Labour

Labor market 

The population of Mongolia is over 3,4 million as of the end of 2022 with high literacy rate. The employed labor force is over 1,15 million among the total labor force, which is 1,2 million. Compared to Q1 of 2022, it has decreased by 1.5%. 

Source: National Statistics Office

In Mongolia, 26% of the labor force works in agriculture, forestry, fishing and hunting sector. When looking at the sectors with the largest decrease in employees compared to the same period in 2022, the number of employees in the processing sector decreased by 14.4%, in the construction sector by 16.5% and in the transportation and storage sector, declined by 17.9%. 

Source: National Statistics Office

Source: National Statistics Office

Source: National Statistics Office

The highest average salary is observed for plant and machine operators and assemblers which is equal to 2,282,200 MNT (approximately 660 USD). At the same time, the lowest is 887,900 MNT (approximately 260 USD) for skilled agricultural, forestry and fishery workers. 

Source: National Statistics Office

Skills

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

The National University of Mongolia (NUM) is the country’s oldest. It hosts twelve schools and faculties in Ulaanbaatar, and runs branches in Orkhon and Zavkhan. Approximately one third of those Mongolians with university degrees, 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 institute of Polytechnic the Polytechnic Institute, the Institute of Russian Language, and the Institute of Physical Culture. 

UNESCO estimates that there were just under 10,000 Mongolian students enrolled in higher education abroad in 2012. Leading destinations included South Korea, Russia, the USA, Japan, and Turkey. There is also a network of vocational training for high skills 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 skills 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 enhancing the employability of Mongolian workers. 

Improvement should be made to 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 programmers, and the 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 labor market. 

Employment contract 

The Labor Law was revised and adopted in July 2021 and become effective from 1 January 2022. The Labor Law is the key legislation regulating employment relationships in Mongolia. The Labor Law has a  territorial application and applies to employment relationships arising from work performed or services provided in the territory of Mongolia.  

Employment contract type 

There are eight types of employment contract. 

1. full-time employment contract 
2. part-time employment contract 
3. probation contract 
4. internship contract 
5. apprenticeship contract 
6. employment contract with special conditions 
7. work from home contract and  
8. remote work contract 

Employment contract key terms 

The employment contract must contain job title, work and duties to be performed as specified in the job description, place of work, remuneration, and working conditions.  

Employment contract duration 

The employment contract can be concluded either for an indefinite term or a fixed term. However, certain conditions apply for concluding fixed term contracts.  

Probation period 

The probation period is up to 3 months subject to potential extension of up to 3 months as agreed by the parties. The key purpose of the probation period is for an employer to test/verify whether the employee meets the requirements of the job position. 

Working hours 

The Labor Law sets the standard working hours and overtime limitations. 

Day offs and Holidays 

An employee is entitled to take annual leave and days off as per the Labor Law. 

 Annual leave 

The minimum annual leave is 15 business days. For minors and employees with disabilities, the minimum annual leave is 20 business days. Depending on the length of employment, additional days are granted. 

Public holiday 

An employee is entitled to take paid public holiday leaves. 

Work permit 

A work permit (including pre-work permit and the work permit) can be processed through a Work Permit portal https://avah.hudulmur-halamj.gov.mn/#/ However the portal is not fully functional yet. Therefore upon submission of the work permit application in this portal, the employer is required to submit hard copies of supporting documents with the LSWA. It takes usually 10 business days for issuing a work permit. Upon granting of a work permit, the local employer is required to pay a monthly workplace fee, equal to 2 times the minimum wage per a foreign employee. The Cabinet may exempt eligible employers from the workplace fees depending on size and importance of projects or government funded projects by issuing a resolution. 

Wages 

Salary consists of base salary, extra pay, additional pay, bonuses and annual leave salary. 

Base salary 

Base salary is agreed by parties of employment contracts. The base salary must not be lower than the minimum wage.  

Overtime Work, Night time Work, and Holiday work pay 

An employee is entitled to additional pay in case of working overtime, night hours, or public holidays unless time off in lieu is provided. Additional pay is calculated differently depending on the nature of non-standard work as follows:  

1. 1.5 times the average salary for the overtime work;  
2. 1.2 times the average salary for the night time work; and  
3. 2 times the average salary for the public holiday work. 

Salary payment 

Salary shall be paid in national currency. 

Date of payment 

Monthly salary shall be paid in two installments on fixed days. 

Social security 

The Mongolian Social Security System (Social Security) provides pension, health, disability and unemployment services, amongst others. Participation in Social Security is mandatory for all Mongolian nationals, foreigners and stateless persons who are employed within the territory of Mongolia. 

Rates 

Both employers and employees are required to pay social security contributions, at rates which are established by the Social Insurance Law of Mongolia. Employers are responsible for withholding social security contributions and transferring them to relevant authorities on a monthly basis. 

Social security benefits 

Workers who have contributed to Social Security are eligible for social security benefits. Pension benefits are paid to a worker or the worker’s family upon their retirement, disability or death. Similarly, aid benefits are paid to a worker or the worker’s family upon disability, pregnancy or death. The amount of benefit paid to a beneficiary can depend on a variety of factors, including the salary of a worker and the number of years he or she contributed to Social Security. Health benefits are paid in case of a worker’s illness. 

To access healthcare at a state hospital, employees need to provide evidence of their contributions.