Work and Wages

Minimum Wage

Minimum wage is regulated under the Labour Code and the Law on Minimum Wage. Minimum wage is the wage payable to a worker executing simple work or a job that does not require specified qualifications and special skills.

The Minimum wage should not be lower than the minimum level of living standards. In fixing or adjusting the minimum wage, the following factors must be taken into account: cost of living, the general level of (average) wages in the country, changes in real incomes of the population, the amount of social insurance and welfare benefits, economic growth, levels of productivity and the employment situation.

Minimum wage is fixed by the National Tripartite Committee on Labour and Social Consensus which comprises the representatives from government and social partners (workers and employers).  The National Tripartite Committee exercises the following full powers concerning fixture of minimum wage:

  • issuing an order to fix or adjust minimum wage;
  • Collecting and analyzing information concerning minimum wage;
  • Issuing a methodology and guidelines to fix and ensure implementation of minimum wage; and
  • maintain a professional research team specialized in labour productivity and wage for supporting the work to fix minimum wage;

Minimum wage can be fixed at higher level than that fixed by the National Tripartite Committee on Labour and Social Consensus upon agreement between worker and employer representative organizations through a sectoral or inter-sectoral agreement.

National Tripartite Committee on Labour and Social Consensus must fix a minimum wage at least twice a year taking into account factors specified above and which can be renewed/adjusted if either of the parties or parties that are represented in National Tripartite Committee proposes to fix or adjust minimum wage. In emergency situations such as economic crisis, natural calamity (force majeure) or state of emergency, government can propose to retain the minimum wage rate for certain period of time in the public interest or to lower temporarily where other types of social protection measures can be used in complement.

A worker may file complaint with the labour inspector if the employer is not paying the specified minimum wage. The 2017 amendment in Labour Code provided for an increase in the penalties for breaches. The penalty for the failure to pay minimum wage has been increased from MNT 5,000-20,000 to MNT 500,000-1,000,000 for individuals and from MNT 50,000-100,000 to MNT 5,000,000 - MNT 10,000,000 for legal entities.

Source: §2-7 of the Minimum Wage Law 2011; §48 of the Mongolian Labour Code, 1999 

Regular Pay

Under the Labour Code, a salary consists of basic wages, additional pay, extra pay, awards and bonuses.

Salary can be determined on a piecework basis, on hourly basis, or in other forms and paid according to the work results. Male and female employees performing the same work must receive the same salary. Higher salary may be paid for work requiring specialization, knowledge, or a profession, as well as for one with special conditions. If the failure to fulfil the production norm is not the employee’s fault, the employee will be paid remuneration according to the job performed and reimbursed the difference between the basic salary and such remuneration. However, if the drop in production is because of worker’s fault, he/she is paid remuneration according to the job performed.

In addition to the basic salary, an additional pay can be paid to an employee based on work performance. This is determined in an amount through the collective agreement. Similarly, an extra pay according to an employee’s professional level, labour conditions and other extra pay is determined and paid by collective agreement, based on the job description.

Workers must be paid salary in monetary form at least bimonthly on fixed dates, on an hourly, daily or weekly calculation basis.  Advance may be given to an employee at his or her request.

If employee’s actions have led to a loss for the employer, deductions can be made from his salary provided that such deduction does not exceed his/her average salary for one month. Deductions in other cases are provided in the legislation. The total of deductions from an employee's monthly salary cannot exceed 20% of such salary (excluding personal income tax) except in the case of child maintenance payments. In the event of multiple deduction claims, the aggregate amount of such deductions cannot exceed 50% of the employee's monthly salary.

If the employee disagrees with the employer's decision to make a deduction from his salary, he can make a complaint to the labour dispute settlement commission.  Lastly, if an employer has made a wrong deduction from an employee’s salary, the employee can file a complaint for reimbursement of such deduction with the labour dispute settlement commission.

Source: §47, 49-51, 60, 61, and 63 of the Mongolian Labour Code, 1999


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