How to Hire Remote Employees In 


The Basics

Azerbaijani Manat (AZN)
Employer Taxes
Payroll Frequency
Official Language

Employment in 


Hire Independent Contractors

Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.

For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.

For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.

As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.

While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.

Benefits of Hiring Independent Contractors
Reduced overhead: Lower cost in expenses, payroll, benefits, and more.
Greater flexibility: Contractors can be brought on as-needed. If not a good fit, you simply don’t have to move forward with the contract.
Reduced legal risk: Contractors aren’t usually protected by employment anti-discrimination and workplace safety laws.
Disadvantages of Hiring Independent Contractors
Risk of Misclassification: Not only does this deny workers their proper protections, it can also result in steep penalties and damage to your company. If the IRS determines that employee misclassification has occurred, you will be liable for a percentage of the employees wages, FICA contributions, penalty fines, unpaid taxes, up to a year in prison, and more.
Lack of Control: Contractors are drawn to being independent because it gives them greater control over the work they perform and who they work with. Because they’re not employees, you can’t tell them what to work on and how it should be done.
Lack of Loyalty: Contractors come and go as-needed. Many companies hire contractors for short-term work, which makes it difficult to cultivate loyalty.
Increased Scrutiny: Using Independent Contractors typically leads to an increased risk of being audited.

Set up a subsidiary in 


A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.

Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in Azerbaijan can be expensive, stressful, and time-consuming. It's not for the faint of heart.

To set up a subsidiary in Azerbaijan, you have to:

  1. Register your business name and file articles of incorporation
  2. File for local bank accounts
  3. Learn and keep track of the local employment laws
  4. Set up local payroll
  5. Hire local accounting, legal, and HR people

If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for Azerbaijan.

Use an Employer-of-Record (EOR)

An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.

An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.

Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.

At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.

Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:

  • Ability to attract talented and motivated employees from all over the world.
  • Full legal compliance: There is no risk of violating local employment laws.
  • Transparency: Employees are still your employees. All the work, processes, operations and day-to-day business belong to you, the company, just like with any other employee. Panther just takes on all of the responsibilities, obligations and admin work related to your team's employment.
  • No risk of misclassification

Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.

Paying Remote Employees

Paying employees in Azerbaijan is not the same as paying workers in your own country. Employees have to be paid using Azerbaijan’s employment and payroll standards.

This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.

Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.

After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:

Pay through a local entity

One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.

Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.

Work with an EOR

Outside of EORs acting as the full admin employer, many also provide remote payroll.

For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.

We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.


 Specific Information

Working Hours

A full workweek in Azerbaijan is 40 hours for employees over the age of 18.


Overtime is paid at the rate of 200% of the normal salary.

Payroll Tax



  • Social Security
  • Unemployment
  • Accident Insurance

Minimum Wage

The monthly minimum wage is 250 AZN.


Pay Cycle

The payroll cycle is monthly.

13th Salary



Paid Time Off (PTO)

PTO is calculated by:

  • The minimum annual leave entitlement is 21 days for employees over the age of 18.

In addition, depending on the number of years of employment, an employee is entitled to additional leave:  

  • 5-10 years – additional 2 days of leave  
  • 10-15 years- additional 4 days of leave
  • 15 or more years- 6 additional days of leave  

Annual leave can be broken down to multiple leave periods, however, one of the leave periods must be 2 weeks in length.

Public Holidays

There are 14 public holidays in Azerbaijan.

Sick Days

The duration of sick leave entitlement provided to workers is dependent on how long they have been employed by their employer:

  • For the first 14 days of illness, it is the responsibility of the employer to pay sick leave compensation.
  • After 14 days, sick leave is paid by the State Social Protection Fund.
  • In order to receive this benefit, employees must be able to provide a medical certificate and can be extended by 3-6 day increments.  

Maternity Leave

Women are entitled to a total of 126 days of maternity leave and can begin 70 days before the expected due date.  

If the mother endured a difficult birth or the birth of more than one child, maternity leave can be extended for an additional 14 days.  

Maternity leave is paid by the State Social Protection Fund.  

Compensation is 100% of the average monthly salary of the past 12 months.  

Paternity Leave

Fathers can take 14 days of unpaid paternity leave following the birth of a child.  

Parental Leave

In Azerbaijan, there are various stipulations for various parental rights:

  • A pregnant woman or woman with a child under the age of 3 years old cannot be terminated.
  • A pregnant woman or woman with a child under the age of 18 months old is entitled to a reduced work week.  The maximum number of hours permitted is 36.
  • A pregnant woman or woman with a child under the age of 3 years old cannot be asked to work night shifts.
  • A woman with 2 children under the age of 16 is entitled to 2 additional days of paid leave; a woman with 3 or more children under the age of 16 is entitled to 5 days of additional paid leave.
  • A woman or single father with children under the age of 16 are entitled to 14 days of unpaid leave per year.

Other Leave


Marriage Leave


Bereavement Leave



Termination Process

In general, termination of an employment contract in Azerbaijan is strict and must be carried out with the utmost care.  Labor laws for termination are in favor of the employee and any misstep can have major consequences for the employer.  

For employees who are terminated based on redundancy, 3 month’s severance pay is required.  

Notice Period

The notice period in Azerbaijan is:

When terminating an employment agreement due to downsizing, 2 months’ notice is required. During this 2 month period, the employee is able to take one day of paid time off per week for the purpose of finding new employment.

  • Less than 1 year of employment– 2 weeks’ notice  
  • 1-5 years of employment- 4 weeks’ notice  
  • 5-10 years of employment- 6 weeks’ notice  
  • 10+ years of employment- 9 weeks’ notice.  

If the employee initiates the termination of the employment agreement, one months’ written notice is required.  

Severance Pay

The Severance Pay in Azerbaijan depends on:

Severance pay varies depending on the length the employee has been employed:  

  • Less than 1 year – 1 month’s salary  
  • 1-5 years- 1.4 times the monthly salary  
  • 5-10 years- 1.7 times the monthly salary  
  • 10+ years – 2 times the monthly salary  

Termination pay– in addition to severance pay, an additional 2 months’ salary must be given if:  

  • Change in terms of employment was changed  
  • The employee is called for military service  
  • The employee can no longer perform their duties due to a permanent disability  

In the event that the employee’s employment is terminated due to death, 3 month’s allowance is given to their family members.

Probation Period

The probation period can last up to 3 months.  During this time, either the employee or employer can cancel the employment agreement so long as 3 days’ notice is given.