Comprehensive Guide to Hiring Employees in Uzbekistan

Uzbekistan is an Asian country with a population of 35 million and an exceptional literacy rate of 100% in 2018. With its capital in Tashkent, Uzbekistan provides a considerable talent pool at extremely affordable rates for a minimum wage of 920,000 UZS or approximately USD 80. As a result, conducting recruitment and selection in Uzbekistan is hugely profitable for international businesses. However, setting up a business and knowing how to hire employees in Uzbekistan is crucial in formulating better organizational procedures and operations. 

Proper recruitment and selection in Uzbekistan enable companies to build a productive and hardworking community of people. However, finding and employing individuals with suitable skill set and qualifications can be time-consuming. Understanding the prerequisites of hiring is better to enhance the hiring process in Uzbekistan and deal with the complexities. 

This article deals with the various aspects of the hiring process in Uzbekistan and what an employer needs to hire staff in Uzbekistan.

Things to Know Before Hiring in Uzbekistan

Employers need to be aware of the various employment-related factors that might guarantee a safe working environment for the employees. They must comprehend how to hire employees in Uzbekistan and the terms and circumstances of their employment.

Some of the crucial things about recruitment and selection in Uzbekistan that employers must know before they hire employees in Uzbekistan is listed as follows: 

Working hours

• The regular weekly working hours are 40 hours per week. 
• An employee working in Uzbekistan six days a week can work 7 hours daily. 
• On the other hand, an employee working five days a week can work 8 hours a day. 

Overtime

Before employers hire employees in Uzbekistan, it is essential to know the overtime rule law limits the working hours to 4 hours every two days. 

• Overtime work must be under 120 hours in a year.  
• Employees working overtime get 200% or double their basic salary. 

Employment contract

To know how to hire employees in Uzbekistan, an employer must know the prerequisites of employment contracts. Employers must draft an employment contract (oral or written) for a definite or indefinite period. An employment contract must include the following essentials:

• Personal details of the employee such as name, age, sex, etc. 
• Address of both the company and the employee. Every detailed description is to be mentioned in the employment contract if the employee has a temporary address. 
• The details of the identity proofs should be mentioned. 
• Nature and duration of employment. 
• Details regarding salary and other payment details 
• Working hours and overtime pay details 
• Place of work. 
• Both parties must sign the terms related to notice periods, contract date, and location.

Minimum wage

As of 1st June 2022, the monthly wage of employees in Uzbekistan is a minimum of UZS920,000.00. The Uzbekistan Government runs regular checks to ensure compliance with the minimum wage notification.

Probation period

The probation period must be considered while contemplating hiring staff in Uzbekistan. The preliminary or probation test period can be up to three months.

Public holidays

There are a total of 10 public holidays in Uzbekistan. The list of public holidays is enumerated as follows:

Leaves

Anyone conducting the recruitment and selection in Uzbekistan should also know the various kinds of leaves employees are entitled to. Here is a list of the various types of leaves that employees can claim:

• Annual leave: Employees are entitled to 15 calendar days of paid annual leave. In exceptional circumstances, the employee can it to 30 working days.
• Maternity leave: Female employees in Uzbekistan can claim a maternity leave of 126 calendar days. The division is such that a female employee is entitled to 70 days of paid maternity leave before childbirth and 56 days after childbirth. If there is a case of multiple births, the maternity leave increases to 70 days after the children’s birth.
• Sick leave: Employees can take sick leave in Uzbekistan for 30 days. The State Social Insurance Fund pays compensation in this period to the employees, which can range between 60% to 80% of their average salary. The compensation is 100% of the employee’s salary during work-related accidents.
• Parental leave: Male and female employees with children below 16 or with some disability can take parental leave of at least three days. The state social insurance fund compensates employees in case of parental leave.

Termination of employment contract

The hiring process in Uzbekistan also includes the knowledge of the termination of employment contracts and the grounds for the same. Here is a list of the grounds on which an employer can terminate the contract:

• If work duration changes and employing a more extensive workforce results in redundancy of work. 
• If the organization is getting liquidated.
• When an employee fails to perform the duties due to insufficient knowledge or illness.
• During acts of misconduct or systematic breaches of duties.
• During a change of company leadership
• If any employee acts against professional policies and fails to fulfill professional duties.
• If an employer wants to hire a full-time employee, they can terminate a part-time employee.

Notice period

The employment laws in Uzbekistan state that an employee and an employer can terminate an Employment contract with mutual consent. A notice period has to be served by an employee in such cases. The duration of the notice period varies from case to case, has been listed below:

Severance pay

Recruitment and selection in Uzbekistan offer severance pay but in minimal cases. An employee is entitled to receive severance pay only if the employer terminates the contract of employment on the following grounds:

• Changes in the magnitude of labor and production.
• Changes in technology.
• Reduction in the volume of work.
• Change of staff or the nature of work.
• Liquidation of the company.

