and metallurgy. Uzbekistan is one of the greatest producers of heavy machinery and equipment. Also, the textile industries are ever-growing and one of the major employment areas.
Entrepreneurs setting up companies in Uzbekistan must comply with the nation’s employment and labor rules and regulations. Refer to this guide to learn about the labor code in Uzbekistan while setting up a business. It will allow business owners to hire and draft employment contracts effectively.
Applicability of the Act
The applicability and action of the labor code of Uzbekistan extend to the whole territory of the Republic of Uzbekistan. The mentioned act protects all employers and employees. The Employment Act of Uzbekistan protects the interest of both the employees and the employers. It provides employees with safe and healthy working conditions, adequate payment, sufficient rest periods, and many other benefits.
Uzbekistan is liberal about the type of employment contract an employer wants to incorporate into an organization. There are majorly two types of employment contracts in Uzbekistan that are classified as follows:
Indefinite duration contract
As per the employment law Uzbekistan guide, employers mainly use indefinite duration contracts to hire employees. Indefinite-duration contracts allow employees to work longer; employers generally hire permanent employees through this type of contract.
These contracts do not come with an expiration period. Terminating an indefinite-duration contract is entirely at the discretion of the employer are the employee or the mutual consent of the employer and employee.
Temporary duration contracts
Temporary duration contracts are the ones that incorporate a starting date and the date of the employment period. Temporary duration contracts automatically expire after the end date.
Employers use temporary duration contracts to hire temporary workers, primarily to fulfill the additional workforce required for a short period, seasonal jobs, temporarily replacing someone, etc. Companies must exclusively mention the term of employment in the employment contract.
Key Provisions of the Act
Employers in Uzbekistan need to have a sound understanding of the key provisions of its employment and labor laws. Here is a list of all the essential provisions of the labor code of Uzbekistan:
Minimum age of employment
The minimum age of employment or work in Uzbekistan is 15 years, and in some cases, it is 14 years. It is per international standards and the 138th ILO convention held in 2009, which Uzbekistan ratified. However, individuals below 18 years of age require the written consent of either parents or parents in loco parentis.
As per the labor code of Uzbekistan, an employee’s regular work hours are 40 hours weekly. An employee can only work up to 7 hours a day if the particular employee has six working days in a week. At the same time, the daily working hours for an employee working five days a week can be up to 8 hours.
However, the Employment Act of Uzbekistan states that the duration of daily work is reduced by an hour on the day before the non-working day of an employee. Hence, if a worker has a holiday on Sunday, that worker will enjoy one reduced hour of work on Saturday.
Any work done over an employee’s working hours is considered overtime work that must be payable apart from the employee’s basic salary. As per the working hours in Uzbekistan labor laws, the percentage of overtime pay is 200% of an employee’s basic pay.
The employment contract or agreement prescribes the overtime rate per the Uzbekistan working hours law. Any work done beyond 40 hours a week is overtime work. The overtime work of a worker can be at most 120 hours per year.
According to the new minimum wage rule in Uzbekistan that came into force on 1st June 2022, the minimum wage is UZS920,000.00 per month. The Government of Uzbekistan regulates the minimum wage.
Uzbekistan labor law has a provision for annual leave. All the employees working in Uzbekistan, whether full-time or part-time, receive annual paid leave, per the labor code in Uzbekistan. Employees can avail of the annual leave for at least 15 working days.
Furthermore, employers must extend the annual leave to 30 working days for employees with disabilities and workers who are under 18 years of age. The labor act rules in Uzbekistan grant annual leave only after six months of employment.
The Employment Act Uzbekistan guide allows employers to grant sick leaves to their employees. Employees can receive sick leave for 30 calendar days. The State Social Insurance Fund pays sick leave compensation, which is around 60% to 80% of the employee’s average income.
The compensation for sick leave may vary based on the seriousness of the sickness, recovery period, length of service, etc. If a worker has sustained an injury during employment, the company must provide 100% compensation during sick leave. The employee availing of sick leave has to submit a medical certificate as proof of the illness.
The labor code in Uzbekistan provides the clause of parental leave only to the guardian or parents of a child who is less than 16 years of age and has some disability. Such a guardian or parent gets an additional paid leave, and the State Social Insurance provides the pay for the parental leave.
It can also be known as shared paternity leave in Uzbekistan as both the mother and the father may take it. A further annual paid leave of at least three working days is given to women with two or more children under the age of 12 or a disabled child under the age of 16.
