(PwC Mongolia) The revised Labour Law (the “New Labour Law”) was adopted on 2 July 2021 and will come into force next year. The proposal for revising the Labour Law was submitted to the Parliament on March 28, 2018. Furthermore, there had been huge expectations of the revised Labour Law, which replaced the current law after 22 years. With this Tax and Legal Alert, we highlight the key changes in the New Labour Law and its impact on business and payroll calculations.
Application
The New Labour Law will come into force on 1 January 2022. An employment agreement concluded prior to the adoption of the New Labour Law shall be valid for a period agreed upon by the parties. However, if the employment agreement is amended in accordance with the New Labour Law, the legal status and labour conditions of the employee should not be deteriorated.
Key changes
1. Base salary of employees during the probation and apprenticeship period
2. Allowance during a non-compete period
3. Employment deemed to be continuous while employees on a leave
4. Extra pay for night works
5. Annual leave loading
6. Severance pay
7. Limitations on work hours
8. Shift-works
9. On-call schedule
10. Roster shifts
11. Employers’ obligation to provide pay slips to employees
12. Employees’ obligation to pay back study costs
13. Reimbursement for employees who use personal tools and items for work
14. Paternity leave
15. Employing a person with disabilities
Further actions to be taken
Employers are recommended to take the following measures in relation to the New Labour Law:
Update/amend/renew key employment documents such as employment contracts and labor/HR policies/manuals;
Develop/update an employee data protection policy;
Conduct a payroll cost analysis to see impact and budgeting for 2021 and onwards.