Employment and Labor Laws in Armenia: A Complete Guide for Employers (2026)

Armenia is becoming a popular destination for hiring in the South Caucasus as it offers low employment costs and a growing talent pool.

However, there is an important point to understand. Labor laws in Armenia strongly protect employees. If you start hiring without knowing the rules, you can face fines, legal disputes, or even be required to reinstate employees.

In this guide, we break down the key rules you need to know before hiring in Armenia.

What Are the Types of Employment Contracts in Armenia?

Armenian law allows two main types of employment contracts. Every contract must be in writing or signed electronically. Verbal agreements are not valid.

Open-Ended (Permanent) Contracts

This is the standard type of contract in Armenia. According to Armenian labor laws, permanent contracts are the default, and fixed-term contracts are used only in specific cases.

An open-ended contract has no end date. It continues until either the employer or employee legally ends it.

Each contract must clearly include key details such as job title, duties, salary, working hours, start date, probation terms if any, and termination rules. If any of these are missing, the contract is not properly set up.

Fixed-Term Contracts

Fixed-term contracts are allowed only when the work is temporary. This includes seasonal jobs, project-based work, replacing an employee on leave, or hiring a foreign worker based on a residence permit.

These contracts usually last up to one year and can be renewed. However, the total duration cannot go beyond three years. After that, the contract automatically becomes permanent, even if no one planned it.

Probation Period Rules

A probation period is optional, but it must be clearly written in the contract if used. The usual maximum is three months, although in some cases it can go up to six months.

During probation, either side can end the contract with three days’ notice and no severance. After probation ends, normal termination rules apply.

What Are the Obligations and Rights of Employers in Armenia?

Armenian labor law strongly protects employees. This comes from older Soviet-era rules that still influence the system today. For employers, this means the rules are clear, but you need to follow them carefully.

Your core obligations include:

• Give a written employment contract before or on the employee’s first working day
• Provide a safe and healthy workplace
• Pay at least the minimum wage, which is AMD 75,000 per month in 2025, with AMD 85,000 planned for 2026
• Withhold and pay employee income tax at a flat rate of 20%, plus pension contributions
• Register each new employee electronically with the State Revenue Committee
• Pay salaries through bank transfers if your company has 10 or more employees
• Provide all required leave, including annual leave, sick leave, maternity leave, and paternity leave 

Employers in Armenia also have certain rights. You can set internal company rules, assign work based on the employee’s job description, and apply disciplinary actions such as warnings or termination when needed. You can also require employees to keep business information confidential.

Armenian law doesn’t allow discrimination. This includes discrimination based on sex, race, religion, disability, age, political views, and other protected characteristics.

Key Employment Laws in Armenia for Employers

This is where the details matter most. Six areas make up the backbone of your compliance obligations, and each one carries real consequences if you get them wrong.

Working Hours, Rest, and Overtime

Articles 137 through 149 of the Labor Code govern working hours. Overtime beyond the weekly cap requires the employee's consent unless there is a genuine emergency. Reduced hours apply to young workers, night shift employees, and anyone working in hazardous conditions.

Holidays and Paid Non-Working Days

Armenia recognizes 12 paid public holidays each year:

1. January 1 & 2 - New Year
2. January 6 - Christmas
3. January 27 - Remembrance Day for Fallen Defenders
4. January 28 - Army Day
5. March 8 - Women's Day
6. April 24 - Genocide Commemoration
7. May 1 - Labor Day
8. May 9 - Victory and Peace Day
9. May 28 - Republic Day
10. July 5 - Constitution Day
11. September 21 - Independence Day
12. December 31 - New Year's Eve

Minimum Wage, Compensation, and Benefits

A few things that catch employers off guard: bonuses and supplementary pay do not count toward minimum wage compliance. There is NO mandatory 13th-month payment. 

There are also no mandatory employer-side taxes or contributions in Armenia. The employer simply pays the gross salary amount, and all deductions (income tax, pension, health insurance, military stamp duty) come from the employee's side, though the employer is responsible for withholding and remitting them. 

Salaries must be paid at least once per month and no later than the 15th of the following month.

Employee-side deductions you will need to handle:

Monthly payroll reports are due by the 20th of the following month through the State Revenue Committee's e-portal. Annual employer reports must be filed by April 20.

Workplace Health, Safety, and Compliance

Chapter 23 of the Labor Code (Articles 242 through 262) puts the safety burden squarely on the employer. You must provide personal protective equipment free of charge, post evacuation plans in visible locations, and register any occupational accidents or diseases. 

According to Gratanet, high-risk industries like construction and manufacturing must now appoint certified occupational health officers as of 2025. Biannual risk assessments and digital safety logs are also required.

Leave Entitlements

Firing or Laying Off

In Armenia, you cannot fire employees freely. At-will termination is not allowed. You must always have a legal reason to end an employment contract.

In general, termination falls into two categories.

• If the employee is at fault, such as misconduct, substance use at work, or repeated unapproved absence, the employer may end the contract without paying severance.
• If the reason is not the employee’s fault, such as company liquidation, redundancy, or long-term health issues, severance is usually required.

Notice periods depend on the situation. In serious misconduct cases, termination can be immediate. For layoffs and workforce reductions, notice can go up to two months.

We explain the full termination process in more detail in the section below.

How to Hire Employees in Armenia: Contracts, Onboarding, and Legal Steps

How to Hire Local Employees in Armenia

The process is straightforward, but every step is mandatory:

1. Draft and sign a written employment contract before or on the start date.
2. Collect identity documents and the employee's public service number.
3. Electronically notify the State Revenue Committee of the new hire.
4. Register the employee in your payroll system and begin withholding income tax (20%), healthcare insurance and stamp cost.
5. Walk the employee through company policies, safety protocols, and any internal regulations.