In Uzbekistan, paid maternity leave is mandatory for women employees. Maternity leave can be taken by a pregnant female employee 70 days before childbirth and 56 days after. When an employee gives birth to twin babies, she can take up to 70 days leave after childbirth.
The maternity leave in Uzbekistan for foreigners is the same as for citizens.
However, the female employee has to fill out a maternity leave form in Uzbekistan to avail of the maternity leave. After the period of maternity leaves expires, the female employee can ask for regular leaves for child care until the child reaches two years of age. Social service insurance is responsible for paying the benefits.
Uzbekistan labor laws provide the benefit of adoption leave to the parents who have adopted or acquired guardianship of newborn children. The adoption leave period is 56 days from the date of adoption or establishing guardianship. During unemployment, the State Social insurance compensates employees.
The Employment Act of Uzbekistan grants sabbaticals to employees who combine industrial activities with scientific work and preserve their average monthly salary in their primary place of work. The creative leave is only granted to employees responsible for writing textbooks, preparing teaching aids, doctoral dissertations, and so on.
Employees pursuing higher studies or specialized education while working have the advantage of availing of education leave. Employers have to preserve the average monthly wage of such employees until the worker’s examination or laboratory presentation is over. The education leave may be paid or unpaid as specified in the employment contract.
Employees in Uzbekistan can be granted unpaid leaves in particular circumstances. However, such leave can be up to 3 months a year. Leave without pay can be granted to the employees in the following situations:
Employees with disabilities
Up to 14 calendar days
1941 to 1945 war participants
Up to 14 calendar days
Female employees for the purpose of child care where the child is of 2 to 3 years of age
Specified by the employment contract or at the discretion of the employer
In cases regulated by the legislative body or specified by the employment contract
As directed by the legislative body or mentioned in the contract
Some employment contracts come with a probation period. The Employment Act of Uzbekistan mentions the probation period exclusively in the employment contract. However, the probation period cannot exceed three months under any circumstances.
Termination of contract
As per the labor code in Uzbekistan, the employee and the employer, with mutual consent, have the authority to terminate the employment contract before expiration. However, employees must serve a notice period. The term of the notice period according to the term of employment can be categorized as follows:
Reasons for termination
Length of notice
Inability to perform assigned work because of medical reasons or lack of ability
Change in the ownership of the organization
Severe miss conduct
The severance pay for an employee shall equal one month’s salary for every two years of service in a company.
According to the Uzbekistan labor laws, if it is explicitly stated in the employment contract the consequences of breaching the contract then it shall follow what is drafted.
Otherwise, the following penalties may take place upon the employer in accordance with the labor code of Uzbekistan:
- In case of the death of the employee, while performing the employment duties, the guardian of such employee is entitled to monetary and moral compensation.
- If the employee is illegally deprived by the employer, then the employer is liable to pay damages along with unpaid wages.
- if an employee gets injured or disabled at work, the employer is liable to pay full compensation for the treatment of such employee and pay damages for the cause of such injury.
Compliance Strategies for Employers
The Uzbekistan labor laws are easy and simple to follow for both citizens and non-citizens. There are multiple strategies that help companies to comply with the labor regulations in Uzbekistan.
Hiring foreign workforce can be easier for employers in Uzbekistan because of the following compliance strategies:
In house HR
- An employer can appoint an internal HR team to assist in hiring potential business professionals adhering to Uzbekistan labor laws.
- In-house HR deals with issues related to employee payment, different types of leaves, working hours, etc in accordance with the labor regulations in Uzbekistan.
- Organizations having a larger budget builds an in-house HR team to meet the aforementioned demands.
Third-party HR agency
- There are multiple HR agencies that can assist several companies to comply with the labor laws of Uzbekistan.
- The functions of an outsourced HR agency are very similar to that of the in-house HR force of a company.
- The cost of outsourcing from a specialized HR staff is far less than retaining an in-house HR because of relationships with numerous other businesses
Employer of Records
- EOR stands for Employer of Records is a convenient neo-compliance strategy best suited for international businesses.
- EOR solutions are one of the most affordable and convenient options for large, medium, and small-scale businesses.
- EOR solutions allow employers to do away with the need of appointing an in-house HR team that requires a big budget. It helps companies to adhere to the labor act rules of Uzbekistan on a tight budget.
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