Key Factors to Consider When Employing in Mongolia:
There are several key areas to be aware of within Mongolia’s employment regulatory framework, especially for companies that plan to initiate a full local office and human resources department. These challenges can be mitigated by use of a locally sourced payroll provider who is familiar with all of the local laws and rules for both local employees as well as foreign nationals.
Labour contracts must contain the following basic conditions, at a minimum:
- The name or title of the position of employment
- Duties and work to performed
- Amount of basic salary or salary of the position
- Working conditions
Parties are forbidden from independently changing the conditions stipulated within a labour contract. Both parties must have agreed upon terms, otherwise the contract is considered invalid.
Disclosure and Confidentiality of Personal Information
There is no such specification in the Labour Law, however there is a prohibition on asking questions related to private life, personal opinion, marital status, political party membership, religious beliefs, or pregnancy if irrelevant to the employment.
Employee Protection and Anti-discrimination Rights
The establishment of discrimination, limitation, or privilege based on nationality, race, sex, social origin or status, wealth, religion, or point of view is prohibited.
Time Off Work
Generally, the annual leave entitlement is 15 days, or 20 days if the employee is under 18 years of age. There may be additional leave days awarded on the basis of the tenure of employment ranging from 3 days to 14 days, depending on the length of employment.
If an employee contracts a normal disease of domestic injury and therefore rendered unable to perform their duties, as determined by a competent medical authority, then they are entitled to sick leave for the duration of such temporary inability.
Annual Leave Accrual Entitlement
The basic annual leave entitlement is 15 days, or 20 days if the employee is under 18 years of age. There may be additional leave days awarded on the basis of the tenure of employment ranging from 3 days to 14 days, depending on the length of employment.
Maternity Leave in Mongolia
Female employees are entitled to 120 days of maternity leave. Adoptive mothers are entitled to the same leave period.
Resignation / End of Service Payment
There is no specified resignation or end of service payment.
Severance / Redundancy Pay
The employer is entitled to pay an allowance equal to an average wage of one month or more.
Termination of Employment
A labor contract can be terminated upon initiation by either the employee or the employer. Unless otherwise stated in the contract, employees are able to leave their position after 30 days of giving notice.
Grounds for terminating employment include:
- Mutual agreement by the parties to do so
- If the employer or employee has died
- If the labour contract has expired and both parties have decided not to extend the contract
- If a legal authority has so demanded
- If an unjustifiably dismissed employee has been reinstated o their previous position
- If an employee has been enlisted for army service
- If a court decision prevents an employee from performing their work duties as a result of a criminal offence
Employers who terminate a labour contract with an employee must establish a time for the transfer of duties to the new employee and provide this information when dismissing the original employee. Employers are obliged to provide the dismissed employee with the decision on the dismissal, any legally required dismissal allowances, as well as a letter of reference about the occupation, profession, specialisation, position and remuneration at the request of the employee.
The maximum term of the probationary is 6 months. The exact duration of probationary period is to be determined at the employer’s discretion.
The system of welfare and benefits is complex in Mongolia, and are enforced for Mongolian employees in particular. There are requirements for both employee and employer contribution rates based on a percentage of salary.
The categories of Welfare Contributions include:
- Pensions: Employer contributes 7% of salary and employee contributes 7%
- Medical Insurance: Employer contributes 2% of salary and employee contributes 2%
- Benefit Insurance: Employer contributes from 0.4-3% of employee’s salary and there is no employee contribution
- Unemployment Insurance: Employer contributes 0.2% of salary and employee contributes 0.2%