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Hiring in Uzbekistan? Read on to find out the employment norms (like taxes, payroll and benefits) and EOR (Employer on Record) norms in Uzbekistan.
Employment Norms in Uzbekistan
Uzbekistan is a country located in Central Asia. In the past few decades, the country has made many changes in labor reforms and business norms making them friendlier for employees and businesses. Understanding and adapting to these norms may prove challenging to companies looking to expand there
EOR services bridge this gap by helping potential employers with employee payroll, taxes, benefits, etc., and ensuring legal compliance.
General Information:
- The currency of Uzbekistan is Uzbekistani Som (UZS).
- Tashkent is the capital of Uzbekistan.
- Uzbek is the official language of Uzbekistan. Documentation can be in Uzbek to be considered legally valid.
- As of 2021, the GDP of Uzbekistan was reported to be USD 69.24 billion.
The Ministry of Employment and Labor Relations of the Republic of Uzbekistan frames employment norms. Collective agreements are also responsible for setting certain fair norms for employees.
Table of Contents
- Agreements
- Onboarding Process
- Visa
- Minimum Wage
- Payroll Cycle
- Annual Bonus
- Health Benefits
- Working hours and overtime
- Leaves
- Social Security
- Taxes for Employers
- Taxes for Employees
- Probation
- Termination
- Severance Pay
- Employees or Contractors
- Final Words
AgreementsOnboarding ProcessVisaMinimum WagePayroll CycleAnnual BonusHealth BenefitsWorking hours and overtimeLeavesSocial SecurityTaxes for EmployersTaxes for EmployeesProbationTerminationSeverance PayEmployees or ContractorsFinal Words
Agreements
- Contracts and agreements can be written or verbal. However, a written contract or agreement is always preferred.
- Collective bargaining agreements can be used by employees such that they come under the same industry and scope of work.
- The agreements should include work to be performed, compensation in Uzbekistani Som (UZS), benefits, termination clauses, working hours, etc.
- Contracts and agreements must be in Uzbek for legal work. If written in another language, a copy translated to Uzbek must be included.
Onboarding Process
- Employment contracts and agreements have to be uploaded in Uzbekistan's Single National System of Work. It is mandatory to include any monetary compensation in Uzbekistani Som (UZS).
- Employees have to sign the agreements before beginning work.
- Training may be provided for new employees.
- New employees should be enrolled with relevant government entities like social security.
Visa
Work visa:
- Employees who have secured a job in Uzbekistan require an e-visa.
- In addition to a work visa, foreign employees also require a work permit from the Ministry of Labor in Uzbekistan. The visa is valid as long as the work permit is valid. Permits are valid from 3 months to one year and can be renewed indefinitely as per the local norms.
- The following are some of the requirements for obtaining this visa.
- Passport (with a validity of at least 3 months)
- Employment contract (the company should be based in Uzbekistan)
- Work history proof (reference letters from former employers)
- Accommodation proof (valid copy of residence lease in Uzbekistan)
- Other requisite application documents
- The employer should obtain a Corporate Work License before the foreign employee can apply for a work visa.
- Employers must prove that the job has to be given to a foreign national because there aren't any eligible local job seekers for that job.
Business visa:
For business purposes, a B-2 business visa is required that is valid for 90 days. The applicant can stay for up to 30 days from the time of arrival. The following are the requirement for a business visa in Uzbekistan.
- Passport with a six-month validity from the date of arrival.
- Confirmed round-trip flight tickets
- Invitation letter from a valid company in Uzbekistan
- Proof of required finances
- Proof of valid reason for travel to the country
- Clean criminal record (may be required for some nationals)
- Health insurance (may be required)
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Minimum Wage
The minimum wage in Uzbekistan is UZS 920,000.00 per month. This was implemented in 2022.
Payroll Cycle
The payroll cycle in Uzbekistan is usually monthly.