The employee must receive a severance pay of 1 month’s salary for every two years of service in an organization.

Income tax 

People in Uzbekistan pay income tax in compliance with their tax residency status. An individual in Uzbekistan is considered a resident if such a person has resided for more than 183 days or in Uzbekistan for 12 months. 

Income tax applies to the worldwide income of the residents. For non-residents, income tax is calculated based on their source of income in Uzbekistan only. The income of residents and non-residents in Uzbekistan that comes in the form of dividends from the share of joint stock companies is exempted from the PIT and calculated at a lower rate.

Social security

To hire staff in Uzbekistan, employers must make monthly contributions to the accumulative pension account of the employees at a rate of 0.1% of their basic pay. The amount of these monthly contributions is excluded during income tax calculation.

However, the social security rate for companies is 25%. Employers have to make the following percentage of contributions to the social security fund:

The Cost of Hiring an Employee in Uzbekistan

The cost of recruitment and selection in Uzbekistan depends on the requirements of the company or the particular job position. Companies prepare a budget for recruitment and selection in Uzbekistan for some essential heads. The significant factors that decide the cost of recruitment and selection in Uzbekistan can be categorized as follows:

• Salaries of the employees and essential perks.
• Cost of advertisement for calling for employees.
• Cost of conducting the induction of new employees.
• Cost of providing the necessary training to employees.

What Does a Company Need to Hire Employees in Uzbekistan?

To employ and hire staff in Uzbekistan, the employers and the company must meet some basic requirements. Businesses must have a local legal entity with the following essentials:

• Name of the business entity.
• The local address of the company.
• Company bank account.
• Company registration number.
• A registered subsidiary address.

Additionally, employers should be well aware of the rules and regulations before they hire employees. Employers should also know and understand the duties of the particular position for which they are hiring someone. All these help to make recruitment and selection in Uzbekistan seamless. 

The best way to simplify recruitment and selection in Uzbekistan is to appoint a global EOR platform that deals with many areas, including employee compensation and benefits, payrolls, taxes, compliance with employment laws, etc.

Various Options for Hiring Employees in Uzbekistan

There are various distinctive ways to hire staff in Uzbekistan. The major ways companies conduct recruitment and selection in Uzbekistan are as follows:

• A company can set up a legal entity and contact the hearing process.
• Companies can hire staff in Uzbekistan with the help of independent contractors.
• Organizations can conduct recruitment and selection in Uzbekistan with the help of various social media platforms like LinkedIn.
• Professional Employer Organization (PEO) and Employer of Record (EOR) solutions can help companies conduct recruitment and selection in Uzbekistan.

The Steps to Hiring in Uzbekistan

Recruitment and selection in Uzbekistan includes the following steps:

• Calling for applications: This phase includes the advertisement to see which dates can respond to or apply for the position. Sorting the applications with the help of application tools is also included in this step. 
• Resume screening: In this step, employers sift through the collection of resumes. Specific parameters like background, experience, skills, etc., are considered while calling the potential candidates.
• Screening call: A screening call institute to identify whether a candidate is genuinely interested in the job position. After an affirmative from the candidates, the shortlisted ones are moved to the next steps of the hiring process in Uzbekistan.
• Conducting assessment test: In this step of recruitment and selection in Uzbekistan, the employee prepares a questionnaire that the potential candidates have to take up as a part of the assessment test. This test helps assess the candidates’ skills, such as critical thinking ability, strategic thinking, personality, intelligence, etc.
• In-person interviews: Employers conduct personal interviews of all the shortlisted candidates to select the best fit for the position. The interview specifies the goals of the job position and tests their abilities to assess the right candidate.
• Background check: Once the employer has selected the best candidate to fill the position, they run a reference check of the potential candidate to see if they have any criminal record. It considers the legal and reputational aspects of the company.
• Reference checks: During reference checks, an employer seeks confirmation about whether the statements made by the candidate are true or not. It helps employers learn about the candidates’ performance in stressful situations and the weaknesses that the candidate possesses.
• Making the job offer: After a series of adequately organized steps for the hiring process in Uzbekistan, the employer finally decides and makes the job offer to the candidate they chose. Job offer includes discussing the terms of employment, remuneration, working hours, benefits and compensation, etc.

Let Multiplier be your EOR platform in Uzbekistan

This guide is presented to you to explain how to hire an employee in Uzbekistan. Hiring employees in Uzbekistan can be time-consuming, and that is where companies choose to rely upon EOR platforms. Multiplier EOR platform helps to streamline the hiring process in Uzbekistan. It will help ensure you have productive and positive recruitment and selection in Uzbekistan from the start.

Multiplier is here to save your day and help you understand how to hire employees in Uzbekistan. 

It will help you to hire staff in Uzbekistan with the right qualifications and capabilities that suit the position in your company. Manage better professional relationships and avoid the complexities of recruitment and selection in Uzbekistan and 150 other countries with the best EOR platform.