The proposal by Armenia's Ministry of Labor and Social Affairs to reduce the workweek from 40 to 35 hours and daily work hours from 8 to 7 has sparked heated debate between the business community and labor unions.
The initiative, published on the official legal acts portal, suggests maintaining the current minimum wage level despite the reduced working hours.
Businesses Warn of Economic Risks
The Mantashyants Entrepreneurs’ Union strongly criticized the proposal, pointing to a lack of thorough impact assessment. According to the business community, the initiative lacks sufficient scientific justification and poses significant risks to the economy and the development of human capital.
Entrepreneurs highlight that no quantitative analysis has been conducted on how the reform would affect GDP, current and future household incomes, company competitiveness, various economic sectors, and tax revenues.
Businesses also warn of potential wage reductions, as many organizations may struggle to maintain current pay levels under shorter working hours. Companies that retain salaries could face increased production costs, potentially driving inflation and disproportionately affecting vulnerable populations near the poverty line.
Another concern is the Ministry’s rationale, which compares Armenia to countries with significantly higher GDP per capita. In nations with comparable GDP per capita levels ($7,000–15,000), such as Turkey, Kazakhstan, Mexico, Argentina, Uzbekistan, and Georgia, the workweek typically ranges from 40 to 48 hours.
Entrepreneurs also raise the issue of labor law compliance, arguing that the proposed changes could give unfair advantages to unscrupulous companies that disregard legal requirements.
Unions Advocate for Social Benefits of the Reform
Conversely, the Confederation of Trade Unions of Armenia fully supports the draft law, emphasizing the need to improve workers' quality of life.
Unions argue that reducing working hours will help preserve employees' mental and physical health, allowing them to recover more effectively and ultimately boost productivity.
They highlight that overwork is a serious issue, particularly in the context of low wages and high inflation. Workers often bear double workloads, including covering for colleagues on leave, without appropriate compensation.
Unions also point out that modern technologies enable the same amount of work to be completed in less time and that long workdays contribute to increased workplace accidents and occupational illnesses.
They note that recent GDP growth in Armenia has been driven more by effective migration policies and other factors than by longer working hours. Additionally, they stress the persistent issue of "working poor" individuals — those who remain unable to achieve a decent standard of living despite full-time employment — in a country where GDP per capita was $8,700 in 2023.
Unions argue that only fair working conditions and equitable social policies can ensure the country's stability and security.
The Eight-Hour Workday Model is Outdated
The Ministry of Labor and Social Affairs, which initiated the reform, draws on the experience of developed European nations and argues that the eight-hour workday model, established in the 19th century, is outdated in the era of widespread automation.
The Ministry believes that reducing working hours will not only improve labor productivity and workers’ quality of life but also create additional jobs in both the public and private sectors.
