Table of Contents

Mongolia

Table of Contents

Currency

Mongolian Tugrik (MNT)

Payroll Frequency

Monthly

Employer Taxes

12.5% - 14.5%

About Mongolia

Once the center of an empire stretching from Asia to Europe under Genghis Khan, Mongolia is a landlocked country in Central Asia dominated by sparsely populated steppe and semi-desert. A third of the population lives in the capital, Ulaanbaatar, while another 40% are nomadic, herding livestock in the extensive grasslands. In the late 12th century, a chieftain named Temüjin succeeded in uniting the Mongol tribes between Manchuria and the Altai Mountains and took the title Genghis Khan. He waged a series of brutal and fierce military campaigns conquering much of Asia and forming the Mongol Empire, the largest contiguous land empire in world history. The majority of the population are Buddhists, and horse culture is still an integral part of their society. Mongolian cuisine is rooted in their nomadic history, with dairy and meat featuring prominently, with few vegetables. Two of the most popular dishes are Buuz (a meat-filled steamed dumpling) and Khuushuur (a deep-fried meat pie).

Employment Relationship

• Permanent Employment

Permanent employment contracts are those that are for indefinite term. They are the default form of employment. Indefinite contracts can be formed for employees who are engaged in seasonal work on a regular basis.

• Fixed-Term or Specific-Purpose Contracts

In Mongolia, employment contracts can be made for fixed term with an expiration date or specific work to be performed. If the employer has not notified the employee of the termination of the contract, the contract is considered to be extended. A contract concluded for a fixed term shall be deemed to be concluded for an indefinite period if the total duration of the originally concluded and extended term is more than two years.

• Temporary Employment Contratcs

Employers in Mongolia are allowed to hire employees for temporary duties through a labor supply service. The total number of temporary employees must not exceed 30% of the total workforce. Such contracts can be formed for a maximum duration of six months to work in the absence of a permanent employee and to perform works and services that are of ancillary nature to the main activities of the business entity or organization. It is prohibited to agree to and include in the labor supply contract the rights and obligations of the receiving party that are worse than the rights and obligations of the employees of the client. The employment conditions of an employee working under a supply contract shall be the same as those of the recipient's full-time employee. An employee working under a labor supply contract shall have the same right to be included in the recipient's collective agreement as a full-time employee. 

Probationary Period

In Mongolia, an employer may enter into a probationary employment contract in order to verify that the employee meets the requirements of the job. Probationary period cannot exceed three months and can be extended once by mutual agreement for a period not exceeding three months. The basic salary of a probationary employee shall be set not less than the basic salary of the job. In case of seasonal work to be performed once, in place of an employee whose job is retained, or in a temporary job, a probationary agreement shall not be concluded with the employee. 

Working Hours

In Mongolia, the standard working hours are 40 per week or eight hours per day. For part-time employees, the working hours are 32 hours per week. The working hours of a minor employee must not exceed 30 hours per week. The maximum working hours per week shall not exceed 56 hours. The additional working hours per day shall not exceed four hours. Employers must keep a record of employees' working hours. All employees must get two consecutive days' weekly rest. An employee's working hours can be reduced under certain circumstances and employees are paid by the hour.  

Holidays / PTO

• Statutory Holidays

—- Employees working on public holidays are compensated with a day off or twice their wages. It is prohibited to perform continuous production, public services, transportation, communication and necessary work, to work on public holidays and weekends at the initiative of the employer, except in case of emergencies. Pregnant employees, employees with a child under three years of age or a child with a disability under 16 years of age in need of permanent care cannot be employed to work on public holidays. 

• Paid Annual Leave

Employees in Mongolia are entitled to paid annual leave after they have worked for at least six months. The minimum duration of leave is 15 days. Employees under 18 years of age or with disabilities get five additional days of annual leave. Annual leave pay shall be calculated based on the employee's average annual salary for the given work year. Employees can break up their leave and take 10 days of their annual leave at a time.  The duration of annual leave increases with the length of service. Employees working in difficult working conditions are granted additional leave days. Part-time employees shall be provided with basic and additional annual leave based on the total number of hours worked during the working year.   Employees whose employment is terminated before the year ends are entitled to remuneration for their annual leave. If for some reason, an employee is unable to take his/her annual leave, they are paid a premium of 2% of their annual leave salary for unused leave.  

• Sick Leave

There are no provisions regarding sick leave in Mongolia's Labor Code. Employees who have paid social security contributions for 3 or more months are entitled to temporary disability benefits due to non-occupational injuries or sickness on submission of a medical certificate. The benefit is paid as a percentage of 3 months' average salary of the employee, depending on the number of years of contributions.  Temporary disability benefits for the first 5 days of temporary disability shall be paid by the employer, and benefits for the period from the 6th day until the disability is restored or the right to receive a disability pension shall be paid from the benefit insurance fund. The maximum duration is 66 days or 132 days in case of cancer or tuberculosis. 

• Maternity Leave

The Labor Code of Mongolia grants 120 days' maternity leave to new mothers. It is increased to 140 days for twins. Maternity benefit is paid at the average salary of the employee by the Social Insurance Fund. Employees must have paid insurance contributions for at least 12 months, including immediate 6 months before taking maternity leave to be eligible for benefits. Adoptive parents of a newborn child get paid leave up to 60 days. Maternity leave is also granted to a mother who gave birth to a child 196 or more days prematurely, had a medical abortion, terminated the pregnancy by medical means, or gave birth to a viable child without 196 days of pregnancy.  Employers must not dismiss an employee for being pregnant or on maternity leave. Pregnant employees can agree with the employer to perform their duties from home or from a distance. It is prohibited to engage a pregnant woman or an employee with a child under 3 years of age on a business trip, except with their consent.  

• Paternity Leave

In Mongolia, employers shall provide fathers with at least 10 working days off to take care of their newborn child and pay them an amount equal to the average salary for that period.

Termination of Employment

• Notice Period

In Mongolia, employees have to give their employers notice of at least 30 days before terminating their employment. Employers are required to give a notice of at least 30 days for mass dismissals.

• Severance Benefits

Employees who are dismissed are entitled to receive severance benefits regardless of whether they are entitled to unemployment benefits from the social insurance fund, except when they are dismissed for gross misconduct. The amount of severance benefit is calculated as follows: If they have worked for the business entity or organization for 6 months to 2 years, it shall be equal to at least 1 month's basic salary If they have worked for the business entity or organization for 2 to 5 years, it shall be equal to at least 2 months' basic salary If they have worked for the business entity or organization for 5 to 10 years, it shall be equal to at least 3 months' basic salary If they have worked for the business entity or organization for 10 or more years, it shall be equal to at least 4 months' basic salary In case of mass dismissal of an employee, the employer shall determine the amount of termination benefit in negotiations with the employee's representatives not less than that specified above. Part-time employees are also entitled to severance benefits.