Baku:Azerbaijan is set to digitalize salary payments as part of a proposed amendment to the Labor Code. The initiative aims to ensure compliance with legislative requirements, monitor timely salary payments, and prevent informal employment by transferring salaries and other payments through an electronic system to bank accounts chosen by employees.
According to Azeri-Press news agency, the adoption of this legal act will enhance transparency in labor relations and ensure more effective protection of employees’ rights by providing information on salary transfers to the authority responsible for overseeing labor legislation. This system will facilitate better oversight of employers’ compliance with salary payments, making it easier to detect and eliminate violations such as payment delays or concealment.
The introduction of a monitoring mechanism will enable the authority responsible for state supervision of labor legislation to maintain transparency between employees and employers. This will support the timely identification of labor violations and assist in implementing appropriate measures, thereby contributing to improved enforcement of labor laws, safeguarding employees’ rights, and fostering sustainable labor market development.
Digitalization of wage payments will also reduce employers’ workload related to wage recording and calculations. Furthermore, the requirement for employers to submit declarations to tax authorities for income tax, social insurance, and other contributions will be replaced by monthly data submissions, strengthening state supervision over wage payments.
Additionally, measures against informal employment will be bolstered, ensuring the automatic transfer of mandatory social insurance contributions to personal accounts within the insurance pension system. The system will also support automatic calculations for average monthly salaries in specific cases and expand citizens’ access to their income history.