Two important legal points to keep in mind:

1. Work without a signed employment contract is not allowed. If someone starts working without a valid contract, it is considered illegal employment.
2. The start date in the contract matters. If the employee does not show up on that agreed date, the contract can be treated as invalid and cancelled. 

How to Hire Foreign Employees in Armenia

Foreign nationals need both a work permit and a Temporary Residence Card (TRC) before they start working. These are now issued as a single plastic card through the workpermit.am platform.

Who does NOT need a work permit:

• EAEU citizens (Russia, Belarus, Kazakhstan, Kyrgyzstan), though they still must register on workpermit.am
• Holders of permanent or special residency permits
• Executives and founders of companies with foreign investment
• Highly qualified IT, science, and agriculture specialists
• Foreign specialists at representative offices of foreign companies

Even if a work permit is not required, the employer must still process and submit the relevant documents through the system to confirm the exemption status before the employee can legally start working.

For everyone else, here is the process:

1. Employer registers on workpermit.am with the CEO's electronic signature
2. Post the vacancy and complete the labor market test (5 to 7 business days)
3. If no qualified Armenian candidates accept the role, apply for the work permit
4. Submit required documents (passport, Apostilled diplomas, AMD 25,000 fee)
5. Work permits and TRC are typically issued within approximately 40 calendar days, although special cases may take longer. At the end of the permit process, the employee must also complete address registration through the police department, which takes an additional 2 weeks. This registration is required in order to fully activate the employee in the system. Overall, the full end-to-end process usually takes around 10 to 12 weeks, depending on case complexity and administrative workload.

Worth noting: according to the November 2026 reforms, Armenia will significantly narrow the list of work permit exemptions. If you have foreign hires operating under current exemptions, review those arrangements before that deadline.

Termination of Employment in Armenia

Armenia's employment termination rules are among the most regulated in the region. You cannot fire someone just because you want to. Every dismissal needs a valid legal basis, proper documentation, and the right notice period.

Grounds for Termination

Non-fault grounds (severance required):

• Company liquidation or cessation of activity.
• Workforce reduction (redundancy).
• Long-term employee incapacity (more than 120 consecutive days or 180 days in 12 months).
• Employee failing to meet position requirements due to health or incompetence.
• Reinstatement of a previously dismissed employee to the same role.

Fault-based grounds (no severance; can be immediate):

• Repeated failure to perform duties without valid reason.
• Loss of trust (theft, fraud, disclosure of confidential information).
• Being at work under the influence of alcohol, drugs, or psychoactive substances.
• Full-day unauthorized absence.
• Gross violation of internal labor rules.

Before any fault-based termination, you must give the employee an opportunity to submit written explanations. The written dismissal decision must be issued within one month of discovering the violation and no later than six months after it occurred.

Notice Periods

Employers can skip the notice period by paying the equivalent salary for the full notice duration instead.

Severance Pay

Severance is paid on top of notice pay. Any unused annual leave must also be compensated at final settlement.

For mass layoffs (terminating more than 10% of your workforce, or at least 10 employees, within a 2-month period), you must notify the State Employment Service and employee representatives at least 2 months in advance.

Protected Employees

You cannot terminate (except in cases of liquidation or serious misconduct) employees who are on certified sick leave, annual vacation, maternity or paternity leave, or performing civic or public duties. Pregnant employees and nursing mothers receive additional protections.

What Are the Most Common Compliance Challenges for Employers?

Enforcement in Armenia has been tightening steadily, and these are the areas where foreign employers most frequently run into trouble:

1. Employee misclassification. A Yerevan tech startup was penalized after classifying 15 full-time developers as freelancers. Authorities looked at who controlled the schedules and tools, and reclassified the relationships as employment, triggering significant back-payments.
2. Payroll errors and late filing. Monthly reports are due by the 20th. Even small mistakes in income tax withholding or pension calculations can trigger audits, fines, and unwanted scrutiny.
3. Work-permit non-compliance. Hiring foreign workers without the right documentation costs AMD 50,000 to 150,000 per incident. That adds up fast if you have multiple international hires.
4. Wrongful termination. Courts can order full reinstatement plus back-pay for the entire forced downtime period. The October 2024 amendment to Article 265 modified some of these rules, but the risk remains significant.
5. Digital contract obligations. The December 2024 law (No. HO-525-N) now requires digital signing of employment contracts through the State Revenue Committee platform. Make sure your executives have valid Armenian electronic signatures.
6. Remote and hybrid work documentation. Since 2023, hybrid arrangements must be formally documented in writing. If you fail to do so, it will create compliance exposure, especially around scheduling flexibility.

How SaviorHire's EOR Services Simplify Hiring in Armenia

If you are reading through all of this thinking, "That is a lot to manage from abroad," you are not wrong. The good news is that you don’t need to set up a local entity in Armenia to hire there legally.

An Employer of Record (EOR) acts as the legal employer on your behalf, handling the entire compliance burden so you can focus on finding the right talent. Since 2025, Armenia has officially recognized EOR arrangements under its labor framework.

At SaviorHire, our EOR and payroll services cover everything from locally compliant employment contracts and payroll processing to benefits management, work permit support, and termination compliance. We handle the paperwork, the tax filings, and the regulatory details so you don’t have to worry about misclassifying a worker or missing a filing deadline.

Ready to build your team in Armenia? Get in touch with SaviorHire and let us handle compliance while you focus on growth.