According to Article 12.1(j) of the Labor Code of the Republic of Azerbaijan, employers are obligated to insure their employees. When an employee starts working, they are insured at the employer’s expense, providing protection against potential risks that may arise during employment or stem from professional activities.

Employers are required to ensure mandatory state social insurance, compulsory health insurance, unemployment insurance, and insurance against the loss of occupational capacity resulting from workplace accidents and occupational diseases. But what benefits do these types of insurance offer employees?

The purpose of mandatory social insurance is to compensate for the income lost during an employee’s employment period—such as salaries, allowances, and other payments—by covering them in the prescribed manner and amount, as well as to prevent income loss (Article 304 of the Labor Code of the Republic of Azerbaijan). Mandatory social insurance provides financial support to employees when they reach retirement age, acquire a disability degree, temporarily lose their ability to work, lose the family breadwinner, or during pregnancy, childbirth, child-rearing, or the need for sanatorium treatment. In the event of an employee’s death, their family members are also entitled to receive relevant payments.

Compulsory health insurance aims to ensure that employees are provided with necessary medical services and medications in case of health issues, as stipulated in Article 1.1-3 of the Law on Medical Insurance of the Republic of Azerbaijan.

Unemployment insurance, as defined in Article 1.1 of the Law on Unemployment Insurance of the Republic of Azerbaijan, seeks to enhance social protection for the population by compensating for lost wages, implementing preventive measures to avoid unemployment, and providing for daily living expenses during periods when employees are not engaged in any professional activity.

Mandatory insurance against workplace accidents and occupational diseases provides insurance coverage for the loss of occupational capacity due to accidents at work or occupational diseases. It ensures compensation for damages to the employee’s health and life, including the loss of occupational capacity or death, as outlined in Article 2.0 of the Law on Mandatory Insurance Against Loss of Occupational Capacity Resulting from Workplace Accidents and Occupational Diseases.

As emphasized, one of the primary responsibilities of employers is to ensure the legally required insurance of their employees. Since employee insurance is mandatory, it is recommended that employers timely fulfill their obligations regarding payments for mandatory state social insurance, compulsory health insurance, and unemployment insurance. Otherwise, under Article 460 of the Code of Administrative Offenses, employers may face fines ranging from 30% to 70% of unpaid amounts (not exceeding 50,000 manats). Employers who fail to make payments for the first time may avoid administrative liability by fully compensating for the resulting damages.

Employers mandated by the Law on Mandatory Insurance Against Loss of Occupational Capacity Resulting from Workplace Accidents and Occupational Diseases are also recommended to conclude compulsory insurance agreements for relevant risks. Otherwise, under Article 469.2 of the Code of Administrative Offenses, failure to conclude mandatory insurance for workplace accidents and occupational diseases will result in fines of 1,500 manats for officials and 5,000 manats for legal entities.