Minimum Wage
Minimum wage is regulated under the Labour Law 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.
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.
The minimum wage is a minimum rate of basic pay and wage that is followed by public and determined by competent authorities for the purpose of protecting legitimate interests of an employee or worker or employee. Setting an employee's hourly basic pay at the minimum wage level is forbidden if they are working under an employment contract, contract for hire, or similar contracts that involve work requiring specific education, professional expertise, or skills. On the other hand, the Minimum Wage law allows employees to receive wages higher than the minimum wage, and employers are also permitted to pay wages exceeding the minimum wage.
While fixing or adjusting minimum wages, the following factors must be taken into account: changes in cost of living; the proper ratio between the productivity of labour and average wage; levels of social insurance, welfare pensions, and welfare benefits; and economic growth and employment rate in the country.
is the minimum wage rates are fixed and revised on the basis of alterations in the living cost of the population, the proper ratio between the productivity of labour and average wage, social insurance levels, welfare pension, and welfare benefits, along with economic growth and employment rate in the country.
National Tripartite Committee on Labour and Social Consensus must fix a minimum wage at least twice a year taking into account factors specified above. The minimum wage can be renewed/adjusted if either of the parties or parties that are represented in the 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, the government can propose to retain the minimum wage rate for a certain period of time in the public interest (wage freeze) or to lower it temporarily where other types of social protection measures can be used in complement.
A worker or a trade union may file a complaint with a labour inspector or court regarding violation of Minimum Wage law. A judge or labour inspector can impose a fine of 0.6 million to one million tugrug on an enterprise for violation of the provisions of minimum wage law.
An apprentice’s basic salary must be agreed with the apprentice taking into account the nature of the work to be done, and the experience and skills the apprentice is expected to acquire. The salary cannot be lower than 70 percent of the salary of the regular worker performing the same work and duties.The premiums paid to an employee is also calculated on the basis of the minimum wage prescribed in accordance with the law.
Additional pay can also be given to an employee on the basis of his/her skills, years of work, professional qualifications, work in harsh working conditions, or any other such relevant criterion.
Source: §63, 107-108, 116, and 151 of the Labour Law of Mongolia (Revised Version), 2021; §2-7 of the Minimum Wage Law 2011
Regular Pay
Under the Labour Law, a salary consists of basic wages, additional pay, extra pay, annual leave pay and bonuses.
The principles governing remuneration include equal pay for work of equal value, consideration of cost of living and inflation, alignment with employee skills, performance, and productivity, non-discrimination, and transparency in calculating remuneration. Employers are responsible for implementing internal labour regulations related to remuneration, including job lists, descriptions, labour norms, and remuneration regulations. Remuneration should be paid at least twice a month on fixed paydays, with adjustments for weekends and public holidays. If a payday falls on a weekend or public holidays, it shall be moved to the preceding workday.
Employers must provide written or electronic information about the composition of remuneration and amount and nature of deductions from remuneration. Remuneration can be calculated and paid on an hourly, daily, or weekly basis with prior agreement. Advance payment of remuneration is possible upon request. Payment of remuneration must be made directly to the employee and failure to comply with payment regulations may result in liability under relevant laws. Employees’ basic salary, annual leave pay, additional pay, extra pay and allowances must be paid in monetary form in the national currency.
Source: §101 – 105 of the Labour Law of Mongolia (Revised Version), 2021
