Russian Federation: Terms And Conditions Of Employment

1. What are the main sources of Russian employment law?

The Labor Code of the Russian Federation (as amended) (the Labor Code) establishes the basis of employment relations in Russia. In addition, employment relations are regulated by the Constitution of the Russian Federation (the RF or Russia), federal laws and laws of the RF constituent regions, other normative acts, collective bargaining agreements, and an employer's internal regulations.

Russian labor law applies to all employees working in Russia (i.e. Russian citizens, foreign citizens, stateless persons). In addition to the Labor Code, the labor status of foreign citizens and stateless persons is regulated by Federal Law No. 115-FZ "On the Legal Status of Foreign Citizens in the Russian Federation", dated July 25, 2002 (as amended).

2. Do employment agreements have to be in writing?

Yes, an employment agreement must be in writing - i.e., signed by two parties in two originals, with one retained by the employer and one by the employee. An employer must execute an employment agreement with the relevant employee within 3 (three) business days of the employee commencing work. An employment agreement which has not been properly documented, for any reason, is considered to have entered into force if the employee has started working at the instruction of his employer (or that of his representative).

3. What are the types of employment agreements?

Employment agreements may be:

• Open-ended.
• Fixed-term but not exceeding 5 (five) years.

The general rule is that employment agreements must be entered into for an indefinite term. Fixed-term employment agreements may be entered into in a limited number of cases, as specified expressly in Article 59 of the Labor Code. Specifically, a fixed-term employment agreement may be concluded where an open-ended employment agreement is impossible (e.g. substitution for an employee who is absent temporarily, seasonal work, etc.) or by agreement of the parties with certain categories of employees (e.g. with a general director or chief accountant).

4. Are there any mandatory terms that must be included in an employment agreement and if so, what are they?

Yes, there are certain mandatory terms to be included in employment agreements (Article 57(3) of the Labor Code), namely:

• The employee's place of work.
• The employee's job function (with job description).

• The date of commencement of work or, if it is a fixed-term agreement, the effective period and the grounds for concluding a fixed-term employment agreement.
• The terms of remuneration.
• Working hours and breaks.
• Conditions at the workplace.
• Compensation for working under harmful (hazardous) conditions (if applicable).
• The nature of work.
• Terms of mandatory social insurance for the employee.
• Other terms and conditions contained in the employment law and other regulatory legislative acts containing employment law provisions.

In addition, employment agreements with foreign individuals must contain information on their (i) work permit, and (ii) voluntary medical insurance agreement (policy) valid within the RF territory.

5. Can a civil law contract be concluded with an individual, rather than an employment agreement? What is the difference between employees and contractors?

No. The Labor Code prohibits companies from concluding civil law contracts for the purpose of regulating employment relations (Article 19.1 of the Labor Code). Violation of this prohibition may result in imposition of an administrative fine of up to RUB 100,000 on a company and of up to RUB 20,000 on a company's official.

It is necessary to distinguish between employees and contractors, i.e. individuals entering into civil law contracts for the purpose of regulating civil relations. There are a number of criteria for this distinction: (i) whether the employer's internal labor regulations apply or not; (ii) whether there are provisions providing for a payment procedure similar to the payment procedure of employees; (iii) whether any guarantees or other privileges (e.g. vacation, overtime payments, sick pay) are applicable; and (iv) whether automatic renewal of the civil law contract is possible at the end of the initial term.

A civil law contract may be reclassified as an employment agreement on the basis of a court decision or of a labor inspection order if it is found that "actual employment relations" were concluded between the parties to a civil law contract.

6. What statutory rights does the Labor Code provide to employees?

The Labor Code establishes mandatory minimum rights, guarantees and benefits for all employees, which apply irrespective of whether they are included in the relevant employment agreement. Any terms of an employment agreement that impair an employee's statutory rights, guarantees and benefits are not valid.

The Minimum Wage

An employee's salary must be paid in rubles no less than twice a month. A monthly salary may not be lower than the minimum monthly wage established by the RF law. There is a two–level system of minimum monthly wages: on the federal level (RUB 6,204 in 2016) and on the regional level (e.g. RUB 17,300 in Moscow in 2016).

The 40-hour working week

A normal working week cannot exceed 40 hours, irrespective of whether the employee works a five- or six-day week. Any additional time worked is recognized as overtime. Overtime work must not exceed four hours for each employee in two consecutive days and must not exceed 120 hours per year.

Paid Vacation, Public Holidays and Breaks in Work

Employees are entitled to a minimum of 28 calendar days of holiday per year. In addition, certain categories of employees, such as employees working an open-ended working day, are entitled to additional paid vacation of no less than three calendar days per year. Vacation allowance is to be paid at least three calendar days prior to the vacation.

There are also eight public holidays a year, namely:

• January 1-6 and 8 (New Year's Holidays).
• January 7 (Christmas).
• February 23 (Defenders of the Fatherland Day).
• March 8 (International Women's Day).
• May 1 (Holiday of Spring and Labor).
• May 9 (Victory Day).
• June 12 (Russia Day).
• November 4 (National Unity Day).

If a holiday falls on a weekend, the next business day after the public holiday will usually be a paid day off. All employees must be provided with days off (two days off for a five-day week, and, one day off for a six-day week). Employees must be given a break for rest and meals during the working day. This break must not be less than 30 minutes and not more than two hours per day.

Paid Sick Leave

Employees are entitled to receive sick leave compensation for periods of sickness upon providing an employer with a medical certificate. An employer is obliged to pay an employee sick leave compensation for the first three days of sick leave only. Compensation for subsequent sick leave days is paid by the RF State Social Insurance Fund. The amount of sick leave compensation depends on the grounds for sickness, term of employment and the employee's average salary.

7. What employment–related documents must the employer adopt?

The Labor Code requires that the employer must issue a number of employment-related documents, namely:

Internal regulations and policies. Currently, there are 6 (six) mandatory internal regulations:

• Internal labor rules and regulations.
• The employee remuneration system regulation.
• The regulation on processing personal data.
• The labor safety regulation.
• The staff schedule.
• The vacation schedule.

Internal orders on any matter related to employment

(e.g. when an employee is hired, granted a vacation, paid a bonus, disciplined or dismissed, and in certain other cases).

8. In what cases may a probation period be established? What is the maximum term for a probation period?

A probation period is optional. The Labor Code stipulates the following maximum terms with respect to probation periods:

• No more than 6 (six) months for the general directors/ heads of a company/branch office or a representative office (and their deputies), chief accountants (and their deputies).
• No more than 3 (three) months for other employees.

The term of the probation period must be expressly specified in the employment agreement.

Some categories of employee cannot be subjected to a probation period, namely:

• Pregnant women.
• Women with children younger than one and a half years.
• Students within one year of graduation from a university or institution of secondary education.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.