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Legislation for Foreign Citizens residing in the Russian Federation for the purposes of Business and Labour

Trends in the Development of Russian Labor Law in 2012

 
20.01.2012

Trends in the Development of Russian Labor Law in 2012

· Adjustments made in labor legislation at the end of 2011

· Which legislative initiatives are to be implemented in 2012


At the end of 2011 we witnessed the introduction of several new legislative amendments: several of these amendments to federal law were in the area of labor relations and social insurance. There are even more initiatives that are currently being discussed. In this review we’ll cover several of the changes that will occur or are very likely to occur in labor legislation of the Russian Federation in 2012.

Positive changes in the sphere of social insurance:

In accordance with Article 1 of the Labor Code of the Russian Federation the concept of mandatory social insurance is subject to federal labor laws. For this reason we’d be amiss not to mention important changes in this area.

Amendment 1: Reductioninrates. Thus, in accordance with Federal Law from the 3rd of December 2011 № 379-FZ, as of January 1, 2012 the overall rate of insurance premiums to the Pension Fund of the Russian Federation, Social Insurance Fund of Russia and funds for mandatory medical insurance for the years of 2012 and 2013 have been reduced. Instead of the 34% rate which was previously applied, the new rate is now set at 30% (22% - to the Pension Fund of the Russian Federation, 5.1% - to the Federal Fund of Mandatory Health Insurance, 2.9% - to the Social Insurance Fund of the Russian Federation). However, there is one important nuance. Up until 2012 making payments to an employee over the base limit (in 2011 = 463 000 rubles), calculating the insurance premiums was not necessary. From 2012 as it specifically relates to payments in excess of the limit (which for 2012 is established at 512,000 rubles) there has been an additional tariff applied to the amount of 10%. Contributions under this additional tariff will be applied to the Pension Fund of Russia. We want to make note that, absolutely all categories of insured persons, this amount will be applied to finance part of the pension insurance program (solidary part of the tariff).

Amendment 2: Foreignpensioners. In addition, the new legislation introduces compulsory pension insurance for foreign citizens or for persons without citizenship who are temporarily residing on the territory of the Russian Federation (not having residency status or a temporary residency permit) and who have concluded an employment agreement for an indefinite period of time or for a fixed-term for a period not less than six months. For the years 2012 and 2013 the rate premium for this insurance is set at 22% for amounts under the limit for calculating insurance premiums and 10% for amounts exceeding the limit.

Meanwhile, mandatory pension insurance as it was previously will not be applied to temporary residents in Russia who are classified as Highly-Qualified specialists. The classification of such specialists is carried out in accordance with Russian federal law from 25 July, 2002 № 115-FZ «On the legal status of foreign citizens in the Russian Federation». Consequently, all foreigners who are temporarily residing in Russia, as was the case previously, do not have the right to mandatory social insurance in the event of temporary disability or maternity leave, as well as the right to mandatory medical insurance (free medical care with the exception to emergency medial care).

Medical tests and Underground Work

Amendment 3: Medical tests becoming mandatory. In accordance with amendments made to federal law from 30.11.2011 № 353 FZ (hereinafter – Law № 353-FZ) article 213 of the Labor Code of the Russian Federation, as of 31.03.2012, directly to the Labor Code of the Russian Federation will be included norms for mandatory medical testing (examinations) at the beginning of the working day (work shift), as well as during the work day (or) at the end of the work day (work shift). These medical tests are established for certain categories of workers as determined by the Labor Code of the Russian Federation and other federal laws and regulations of the Russian Federation.

These medical examinations are carried out in particular with the intent for the proper diagnosis and prevention of occupational diseases, as well as for the proper identification of the possible use of alcohol, narcotics or other toxic substances by employees. It is planned that, the carrying out of these medical examinations will be performed during working hours.

Amendment 4: A new special category of employees. Simultaneously, Federal Law № 353-FZ compliments the Labor Code’s new chapter 51.1., which establishes specific labor regulations for workers who are engaged in working underground.

This category includes:

- работников, непосредственно добывающих полезные ископаемых подземным способом,

- workers who are employed in construction or the operation of underground facilities, rescue workers in such facilities, (besides underground facilities where construction is carried out but the facilities remain operational) with the exception of employees working in the operation of the subway.

Persons accepting employment to work in underground facilities should not have any medical predisposition that would prevent them in fulfilling their duties of such work and must meet all professional qualifications as specified in the relevant qualification guidelines.

