Introduction
Russia is a federative state with 85 constituent areas (federal cities, republics, regions, and other territorial administrative components) with specific legislative rights. Employment concerns fall under the Federation’s and its constituent parts’ joint competence. The Russian Federation’s Labour Code, which is applicable throughout the country, controls employment rights in Russia.
Who is covered by the Employment Act?
The Employment Law in Russia is based on the Russian Labor Law, established in February 2002. The Russian Labor Law establishes an employee’s and an employer’s rights.
The Employment Law Russia guide applies to all types of businesses, domestic and international, and all employees, regardless of citizenship. In addition, the Russian Labor Law recognizes the following sorts of workers in compliance with international employment regulations:
- Employees who are employed directly by a corporation
- Independent contractors
- Employees who work for an agency
Employment Contract
Listed below are some of the essentials of an employment contract in Russia:
Minimum Requirements
Employers in Russia are required to engage in written employment contracts. An implicit employment contract exists if an employee is admitted to work without a written employment contract (de facto employment).
Also, if an employee is hired without an employment letter, there is no requirement for a probation period. A job contract is typically accompanied by a job description (a list of essential responsibilities). The following are the minimal terms that should be included in any employment contract:
- The place where the employee will be stationed and will be asked to work from
- The beginning date and the term of the contract, if applicable
- The title of the position for which the job is given
- A mention of the conditions of the workplace
- The compensation and benefits offered
- The exact amount of salary that will be given
- All the terms and conditions regarding the employment like the working hours, termination terms, etc
- Social Insurance
Provisions on probation, non-disclosure of secret information, and other requirements that do not worsen the employee’s situation compared to those granted by law or corporate policy may be included in an employment agreement.
If the contract has provisions less than those promised by law or corporate policies, the contract will be voided.
Fixed Term and Open-Ended Contracts
In Russia, job contracts are typically open-ended. Fixed-term contracts are only permitted in a few circumstances (listed in article 59 of the Labour Code). A fixed-term contract cannot last more than five years.
When you extend or renew a fixed-term contract, you risk being categorized as open-ended. A fixed-term contract does not automatically cease on its expiration date. The employer shall give the employee three days’ written notice of termination and follow the regular termination procedures.
The employee does not need to give notice if they act as a substitute because the contract will end once the replaced employee returns to work. If a fixed-term contract gets extended and there is no guarantee of when the work will end, it will become an open-ended contract by default.
Trial Period
A trial term may be established by an employer who hires an employee. A trial period can be up to three months long. Only the CEO of a Russian firm and their deputies, the chief accountant and their deputies, and the heads of branches, representative offices, and other subdivisions may be subjected to a more extended, 6-month trial.
Specific types of employees, such as pregnant women and women with children under the age of 1.5 years, employees under the age of 18, graduates from state educational institutions seeking employment for the first time within one year of graduation, and so on, cannot be given a trial period. Setting specific criteria for probation to be considered passed is recommended.
Notice Period
The notice periods the employees must serve depend on their duration with the company.
- A 2 months notice period has to be given to an employee laid off by the company. However, the payment can also be provided instead of the notice.
- If the fixed-term contract is about to expire, a 3 days notice can be given to that particular employee.
- If a probation period is unsuccessful, the employee can be terminated by providing a 3 days notice.
If an employee is terminated due to some offense, there are no notice requirements in this case. However, most companies give a 2-day notice in such cases.
Key Provisions of the Employment Act
There are several provisions in the employment act. It is the job of both the employers and the employees to adhere to these provisions.
Minimum working conditions
Employees’ rights to safe working conditions are established under Articles 21-22 of the Labour Code. Employees must follow all labor safety regulations, treat company property with care, and notify the employer immediately if they or the firm are in danger.
Employers must have a Workplace Safety Service or Specialist with the necessary qualifications. Businesses with fewer than 50 employees can outsource such a function. Each workplace must be assessed by a licensed organization and classed based on the level of harmfulness/hazard; identifying the workplace’s class in this regard is a contractual requirement.
Salary
The Federal laws in Russia decide the minimum wage. It is used to calculate various social compensations for which employees are eligible and to guarantee the lowest income given to an employee. According to the employer, employees must be paid equally for the labor of equivalent worth.
The Labour Code in Russia specifies the circumstances in which an employee’s salary should be enhanced. Among these are higher pay for night work, work on days off, public holidays, and any overtime, compensation, and perks provided to employees as a reward for working in dangerous situations.
Salary should be paid twice a month, in two installments, and in Russian Rubles. Russian labor authorities discourage salaries in foreign currencies.
Working hours
In Russia, regular working hours should not exceed 40 hours a week. However, there are different labor codes in Russia regarding different age groups and demographics:
- The people who are below the age of 16 cannot work more than 24 hours per week
- People between 16 and 18 years are not supposed to work more than 35 hours per week
- The 35-hour work limit is also applicable for workers who have a disability
- There is a limit of 39 hours for all medical professionals
- Teachers and other workers in pedagogy should only work up to 36 hours a week
Overtime
Overtime is usually considered any time spent above the usual stipulated working hours. In most cases, an employer can only require an employee to work overtime with the employee’s written approval.
Pregnant women, employees under 18, and certain employees are barred from working overtime under the Labour Code in Russia and other federal laws. Disabled persons, mothers who have children below three years of age, and certain other groups of employees should be advised in writing of their right to refuse to work extra. Overtime work cannot last more than 4 hours for 2 days or 120 hours a year.
Health and Safety
All employers need to provide their employees with safe and healthy working conditions. Several measures must be taken to ensure that the employees are taken care of and are provided with all necessary amenities that a workplace should have. Also, employers must provide all the required gear and equipment in workplaces where safety can be a concern.
Termination of an Employment Contract in Russia?
- Companies cannot fire their employees working under an open-ended contract unless they have a fair and valid reason.
- The employees can be dismissed on personal and economic grounds like mass layoffs, misconduct, forgery, theft, long-term absence unrelated to any work-related illness or accidents, etc.
Penalties
Businesses who refuse to comply with the law are likely to face the following issues:
- Employers may end up in court or in front of an employment tribunal, risking astronomical legal fees
- Employers who break labor laws could face fines and compensation
- Unfavorable publicity could damage the company’s reputation, leading to a drop in revenue and the loss of personnel
- Suppliers and stakeholders may be wary of collaborating with the company
Compliance Strategies for Employers
To comply with Russia’s federal and employment regulations, employers must stay educated about the rules. Managerial training to stay up to date on the nitty-gritty of Russian labor law, labor rules and regulations, and HR policies can help companies stay on top of legal employment issues.
How Can Multiplier Help?
With all of Russia’s labor rules, hiring an HR manager can help ensure that all policies are followed and updated regularly. However, onboarding resources can be pretty cumbersome. This is where a global PEO like Multiplier can make your life easier.
Multiplier will help your business stay compliant with the labor code in Russia. We abide by regional labor and employment rules with solutions like automated employment contract generation, multilingual contracts, and compliant expansion.
We can also handle the payroll, taxes, and benefits for your international teams, freeing up your time and resources for business development and growth.