Employer of Record in Armenia

An Employer of Record (EOR) in Armenia legally employs your workers in that country. The EOR handles all local employment tasks. This includes payroll, taxes, benefits, and compliance with Armenian labor laws. You manage your employees' day-to-day work. An EOR like Rivermate (https://rivermate.com/employer-of-record) makes it simple to hire in Armenia without opening a local entity.

How an Employer of Record (EOR) Works in Armenia

Using an EOR in Armenia is a straightforward process. Here is how it typically works:

1. You Find the Talent. You recruit and select the candidate you want to hire in Armenia.
2. The EOR Hires the Employee. The EOR, as the legal employer, drafts a locally compliant employment contract. They hire the employee on your behalf under their Armenian business entity.
3. Onboarding is Handled. The EOR manages all the necessary paperwork for the new hire. This includes registering them for social security and taxes.
4. The EOR Manages HR. The EOR takes care of payroll, ensuring compliance with Armenian tax and labor regulations. They also administer statutory benefits.
5. You Manage Your Team. You direct your employee's daily tasks and responsibilities, just like any other team member.

Why use an Employer of Record in Armenia

An EOR simplifies your expansion into Armenia. It saves you the time and expense of setting up your own legal entity in the country. This allows you to enter the market and start operations much faster.

Here are some key reasons to use an EOR:

• Stay Compliant. Armenian labor laws can be complex. An EOR understands the local regulations to ensure you avoid legal issues.
• Save Time and Money. You avoid the costs and lengthy process of registering a business in Armenia.
• Focus on Growth. You can concentrate on your core business activities while the EOR handles HR and administrative tasks.
• Attract Top Talent. EORs can offer competitive benefits packages, helping you attract and retain the best employees in Armenia.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Armenia includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Armenia.

Hiring in Armenia is becoming more common for international companies. The country has a growing economy and a skilled workforce, especially in the technology sector. If you are looking to hire in Armenia, you need to understand the local labor laws. This guide will walk you through the key aspects of hiring in the country.

Employment contracts & must-have clauses

Written employment contracts are mandatory in Armenia. Verbal agreements are not legally recognized. Contracts should be in Armenian, and for foreign employees, it's good practice to provide a version in a language they understand.

There are two main types of employment contracts in Armenia:

• Indefinite-term contracts: These are the standard type of contract with no specified end date.
• Fixed-term contracts: These contracts are for a specific period and can only be used in certain situations, like for seasonal work or temporary projects.

Every employment contract must include the following clauses:

Probation periods

You can include a probation period in an employment contract. The maximum length of a probation period is three months. During this time, both you and the employee can terminate the contract with three days' written notice. It is important to note that you cannot use a probation period for employees under 18 years old.

Working hours & overtime

The standard work week in Armenia is 40 hours, with a maximum of 8 hours per day. Anything beyond these hours is considered overtime. The maximum amount of work, including overtime, cannot be more than 48 hours a week or 12 hours a day.

Overtime work must be paid at a higher rate. The law requires you to pay at least 150% of the employee's regular hourly wage for any overtime hours worked.

Public & regional holidays

Armenia has several official public holidays where employees are entitled to a paid day off.

Here is a list of the non-working public holidays in Armenia:

• New Year's Day: January 1-2
• Christmas Day: January 6
• Army Day: January 28
• International Women's Day: March 8
• Armenian Genocide Remembrance Day: April 24
• Labour Day: May 1
• Victory and Peace Day: May 9
• Republic Day: May 28
• Constitution Day: July 5
• Independence Day: September 21
• New Year's Eve: December 31

Hiring contractors in Armenia

You can also hire independent contractors in Armenia. This can be a flexible way to access specialized skills for specific projects. When you hire a contractor, you don't have the same obligations as you do with an employee, such as paying for benefits and withholding taxes.

However, you must be careful not to misclassify an employee as a contractor. If a court determines that a contractor is actually an employee, you could face penalties, including back taxes and fines. The main difference between an employee and a contractor is the level of control you have over their work. An employee works under your direct supervision, while a contractor works independently.

An Employer of Record (EOR) can help you mitigate the risk of misclassification. An EOR legally employs the worker on your behalf, ensuring compliance with all local labor laws. This allows you to work with talent in Armenia without needing to set up a local entity and worry about the complexities of employment regulations.

Understanding compensation and payroll in Armenia is straightforward. The system is designed to be clear for both employers and employees. A written employment contract is required by law, and it should detail all aspects of the job, including salary and working hours. These contracts must be in Armenian and use the local currency, the Armenian dram.

Payroll cycles & wage structure

In Armenia, you pay your employees on a monthly cycle. The exact pay date is usually specified in the employment contract. Salaries can vary a lot depending on the industry, the employee's role, and their experience level. For example, the IT sector often offers more competitive salaries.

Beyond the basic salary, you might offer bonuses or allowances. These can be tied to performance or given for holidays.

Overtime & minimums

The standard work week in Armenia is 40 hours, with an eight-hour workday. If an employee works beyond these hours, you must pay them overtime. The overtime rate is 150% of their regular hourly pay. There are limits to overtime. Employees cannot work more than four extra hours in a day or eight in a week.

As of January 1, 2024, the minimum monthly wage in Armenia is 85,000 AMD. All employers must pay at least this amount for a full-time position.

