Employment Regulations

The Labour Law of Mongolia mediates the relationship between employee with provisions and rules regarding labour contracts, working conditions, labour disputes as well as labour relations. All foreign and domestic parties entering into labour contracts are subject to comply with the general provisions articulated in the Labour Law as long as it is done on the Mongolian soil, unless the employee in subject is from a country with existing special trade agreement.

Labour contracts

In accordance to The Labour Law of Mongolia, it is mandatory for contracts to be in written form and to include the following information:

Job title
Responsibilities
Compensation amount
Work environment (e.g. factors that may impact or risk employee’s ability to perform or its safety)

During the course of negotiation, failure to provide any of the above mentioned requirement shall render the employment contract invalid. Employment contracts can either be in fixed term or permanent. The fixed term contracts can be lawfully terminated prematurely per established conditions by the Labour Law of Mongolia, e.g. mutual agreement to terminate the contract early, the employee is required to draft into military or fulfill their conscript duties etc.

Salary

Monthly salaries are generally paid in two parts, and it may vary depending on how it is negotiated on the employment contract. The total amount consists of base salary, overtime, awards and bonus pays. The current minimum monthly salary is set by the law at 420’000 MNT (approx. 150 USD) per month since 1st of January, 2020.

In following circumstances, it is mandatory for employers to pay extra compensation:

Employee works overtime on employer’s initiative (no less than 150% rate of normal pay)
Employee worked during public holiday (no less than 200% rate of normal pay)
Night shift, which the rate is determined by the employment contract.

Working hours

The typical full time employment in Mongolia is 5 working days a week from Monday to Friday, each day has 8 hours of work hours, totaling 40 hours a week. As stated in the Labour Law of Mongolia, there has to be at least continues 12 hours of off duty between each work day. If the employer asks the employee to work longer than 8 hours a day, the extra work hours are considered overtime and it is to be compensated by either in time or overtime pay. There are additional restrictions that employer must comply with when they require employees to work during weekends and public holidays.

Overtime Pay:

If an employee works over 40 hours a week then the company is expected to pay for overtime to the employee unless they work in Management position.

Companies that intend to use overtime on a regular basis should put in place a written agreement between employees and management commonly called “article …″ and submit it to Labor Standards Inspection Office.

Severance pay

The employee is entitled to have a severance payment if the employment contract has been lawfully terminated or the employee is drafted for military service or conscript duties as articulated in Labour Law of Mongolia. The entitled amount of severance pay is no less than the average salary that the employee is currently receiving. However, the amount may vary if it is stipulated otherwise in the employment contract. The method to determine average salary for the employee is set by the Minister of Social Welfare and Labour.

Paid vacation

Employee annual paid vacation is mandatory in Mongolia, and the minimum is 15 days a year. The number of paid vacation days may differ depending on factors such as the years worked for the employer or the type of job, or even the economic sector. A new employee becomes entitled to annual paid vacation after 11 months of employment, and if the employee is unable to take their annual vacation, it can be exchanged for extra payment.

Maternity leave

New mothers are entitled to have 120 days of maternity leave as stated in the Labour Law of Mongolia, and they receive benefit payments from the state for two months on the either side of expected delivery. The maximum benefit is currently set at ten times the minimum monthly salary. In occurrence of delivery complications, which can entitle the new mother for extra maternity leave days. The new mothers are also entitled to extra one or two hours of rest during work days until their child is one year old.

Sick Leave:

In general, there is no sick leave rights in Mongolia. When employees get sick they use their paid vacation to take leave of absence. Some foreign companies grant sick leave to their employees as a special benefit.

Business Expenses:

Business related expenses are fully reimbursed to employees (travel , meals, lodging). Expenses non related to work usually have to be included in salary and are subject to taxation. Example: sport club membership, Expenses refunds are typically not included in the payroll slip.

Short Term Leave / Long Term Leave

Short Term leave and Long Term leave are not regulated by Labor law. It is a matter of agreement between the company and the employee. Usually employees can take unpaid short leave.