Labour

Population

Mongolia has a population of 3,278,290 people, of which, according to the labour force survey, the total economically-active population (EAP) is 1.2 million. The EAP has split 46.3 percent women and the 53.7 percent men. 56.9 percent live in urban areas. The EAP is growing at a rate of 2.6 percent a year.

64.67 percent of the total population are under 35 years of age. Specifically, 30.05 percent or 937,518 of the total population are children aged 0-14 years, 63.82 percent or 1,991,183 people aged 15-59 and 6.13 percent or 191,234 are seniors aged 60 and older.

In the fourth quarter of 2016, unemployment stood at 10.0 percent, an increase of 1.4 percentage points on the previous year.

• Total life expectancy at birth in Mongolia is 68.3 years +
• Literacy among the adult population is 98.6 percent +

Skilss

Mongolia’s school system lasts twelve years with school entrance age at six. In Ulaanbaatar and cities like Erdenet there are private schools, though of mixed quality. Ulaanbaatar also has some foreign-language public schools, for example for Russian, Chinese, Turkish, English, and German.

The National University of Mongolia is the country’s oldest. It hosts twelve schools and faculties in Ulaanbaatar, and runs branches in Zavkhan and Orkhon. Approximately one third of Mongolians with university degrees have graduated from NUM. Mongolian State University is the next biggest, with about 4,000 students.

There are seven other institutions of higher learning: the Institute of Medicine, the Institute of Agriculture, the Institute of Economics, the State Pedagogical Institute, the Polytechnic Institute, the Institute of Russian Language, and the Institute of Physical Culture.

In addition, UNESCO estimates that there were just under 10,000 Mongolian students enrolled in higher education abroad in 2012. Leading destinations include South Korea, Russia, the US, Japan, and Turkey There is also a network of vocational training for highly skilled workers, such as machinists, heavy-equipment operators, and construction workers.

The Ministry of Education and Science, often in conjunction with NGOs and outside government organizations, has implemented non-formal distance education programs promoting basic skill development. About 100,000 of Mongolia’s 1,200,000 adults are taking part in some form of distance education. In Mongolia, surveys of Mongolian employers reveal key issues as enhancing the employability of Mongolian workers.

Improvement should be made in basic education and reducing the drop-out rate. For secondary and tertiary education as well as vocational training, better links need to be established between education/training programmes and skills and knowledge required by enterprises. The government’s response has been to create a national council on vocational training, skills standards and certification, involving key stakeholders to support skills development and link it to the demands of the labour market.

Employment contract

The Labour Law, 1999, known as the labour code governs labour relations, health and safety requirements, minimum wage levels, and maximum hours of work regulations, collective employment agreements and resolution of employment disputes. Additional labour laws also form part of the regulatory framework and are attached below.

Key features are:

• The ordinary work week is 5 days and 40 hours, with special provisions for seasonal shift work, such as extractive industries or agriculture.
• Basic annual vacation for workers is 15 days, increased both for additional years of service and work under difficult conditions.
• Employment contracts may be either permanent, fixed term or temporary.
• Overtime is reimbursed at the rate of at least 1.5 times the standard rate of pay.
• Deductions from worker’s pay, other than for income tax and child support are limited to 20% of gross monthly wages.
• An employee may resign with 30 days’ notice.

Expatriate employees and work permits

Investors may obtain work permits for expatriate employees subject to a quota defining the percentage of expatriate to local employees (see attached document). For most sectors, this quota stands at 5 percent, although up to 80 percent in some extractive sectors. Obtaining work permits within the quota is significantly easier than outside the quota. See document on quotas for more details.

To obtain a work permit:

• An employer applies to the Ministry of Labour with a copy of the employee’s contract and a letter justifying the need to bring an expatriate worker.
• Upon approval of the permit, the Ministry of Labour informs the Immigration Department.
• The employee must then, within 90 days, apply for a single entry visa at the nearest embassy.
• On entering the country, the employer must, within seven days, bring the employee’s passport to the Immigration Department to be stamped.
• The employer must then recontact the Ministry of Labour, which issues a letter defining the duration of the permit (up to one year renewable).
• The employer then returns to the Immigration Department, with the letter, to apply for the employee’s Certificate of Alien Registration, which takes the form of a smart card.

If the employee needs to travel out of Mongolia, the employer must bring the passport to the Immigration Department to apply for an exit and re-entry visa. The process takes three days, although it is now also possible immediately at the airport prior to the flight. There is a monthly fee of 384,000 MNT for work permits. Exemptions to this fee are provided in the box below.

The CEO and owners of a BEFI do not need to obtain work permits in order to work in Mongolia. They may instead obtain an investor’s card from the National Registration and Statistical Office and a T visa, which exempts them from the workplace fee. Neither the quota nor the monthly fee apply to expatriate workers in free zones.

The law on the rights of foreign workers states that expatriate employees shall have equal rights before the courts and the law as Mongolian workers.

All expatriate employees, apart from employees from embassies or organizations set up through special treaties, must be paid in local currency through a bank account in Mongolia (as per the Law on Conducting Settlement in National Currency, 2009). They may then freely transfer their salaries overseas.

Exemptions from the workplace fee

The following are exempt from the workplace fee:

• Workers and families of workers of foreign diplomatic missions in Mongolia;
• Workers and families of workers of international organizations (UNDP, WHO etc.);
• Foreign specialists, professors and advisers who work under contract in the education sector;
• Specialists and workers who work under contract between governments;
• Volunteers who work under contract with the Mongolian government organizations;
• Workers of non-profit organizations conducting activities with legal permission;
• Up to three representatives of investors, members and headquarters of foreign invested entities.

Wages

The table below presents some typical salary ranges paid by foreign investors in Mongolia. For information, the minimum monthly wage is 320,000 MNT (as of 2019).

In April 2017, the National Tripartite Committee on Labor and Social Consensus convened to increase the minimum wage by 25%, setting it at 320,000 MNT. The new minimum wage will be implemented starting from January 1, 2019, with an hourly rate of 1,428 MNT. Around 4-5% of the Mongolian workforce earns the minimum wage, and members of the committee believe that the increase is one way to help citizens improve their living standards.

Indicative wages

Social security

Mongolia’s social security system provides a number of benefits to employees. It is funded from employer and employee contributions set out in the table below and which are tax-deductible. Employee contributions are capped at 192,000 MNT a month.

All employers must register at the Social Insurance General Office.

Social security benefits include the following:

• Pension benefit of 45 percent of the last monthly salary is paid after 20 years of service, increased by 1.5 percent for every additional year worked. Invalidity and survivor’s elements are also provided.
• Health benefits starting the 7th day of illness (the previous six days are covered by the employer) and extending to the 78th or 156th day of illness depending on illness type.
• Maternity benefit for three months paid at 70 percent of salary.
• Unemployment benefit at between 45 and 70 percent of salary for 76 working days.
• Invalidity benefit resulting from a workplace accident or illness calculated as a percentage of the salary according to the severity of the invalidity. Additional benefits for eligible dependents in case of death.

Social security contribution rates