Informal employment, low awareness hinder labor rights in Armenia

By Alexander Pracht

In a message marking International Labor Day last week, Armenia’s Human Rights Defender Anahit Manasyan acknowledged that the country continues to face a range of systemic challenges related to labor rights. While she was not specific, various reports and surveys indicate that despite formal guarantees, issues such as unregistered employment, the marginal role of trade unions, widespread lack of legal awareness among workers, and frequent violations of work schedules and rest time remain deeply entrenched. 

Unregistered employment and lack of awareness

A significant portion of Armenia’s workforce remains outside the formal economy. According to a survey by APR Group, a Yerevan-based research organization,  16.7% of workers reported that they did not have a job contract in 2022, a situation more frequently observed in rural areas. These individuals are considered unregistered employees and do not pay taxes on their income, effectively existing outside the country’s labor protections and tax system. 

Unregistered employment in Armenia is punishable by a fine of approximately $650 per employee, yet enforcement remains weak. Partial registration has also become a widespread practice. Employers often declare only a small portion of an employee’s salary officially, while paying the remainder under the table to evade taxes and reduce social payments. This leaves workers without full legal protections and deprives the state of vital tax revenue, namely 20% income tax and 5% toward the worker’s retirement fund, paid by the employer.

Such lack of formalization goes hand in hand with poor awareness of basic labor rights. A shocking 1 in 10 working Armenians said in the survey they were not aware that they have a legal right to annual paid leave. Even more concerning, in the 2023 survey of employers, only 0.7% admitted they provided annual leave after the workers complained about not receiving it.

Additionally, one third of the workforce does not know how much tax is being paid from their salary, since employers are responsible for tax returns and workers do not receive transparent breakdowns. As a result, many are unaware of their gross income. However, this could begin to shift soon: a new mandatory income declaration system was introduced this year with the aim of increasing transparency and awareness.

Furthermore, one third of workers admitted they are not fully aware of the terms of their job contracts, as they were never provided a copy. This issue is especially common among respondents with lower levels of education, leaving many vulnerable to exploitation and unable to confidently assert their rights. This contrasts sharply with perceptions among employers: in a separate 2023 APR Group survey, 83.3% of employers claimed that almost all of their workers were fully aware of their employment conditions and contracts, revealing a striking mismatch between employer assumptions and worker realities.

Safety regulations

Poor working conditions remain one of the most pressing concerns for Armenian workers. The APR employees’ survey showed that 65.6% of respondents said that no measures are taken at their workplace to ensure health and safety. Only a small fraction, 6.8%, reported that such measures were implemented effectively.

What makes the situation even more alarming is the lack of compensation for working in hazardous environments. The same survey found that 79.2% of those who identified their working conditions as harmful to their health do not receive any compensation, neither financial nor in the form of additional leave or benefits.

A culture of uncompensated extra work

While Armenian labor law sets an 8-hour limit for the standard workday (for a 5-day workweek), this regulation is frequently ignored in practice. Only 46.5% of public sector workers and 40.5% of private sector workers actually work the standard 8-hour day. Significant portions, namely 29.1% of private and 21.1% of public sector employees exceed this, with 8.6% and 6.4%, respectively, working even more than 12 hours daily.

This additional workload often comes without financial recognition. Among those who said they had ever worked overtime, 44.8% reported receiving no bonus at all. Only 28.4% of respondents said they actually receive a bonus for their overtime work.

The lack of proper compensation extends to work on weekends and public holidays. According to the study, only 44.1% of workers have never had to work on weekends or holidays, suggesting that more than half have been required to do so at least occasionally. 

Impotent trade unions

Trade unions appear to have a marginal role in Armenia’s labor landscape. According to the APR survey, 60.8% of respondents reported that there is no trade union at their workplace. Even among those who said there is one, union membership is neither widespread nor particularly impactful.

When union members were asked what benefits they receive, their responses reflected a limited and largely symbolic role. A total of 36% mentioned material or moral support such as holiday gifts or invitations to social events and 19.1% cited access to affordable recreation, while 14.2% admitted union membership gave them nothing at all. Only 10.9% said they felt protected if needed, and fewer still noted access to free legal counseling (4.5%) or a sense of solidarity (4.1%).

Gender inequality

Gender inequality remains deeply rooted in Armenia’s labor market. According to the Statistical Committee’s report published last year, only 50% of women are employed, compared to 72.1% of men aged 15 to 74. Despite this gap in formal employment, women perform a disproportionate share of unpaid labor: they make up 63% of those producing goods for household consumption, while men account for only 37%. In response to these disparities, the Ministry of Labor and Social Affairs has launched dedicated support programs.

“When women dedicate themselves to bringing up children, they often return to the labor market once they turn 30-ish. When they do, they often face the problem of their education and skills being outdated. This is why they find themselves working low-paid jobs requiring low qualifications. This is how the wage gap is formed,” said Ruben Sargsyan, Armenia’s Deputy Minister of Labor and Social Affairs, in an interview with CivilNet.

Women also remain underrepresented in leadership. Only 33% of heads of government branches, local bodies, organizations, and associations are women. In the country’s parliament, 39% of MPs (42 out of 107) are women. At the executive level, only 4 out of 15 cabinet ministers are women, though this marks an improvement from just two female ministers last year.

Civil society pushes for reform

Recognizing the depth of Armenia’s labor rights challenges, civil society organizations, supported by international partners, are working to push forward systemic change. Since 2021, the Decent Work Now project, funded by the European Union’s delegation to Armenia, has brought together some of the country’s most prominent NGOs, including the Helsinki Citizens’ Assembly Vanadzor, Transparency International, and the Factor media outlet. Together, they are advocating for strengthening workers’ protections.

One of their central priorities is raising public awareness around labor rights. This foundational step is seen as essential not only for creating lawful employment relationships, but also for addressing Armenia’s persistently high unemployment rate, which stood at 13.9% last year. 

Another key focus is expanding access to legal counseling. The project emphasizes the need for both individual and systemic solutions to labor issues, which will require not just legal counseling, but also active cooperation with state bodies such as the Health and Labor Inspectorate. Addressing grievances and enforcing standards will demand stronger institutional engagement.

Finally, the initiative stresses the importance of training and capacity-building not just for workers, but also for their representatives. These efforts should harness the expertise of both state agencies and civil society groups, while also increasing the role of trade unions as meaningful players in Armenia’s labor environment. Otherwise, the country’s workers are unlikely to see substantial improvements in their labor conditions and rights enforcement.