Among other things, these workers are required to pass the previously mentioned medical examinations at the beginning of the work day, as well as during (or) at the end of the work day. The new chapter of the Labor Code provides for specific cases of suspension from work for employees working underground and the procedures of such suspensions and clearance of workers returning to work after suspension.

For example: An employer is obliged to remove from underground facilities where there are explosive materials or not grant access to a worker who has smoking accessories, sources of fire, alcoholic beverages, narcotic or other toxic substances, as well as internal labor regulations for the unauthorized use of personal property (including electronic devices where by their use may lead to an accident occurring).

Sixexpectations

We now turn our attention to legislative initiatives in the area of labor law which are most likely to be implemented in 2012.

Draft 1: A guarantee to parents of children with disabilities. As it is well known, currently before the State Duma of the Russian Federation, there is a whole series of draft legislation providing for amendments and additions to labor legislation. For example, in accordance with one of these draft legislation bills, it proposes to limit the dismissal on the initiative of the employer only to cases whereby the culpable actions of an employee for any category of worker who are raising children with disabilities under the age of 18. If the law as proposed is adopted, an employer can dismiss an employee of this described category on its own initiative only in the case where the culpable action of the employee is committed solely on their part.

Currently, such a guarantee exists in article 261 of the Labor Code of the Russian Federation, but that guarantee is extended only to single mothers and to other persons who are raising orphaned children with disabilities.

Draft 2: Declarationofcompliance. The Ministry of Health and Social Development of Russia is also working on improving existing labor laws.

In particular, departmental specialists propose instead of certified organizations working to ensure compliance and protection of the provisions of the labor Code, the employer shall be able to declare compliance with the conditions and provisions of state regulations and the requirements of occupational safety.

Under the declaration of compliance the ministry proposes понимать документ and that certifying compliance with the conditions of state labor regulations and the requirements of occupational safety. Information about the declaration will be placed in the register of the Ministry of Labor. The authorization forms for the declaration of compliance, the procedures for declaring and adhering to the established norms and the information thereof is to be maintained by the Ministry of Health and Social Development of the Russian Federation.

Drat 3: Guarantees in the event of insolvency of the employer. The ministry also proposes to ratify the ILO convention on the protection of workers claims in the event of insolvency of an enterprise (Convention № 173) from the 23 June, 1992. Russia intends to be a signatory to the convention and thus accept its obligations to provide benefits to employees in the event of insolvency of an enterprise before most of the other preferred creditors, for example, the state and its social security system.

Meanwhile, Russian legislation on Bankruptcy currently already provides sufficient guarantees to employees in the event of a company’s insolvency and places workers in a more privileged position in comparison to other creditors including state and non-budgetary funds.

Draft 4: Compensation for a delay in the payment of salary - a calculation sheet. The ministry proposes to require employers to include calculation sheets of information on the amounts of monetary compensation (interest) for the late payment of wages. The same draft legislation provides for a simplified procedure of judicial collection of the prescribed percentages if they have been calculated but not paid out. If the bill is adopted, according to current requirements it will be issued by court order.

Draft 5: Stricter Penalties. Along with efforts to improve labor legislation the ministry proposes to tighten administrative responsibility for violation of labor legislation. The ministry has prepared draft legislation under which would introduce fines for employers from 60 000 to 800 000 rubles. Then, as it is now, for violation of labor legislation an employer can be fined only to a maximum of 50,000 rubles. If the law is adopted fines for company officials will also increase in certain instances from 10 000 to 50 000 rubles.

Additionally, it is planned a provision in the Code of the Russian Federation on administrative offenses new independent personnel in the area of labor relations, precisely:

· Violation in the payment of wages that are pass due;

· Violation of the rules by which an employment agreement is terminated;

· Violation of the rules in registering an employment agreement in writing;

· Violation in the procedures for overtime and the granting of annual paid vacation.

Draft 6: Remote Work. Among other things, there exists the likelihood that in proposed labor legislation there will be the concept of remote work, which is identified and will include not only work completed on site, but other work which is fulfilled away from the employer’s location.

According to our opinion, a change in the special regulation of remote work to meet modern conditions of employment is necessary. Currently these issues within the Labor Code of Russia are addressed in only chapter 49 on domestic work. However, its rules to not take into account all the specifics concerning the new forms of employment under which an employee may work remotely. We hope that, consideration of this draft legislation will take into account such issues as:

· Occupational safety for employees working remotely,

· Exchange of documents and information between the parties of an employment agreement, including in electronic format and the use of electronic signatures;

· Identifying a permanent place of work while an employee is working remotely in a place where the employer has no physical or operational business infrastructure.


This article was published in the journal "Trudovie Sporii", #1, 2012


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