By Lia Avagyan
The Armenian government has proposed reducing the standard workday from eight hours to seven and the weekly work schedule from 40 hours to 35, all while maintaining current salary levels. This initiative, put forward by the Ministry of Labor and Social Affairs in December 2024, is now under internal discussion following public consultations on the government’s e-draft platform.
Deputy Minister Ruben Sargsyan believes that while the transition may be challenging, it could ultimately lead to a more dynamic and sustainable labor market. “Experience has shown that fears about economic decline did not materialize in other countries that introduced reduced working hours, and in fact, their economies continued to grow,” he says.
The proposal is inspired by the experiences of developed European nations such as France, Spain, Germany, and Sweden. According to the government, reducing working hours by one hour per day would enhance the balance between work and personal life, improve the overall quality of life, and stimulate job creation in both the public and private sectors. Advocates argue that a shorter workday can lead to a more motivated workforce, increased productivity, and reduced burnout, ultimately benefiting the economy.
However, some experts remain skeptical. According to Armine Petrosyan, a senior researcher at the ACSES Analytical Center, studies indicate that implementing this plan in its current form may not be ideal for Armenia. She suggests that a phased approach, which has been successfully implemented in multiple countries, might be more suitable.
“For instance, France, which is often cited in these discussions, implemented its reduction gradually. Initially, it applied only to companies with 20 or more employees before eventually extending to all salaried workers. Additionally, the French government introduced incentives and subsidies for employers to ease the financial burden associated with maintaining salaries while reducing working hours,” Petrosyan explains.
Questioning international comparisons
ACSES has prepared a policy paper analyzing the feasibility of reducing working hours in Armenia. Petrosyan argues that the draft proposal frequently references international examples in ways that may not be entirely applicable to Armenia’s specific economic conditions. Countries like Belgium, Iceland, and Germany are cited as models, yet their standard workweek remains 40 hours, with shorter hours only being common in certain companies or industries. The application of such policies varies significantly depending on economic structures, labor market flexibility, and government support mechanisms.
Another key argument for the reform is research by the World Health Organization and the International Labour Organization, which states that long working hours negatively impact both physical and mental health. However, Petrosyan highlights a crucial discrepancy: these studies focus on individuals working 55 or more hours per week, whereas Armenia’s debate centers on reducing a 40-hour workweek to 35 hours.
According to the ILO’s 2021 data, only about 9.5% of salaried workers in Armenia work 49 hours or more per week. Using these studies as the primary justification for the reform raises concerns about the applicability and accuracy of the arguments presented.
Concerns over informal labor and business impact
A major concern is that the reform could push more work into the shadow economy. Employers might informally require employees to stay longer while officially recording fewer hours. The shift to a shorter workweek could also lead some businesses to hire additional staff to compensate for reduced working hours, potentially increasing operational costs. While the ministry acknowledges this risk, it advises employees to report violations to the Health and Labor Inspection Body in such situations.
Another consideration is the potential impact on Armenia’s competitiveness. Some industry leaders argue that shorter working hours could reduce efficiency and productivity in labor-intensive sectors such as manufacturing and services. The added burden of maintaining full salaries while reducing work time might discourage foreign investment and put pressure on small and medium-sized enterprises (SMEs), which form the backbone of the Armenian economy.
Could the reform affect business and the economy?
Petrosyan points out that reducing working hours affects the economy in multiple ways, including its impact on production and output levels.
Research by ACSES indicates that in 2023, Armenian employees worked an average of 42.1 hours per week—1.2 hours more than in 2018. Moreover, employees with standard 40-hour contracts actually worked an average of 44.4 hours per week, exceeding the legal limit by 11%. This suggests ongoing violations of labor rights in the country. The think tank’s analysis does not confirm that a nationwide reduction in working hours would necessarily lead to increased productivity, although it acknowledges that some individual companies may benefit.
Furthermore, economists warn that reducing working hours while maintaining salaries could lead to inflationary pressures. Businesses might increase prices to offset higher labor costs, which could, in turn, erode any financial benefits gained from a shorter workweek. In countries where work-hour reductions have been successful, such as Sweden and the Netherlands, the transition was carefully managed through productivity-enhancing policies and targeted financial support.
The Ministry of Labor and Social Affairs plans further discussions with businesses and industry associations. Based on the outcomes of these consultations, a final decision will be made on whether to implement or postpone the reform.
While the government sees this initiative as a step toward modernizing Armenia’s labor policies, questions remain about its feasibility and economic impact. Whether the shorter workweek will truly lead to greater efficiency and a better work-life balance—or whether it will create new economic challenges—remains to be seen.
Read the article in Armenian.