Annual Bonus
There is no mandatory annual bonus in Uzbekistan. However, bonuses can be negotiated in employee agreements.
Health Benefits
Some health benefits are included in the mandatory social security of Uzbekistan. They are -
- Maternity benefits
- Sickness (for certain cases)
- Disability (up to a certain limit)
- Old age
For certain other benefits, private health insurance may be required. Employers can choose to provide their employees with these benefits.
Working hours and overtime
- Work-hours:A typical work week in Uzbekistan consists of 40 working hours distributed over 5 or 6 work days. For certain dangerous sectors, working hours are reduced.
- Break: Usually, a lunch break of 30 minutes to 1 hour is given.
- Overtime: Overtime rates are decided in the collective agreements. In most cases, the rate is 200% of the daily wage. Only a certain number of hours of overtime work are permitted per week as per the industry.
Leaves
Sick Leave
Employees can receive paid sick leave (60 to 80% of wages). They must produce a valid medical certificate to avail of sick leaves. Employees can also apply for sick leave to care for an ill family member.
Parental Leave
- Maternity leave: In Uzbekistan, female employees receive up to 126 days of paid (100% pay) maternity leave. Of this, 70 days are to be taken before the birth and 56 days after. The employee is compensated through social security benefits.
- There are no provisions for paternity leave or any other parental leaves.
- Adoption leave: An employee who has adopted a child can avail of a paid leave of up to 56 days from the date of adoption. If multiple children are adopted, the leave can be for up to 70 days.
Annual Leaves
Employees are entitled to a paid annual leave of 15 days. Employees should have worked for at least 6 months to avail of this leave.
Public Holidays (for the Calendar year 2023)
The following are the public holidays for the year 2023. Some dates may change according to traditional calendars.
- New Year's Day (January 1)
- Defenders of the Motherland Day (January 14)
- International Women's Day (March 8)
- Nowruz (March 21)
- Eid al-Fitr (April 21)
- Remembrance Day (May 9)
- Eid al-Adha (June 28)
- Independence Day (September 1)
- Teachers' Day (October 1)
- Constitution Day (December 8)
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Taxes for Employers
Employers pay around 12.10% of employees' salaries as social tax. Listed below is the social security tax breakdown for employers.
- Social security - usually 12% of the employee's salary
- Social tax - varies from 4.7% to 25% depending on the industry and organization type
- Pension - 0.1%
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Taxes for Employees
Income tax: Employees have to pay a flat rate of 12% of their salary as income tax.
Social Security tax: Employees pay around 6% of their salary as social security tax. The breakdown is as follows.
- Social security - 0% (as of 2022, employees do not have to pay any social security tax)
- Unemployment insurance - 0.5% (applies for certain industries)
- Housing Loan Regime - 1% (applies for certain industries)
- Employee training contribution (INCES) - 0.5% (applies for certain industries)
Probation
The probation period in Uzbekistan can be up to 3 months.
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Termination
- Termination can be due to various reasons such as - redundancy, bad performance, end of the contract, etc. An applicable notice period should be provided.
- Employers have to obtain approval from trade unions for unionized employees.
- The notice periods for different reasons for dismissal are as follows -
- Job redundant - 2 months
- Qualification not met or health issues rendering employee unfit for the job - 2 weeks
- Misconduct or bad performance - 3 days
- Employers can choose to pay the notice period wages and dismiss the employee immediately.
- Disabled employees cannot be dismissed without approval from the Employee Insurance Agency (EIA). The same applies to termination due to economic constraints.
Severance Pay
In Uzbekistan, severance pay is calculated as one month's salary for two years of work.
Employees or Contractors
- Employees and contractors are treated as different entities in Uzbekistan.
- Misclassification of the two would result in penalties to the employer.
Final Words
Uzbekistan is an emerging economy located in Central Asia. The country's proximity to Europe makes it a good destination for business expansion. EOR services help potential employers in employee management allowing businesses to focus on their goals.
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