Employer taxes and contributions

Employers in Armenia are not subject to separate payroll taxes. Instead, your main responsibility is to withhold taxes and contributions from your employees' gross salaries.

Employee taxes and deductions

Employees in Armenia have several deductions taken from their gross salary. This includes a flat income tax, social security contributions, and a military stamp duty.

In Armenia, providing competitive benefits and understanding leave policies are key to attracting and keeping great talent. The local laws give employees a solid foundation of paid time off and social security. This guide breaks down what you need to know about benefits and leave in Armenia.

Statutory leave

Armenian law provides several types of leave for employees.

• Annual Leave Employees who work a five-day week get at least 20 working days of paid annual leave. If they work a six-day week, they get 24 days. An employee can take their full annual leave after working for 11 continuous months.
• Sick Leave Employees can take up to 120 consecutive days of sick leave. They can take a maximum of 140 days in a 12 month period. You must pay 80% of the employee's average monthly earnings for the first five days. After that, social security covers the pay.
• Maternity Leave Mothers get 140 days of paid maternity leave. This is typically 70 days before the birth and 70 days after. In case of complications, this extends to 155 days. For multiple births, it's 180 days.
• Paternity Leave Fathers can take five days of paid leave. They must use this within 30 days of the child's birth.
• Adoption Leave Parents who adopt a newborn get paid leave until the baby is 70 days old. If they adopt twins or more, the leave extends to 110 days.

Public holidays & regional holidays

Armenia has several national public holidays. Employees get paid time off for these days.

Typical supplemental benefits

Beyond the legal requirements, many companies offer extra benefits to stay competitive.

How an EOR can help with setting up benefits

Setting up a benefits plan in a new country can be complex. An Employer of Record (EOR) simplifies this process for you.

An EOR already has a legal entity in Armenia. This means you don't have to spend months setting one up yourself. They handle all the administrative work of managing benefits and payroll. This ensures you comply with all local labor laws.

An EOR can also help you create a competitive benefits package. They understand the local market and can advise on what supplemental benefits will attract top talent in Armenia. This allows you to focus on running your business while the EOR takes care of the details.

When an employment relationship ends in Armenia, you need to follow a specific process. Unlike some other countries, you can't terminate an employee "at will." You must have a valid legal reason, such as redundancy, misconduct, or other grounds recognized by Armenian labor law. It's important to document everything, including the reason for termination and any discussions you have with the employee. On the employee's last day, you must provide their final salary, payment for any unused vacation, and their updated work record book.

Notice periods

You must give employees written notice before termination. The length of the notice period depends on how long the employee has worked for your company.

Source: Papaya Global

In some cases, like a mass dismissal, you need to notify the State Employment Service and employee representatives two months in advance. If you prefer, you can pay an employee in lieu of notice, which means their employment ends immediately, and you pay them for the notice period they would have worked.

Severance pay

Whether an employee receives severance pay depends on the reason for their termination. For example, if the termination is due to company liquidation or a reduction in staff, the employee is entitled to severance. The amount is based on their length of service. In cases of redundancy, an employee may receive one month's severance pay.

How Rivermate handles compliant exits

When you partner with an Employer of Record like Rivermate, we manage the entire offboarding process for you. We make sure that every termination complies with Armenian labor law. Our team handles the necessary paperwork, calculates the correct notice period and any severance pay owed, and ensures all final payments are made on time. We guide you through each step to minimize legal risks and ensure a smooth and respectful exit for your employee.

Getting the right visas and work permits in Armenia is straightforward when you know the process. For foreign nationals, working in Armenia legally requires a work permit and a temporary residence card. The employer, or an Employer of Record (EOR), kicks off this process. Armenia has created a digital platform to make applications more efficient.

Employment visas & sponsorship realities

An Employer of Record can sponsor work permits for foreign employees in Armenia. This is a practical way to hire in the country without setting up your own local company. The EOR acts as the legal employer and manages all the necessary paperwork for work authorization.

Here are the key realities of visa and sponsorship in Armenia:

• No Quotas: Armenia does not currently have quotas for foreign workers. This makes the process more predictable.
• Labor Market Test: Before hiring a foreign national, the employer must show that no qualified Armenian citizens are available for the job. The Ministry of Labor and Social Affairs oversees this test.
• Exemptions: Some foreign workers may not need a work permit. This includes highly skilled specialists, business owners, and executives.
• Unified Permit: The work permit and temporary residence permit are part of a single process, which simplifies things.

An EOR can help you navigate these requirements. They handle the application process, making sure everything is compliant with Armenian law. This allows you to focus on your business goals.

Business travel compliance

For short-term business trips, many foreign nationals can enter Armenia without a visa for up to 180 days per year. However, it is important to understand what you can and cannot do during these visits.

Business travel is for activities that do not count as work. You are generally not allowed to earn money from an Armenian source during your trip.

Permitted activities for business visitors:

• Attending meetings and conferences
• Engaging in negotiations
• Exploring business opportunities
• Conducting site visits
• Purchasing goods or services

Activities that require a work permit:

• Any form of employment with a local company
• Receiving a salary from an Armenian entity
• Engaging in hands-on project work that goes beyond meetings

If your plans in Armenia involve more than the permitted business activities, you will need to get a work permit. Always check the latest regulations to ensure you are compliant.