Employ Candidates Compliantly in Russia

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  1. Overview: Russia
  2. Global HR Compliance
  3. Global PEO and payroll
  4. Work permit for hiring expats via PEO
  5. Expand without a company set up
  6. Contractor vs. employee: which is better?
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Global HR Compliance in Russia

If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in Russia Guide below will help you understand the nuances of labor legislation in the country.

There are two main reasons for companies hiring foreign workforce:

  • Expanding into foreign markets to sell company product or products there. In this case, companies hire sales representatives who would exclusively represent their product in the target market and sell it to their local client base.
  • Hiring the right foreign talent with a unique expertise, often related to IT sphere that cannot be found in the home country or that costs less compared to local specialist with similar skills.

After you have found the right candidate, the question is how to hire and provide compensation to this person so you as a business remain 100% compliant when working with global workforce. Another thing to consider is whether you want to keep the talent long-term and how you can do that.

If you need to hire foreign workforce in Russia so you can expand there, then our Global Employer of Record solution may be of help. We help you legally hire and reward your foreign workforce by making them employees via a global employment outsourcing service. This is simple as employ your in-house workforce with the only difference that workers can live anywhere in the world and Acumen International would be their legal employer on your behalf. This means we would bear all employment risks, not you. Also, we manage bonuses, vacations, sick leave and can rent the office and a car for your foreign sales representatives if that is what you need.

With our solution, you can test new foreign markets before deciding whether you are going to get established there. You gain flexibility and expand with reduced costs, and easily withdraw from the unattractive countries.

We are experts in global workforce employment in Russia, and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.

Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.

With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Russia.

See the guide below for a general overview of labor rules and regulations in Russia. Or contact us if you need to employ workers in Russia or would like to get more details.

Hiring and Firing Workforce in Russia Guide

The relationship between an employee and an employer in a contractual agreement is regulated mainly by the Labor Code of the Russian Federation. Based on this labor code, both the employer and the employee have certain statutory minimum rights and responsibilities that must be adhered to for the continuation of the contract. Below are the basic components of the labor code that you should know about conducting business in Russia.

# Employment Agreements

Employment contracts may be concluded:

  • For an indefinite period 
  • For a specified period of not more than five years (fixed-term employment contract), unless otherwise specified by this Code and other federal laws.

A fixed-term employment contract is concluded when an employment relationship cannot be established for an indefinite period taking into account the nature of the work ahead or the conditions for its implementation. If the term of the contract is not specified in the employment contract, then the contract shall be deemed concluded for an indefinite period. In the event that neither of the parties requested termination of the fixed-term employment contract due to the expiration of its term and the employee continues to work after the expiration of the validity of the employment contract, the condition for the urgent nature of the employment contract is null and void and the labor contract is concluded for an indefinite period. An employment contract concluded for a specified period in the absence of sufficient grounds for that established by the court shall be deemed concluded for an indefinite period. It is forbidden to conclude fixed-term employment contracts in order to evade the granting of rights and guarantees provided for employees with whom an employment contract is concluded for an indefinite period.

# Employment Termination and Severance Pay (Dismissal)

An employee has the right to terminate a labor agreement. Employee must warn employer about termination of the agreement in written form at least two weeks prior to termination. A labor agreement can be terminated before the expiration of the withdrawal notice period upon mutual agreement between an employer and an employee. In cases, when request of an employee for termination of a labor agreement (voluntary withdrawal) is caused by events that prevent the employee to continue performing job functions (retirement, enrolment to an educational institution and other cases), and in cases of violation of laws and other legislative standard acts that contain norms of labor laws, terms of collective agreement, accord or labor agreement by an employer, employer must terminate a labor agreement in term specified in request of the employee.

# It is prohibited to dismiss

The following categories of employees are protected from dismissal on all but a limited number of grounds, which are specified in the Labour Code:

  • Pregnant women
  • Women with children under three years of age
  • Single mothers raising children under 14 years of age
  • Single mothers raising disabled children under 18 years of age 
  • Employees raising motherless children under 14 years of age
  • Employees raising motherless disabled children under 18 years of age
  • Employees being the sole wage earners of families with disabled children under 18 years of age
  • Employees being the sole wage earners of families with children under three years of age.

