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Guidelines for Compressed Working Hours,Determining the Average Salary and Granting Annual Vacation and Calculating Annual Vacation Pay

Mongolia • No. 01/2022 • February 2022

On 6 December 2021, the Minister of Labour and Social Protection approved the Guideline for Compressed Working Hours /reference number A/193/, Guideline For Determining The Average Salary /reference number A/192/, Guideline For Granting Annual Vacation and Calculating Annual Vacation Pay /reference number A/191/ in relation to the Revised Labour Law of 2021. We are pleased to share summaries of these regulations with you.

1. GUIDELINE FOR COMPRESSED WORKING HOURS (CWH Guideline)

The CWH Guideline shall be followed when calculating working hours of employees of a business entity or organization which is unable to comply with the standard daily and weekly working hours established by law due to the nature of work, services and production.
CWH Guideline provides that under certain circumstances, delivering large-scale work orders in a short period of time and during the peak period of industry specific works (such as mining exploration and exploitation; building construction and maintenance; roads and road facilities repair and maintenance; harvesting, hay and fodder preparation; delivering large-scale work orders in a short period of time; and the similar seasonal or one-off works, services and production), employers may use the CWH arrangement during the peak period by extending the standard working hours or days of employees for certain period of time while granting time of in lieu or monetary compensation once the peak period ends. The employer can select from the following arrangements when compensating overtime under the CHW regime:

(i) compensatory rest;
(ii) reducing the working hours;
(iii) reducing the number of working days per week;
(iv) additional leave in addition to the regular annual vacation period; or
(v) overtime payment / cash out (the average hourly rate shall be increased by no less than 1.5 times).
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2. GUIDELINE FOR DETERMINING THE AVERAGE SALARY (Average Salary Regulation)

The Average Salary Regulation shall be followed in determining the average salary of an employee for the purpose of calculating additional pays and some allowances in accordance with the Labour Law. 
As the Average Salary Regulation provides, the benchmark for average monthly working days can be 21 days while the average monthly working hours can be 168 hours

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3. GUIDELINE FOR GRANTING ANNUAL VACATION AND CALCULATING ANNUAL VACATION PAY (Annual Vacation Regulation)

The Annual Vacation Regulation shall be followed for calculating the annual vacation pay.

The employer is required to approve an annual vacation schedule in the first quarter of each year based on the employee’s request without disturbing the normal operation of work, services and production. Therefore, in case of the normal operation of a legal entity is suspended due to work necessities, the employer has a right to give annual vacation to employees.
An employee's annual vacation shall be calculated in an employment year. Employees can take annual vacation in parts and at least one of them shall be 10 continuous working days in an employment year. Moreover, annual leave days of part-time employees shall be prorated to the number of hours they worked in an employment year.

The Annual vacation shall not be granted during the following period:

(i) childcare leave,
(ii) active military service,
(iii) training for more than 6 months,
(iv) protection of witnesses and victims, and
(v) suspension from work by the competent authority.
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Tsendmaa Choijamts

Director, Tax and Legal services, PwC Mongolia

Tel: +976 70009089

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