- Overview: Russia
- Global HR Compliance
- Global PEO and payroll
- Work permit for hiring expats via PEO
- Expand without a company set up
- Contractor vs. employee: which is better?
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.
#1 – Contract of employment
There are two main contract types in Russia: contract of employment of temporary duration (usually not more than 5 years) and contract of employment of indefinite duration. Contracts are drawn up by both parties of employment and must include among other things the necessary information about the job, including the type with the end date if it’s a fixed-term contract, positions to be held and responsibilities, commencement date, required hours of work, trial period (if necessary), and the remuneration package. All employment contracts must be in Russian, though any other language is allowed alongside it.
#2 – Minimum statutory employment rights
# Hours of work
By law full time workers should not work more than 40 hours per week. Special preference is given to pregnant employees, employees who are under 18, handicapped, etc. who are allowed to work less than 40 hours a week.
# Probationary period
Having a probationary period is not compulsory in Russia. Also, not all workers are entitled to be placed on probation. Employees whose contract are for less than 2 years, who are pregnant or have a child who is under 18 months of age to care for, or who are below 18 years are not eligible for probation. Typically, probationary period is fixed at any time up to 3 months or 6 months for top-tier management positions. The employer can terminate the employment contract if he/she is not satisfied with the employee’s performance. However, he must ensure to have adhered to all the rules stipulated in the labor code before he can validly terminate the contract otherwise he/she might be forced to re-employ the employee. Probationary employees are entitled to a monthly salary, however, the amount paid is usually less than the normal salary.
# Annual vacation
All employees are entitled to a time off during the 12 national holidays plus 28 days paid leave yearly. Annual leave entitlement begins from the 6 months of an employee’s job commencement. Annual vacation can be accumulated and used at any time the employee deems fit. Also, it can be postpone by the employer but not more than 2 successive years, if he fills that allowing it at a given time will interrupt the usual business operations.
# Parental leave
Pregnant employees have the right to a paid leave of 140 days, equally divided before and after child delivery. Maternity leave extension is allowed up to 194 days -84 during pregnancy and 110 after delivery, in the case of multiple childbirth. These benefits are possible only after the employee had obtained of a medical certificate. Maternity leave can be extended till the child is up to 3 years of age.
# Sick leave
Sick employees must provide a sick note from their doctor if they have been away from work because of sickness to benefit from the sick leave entitlement. Sick leave benefits are divided between the employer and the Social Insurance Fund, leaving the first 3 days pay for the employer and the rest for the Social Insurance Fund. The amount entitled to varies, depending on the length of the employees’ service in the company. Employees who have been in an employment for about 5 years are entitled to 60% of their average salary, between 5 and 8 years – 80% and over 8 years – 100% of their average salary.
Russian labor code is not very generous with the subject of overtime. Not all workers can work overtime. Those who are permitted by law to work overtime can do that mostly after they have given their written consent to do so. Overtime is limited to work not more than 4 extra hours in a 2 consecutive days and 120 hours throughout the year. Employees who work overtime are entitled to a minimum rate of 150% for the first 2 extra hours and 200% subsequently. Similarly, employees are entitled to their double wage should they work during any of the officially approved national holidays.
# Statutory minimum salary
Since 1 January 2018 the minimum statutory salary is 9,489 ruble ($164) per month. Salaries are usually paid at least 2 times a month in the local currency, through a bank transfer.
# Employment termination
Labor contract can be terminated for any of the reasons laid out in the labor code provided the employee does not fall under the category of pregnant women, employees who are on maternity, parental, or sick leave. These set employees can only be terminated on account of liquidation. In most cases, employees’ contracts are usually terminated on the basis of unsatisfactory performance or redundancy. In the case of redundancy, the employee is entitled to at least 2 weeks up to a month notice period before the termination date and at least a month to three months’ severance pay. Also, employers must ensure to follow all the termination procedures stated in the labor code for the contract to be legitimate. In the event of an unfair dismissal, a dismissed employee can be entitled to either indemnity for any recorded damages, compensation for the duration of time absent from work or re-employment.
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.