# Notice period

There is no legal obligation for the termination to be with notice. However, notice is required for specific cases, such as redundancy, termination of a fixed-term contract, and dismissal owing to the closure of a business. Payment in lieu of notice is possible in the context of termination due to a staff redundancy. For example, the employer must notify an employee in writing about the upcoming expiry of the term of the fixed-term employment contract at least three calendar days before the expiry date.

# Severance payments

The Labour Code entitles an employee to a severance payment upon termination of employment in limited cases. The amount to be paid depends on the reason for the termination. A severance payment of an amount equal to an average monthly wage is paid following a dismissal owing to an employer’s liquidation, staff reduction or elimination of job positions. In addition to this severance payment, an employee is also entitled to be paid an average monthly wage until he or she finds alternative employment, but this will only be paid for two months.

# Employee Benefits and Contributions

Mandatory benefits required by law to be provided by an employer

  • Compulsory Health Insurance
  • Mandatory Accident Insurance covers accidents happening at work (during working hours)
  • Statutory Pension Insurance
  • Statutory leaves and allowances
  • Additional days off are mandatory and, according to the labor law, employees are granted additional days off due to work on weekends or public holidays.

# Probationary period

Employment contracts may contain provisions about a probationary period. When entering into an employment contract, the parties may agree on a probationary period in order to test the employee’s fitness for the work to be performed. The terms of the probationary period are to be included in the employment contract. The probationary period may not exceed three months for regular employees or six months for the CEO.

# Overtime

An employer may only request that an employee work longer than the established work schedule if it has received consent in writing from the employee, except for special emergency cases.

# Work hours

In general, the Labour Code provides for a maximum 40-hour working week. A number of categories of employees are permitted to have a reduced work schedule. The maximum number of hours that an employee can work in a day is not specified, except for certain categories of employees. Generally, an employer establishes the duration of the working week, the maximum daily hours of work permitted, and other work scheduling matters. However, a standard daily shift usually does not exceed eight hours, owing to the five-day working week.  Night shifts are deemed to be between 10 pm and 6 am and are one hour shorter than day shifts, unless otherwise specifically established by Russian law.

# Annual Leave

Employees are entitled to annual vacations during which their employment is to be reserved for them, and their average earnings continue to accrue to them. Employees are to be granted basic annual paid vacation of 28 calendar days. Basic annual paid vacation of more than 28 calendar days is to be granted for some categories of employees. The employment contract may provide for longer basic annual paid vacation.

# Sick Leave

Russian law does not distinguish between paid or unpaid sick leave. In all cases, upon return to work, the employee must provide the employer with a sick leave certificate issued by a physician confirming his/her justified absence from work. Sick pay for periods of temporary disability is based on the employee’s average salary over the previous two years and is calculated based on the length of service and number of sick days.

# Parental Leave

Maternity rights

Paid maternity leave starts to accrue no later than 70 calendar days prior to a birth, and continues to accrue for an additional 70 calendar days following the birth. This is increased to 86 calendar days in the case of a difficult childbirth and to 110 calendar days in the case of the birth of two or more children.  The parents are entitled to parental leave, which starts immediately after the maternity leave and lasts until a child reaches the age of 18 months. Once a child reaches 18 months, the parents are entitled to take leave until the child reaches the age of three years. All leaves can be divided into parts, but cannot be taken by both parents at the same time.

Paternity rights

Fathers are entitled to childcare leave till the child reaches 1.5 years if they are the child’s carer. The allowance is covered by the Social Security Fund. However, only one parent is allowed to take childcare leave.

Knowing about this employment code and complying to them can be very demanding and daunting. However, Acumen International has designed a short cut that can help alleviate this seemingly impossible situation. Signing in to her express global employer of record solutions will lead you more than halfway to achieving your goals of doing business in Russia.

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