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Last updated at June 17, 2022
A beautiful view of Russia

Currency

Russian Ruble (RUB)

Capital

Moscow

Time Zone

GMT+3

Key Country Facts

Introduction

Russia, or the Russian Federation, is a country spanning Eastern Europe and Northern Asia. It extends across eleven time zones, and has borders with sixteen sovereign nations, the most of any country in the world.

Area

Russia is the largest country in the world, covering over 17,125,191 square kilometers, and encompassing one-eighth of Earth’s inhabitable landmass.

Climate

The climate is predominantly continental and there are only two distinct seasons, winter and summer, throughout much of the territory. Spring and autumn are usually brief periods of change between the extreme high or low temperatures.

Culture

Russian culture has been formed by the nation’s history, its geographical location and its vast expanse, religious and social traditions, and Western influence. Nearly 200 different ethnic groups and nationalities reside within Russian borders. Though most people are Slavic, many others have Turkic and Mongol heritage. Tatars, Ukrainians, Bashkirs, Chuvash and Chechens are some of the biggest ethnic minorities.

Religion

Russia is a secular state by constitution and has the world’s largest Orthodox population. About 73% of Russia’s population declare themselves Christians (71% Orthodox, 1% Catholic, 2% other Christians). Islam is the second-largest religion in Russia (~10%), and ~15% are unaffiliated while 1% follow other religions.

Official Language

Russian is the official and predominantly spoken language in Russia. There are 35 other languages which are considered official languages in various regions of Russia, along with Russian. Russia is a multilingual nation, with ~100-150 minority languages spoken across the country.

Russia HR at a Glance

Employment Law

The labour relationship between employees and employers of all types (including legal entities, individual entrepreneurs and natural persons) is governed by the Constitution, the Labour Code, federal laws and other statutory acts containing norms of labour law. The parties to a labour relationship cannot contract out of requirements imposed by Russian labour law.

Russian labour law is considered to be bureaucratic, and some aspects may not meet the demands of business. For example, it is pro-employee by setting complicated procedures for employer-initiated dismissals.

Specific employment rights and obligations are set by regional and industry agreements, and collective bargaining agreements signed at the company level.

The Labour Code takes precedence over federal laws and other acts.

Employment Contract

A written employment contract with details of terms of the employment relationship and employment duties must be concluded with every employee working in Russia. The terms should include:

  • The place of work
  • Start date and term of contract (if applicable)
  • Job title
  • Workplace conditions
  • Remuneration amount
  • Working hours
  • The nature of work
  • Mandatory social insurance

The terms and conditions of the employment contract cannot be less favourable than the terms and conditions set out by employment laws or collective bargaining agreements (if applicable).

Contract Terms

Employment contracts may be drawn up for either an indefinite or a fixed term.

On 1 January 2021 rules on remote work were set out, mainly to include flexibility for an employee to perform the work in the office or remotely. Remote work can be set for up to six months. Prior to the rules on remote work being established, an employee had to choose between the office or remote work, and the contracts for each were considered differently.

Other aspects of the remote work regulations include:

  • If employers announce remote work due to an epidemic or a force majeure event, employees who are unable to work remotely will have downtime on reduced pay
  • Employees who work remotely will be entitled to compensation of related expenses
  • Electronic signing is required only for important documents (e.g. employment contract amendment, termination)

Pre-Employment Checks

Background checks are not officially recognised in Russia, but Article 3 of the Labour Code generally prohibits discrimination when hiring employees. Russian law only allows hiring decisions based on potential employees’ professional skills.

Where not expressly provided for in federal laws, an employer cannot impose medical tests as a condition of employment. A medical examination as a condition of employment is mandatory only in certain limited instances (e.g. for work in hazardous conditions).

Probation Period / Trial Period

The employer has a right to establish a three-month probationary period. For managerial/executive positions, the employer can establish a six-month probationary period.

Some categories of employees are exempted from probationary periods, for example, pregnant women, women with children under 18 months old, or employees who are starting a job within one year of graduation.

During the probationary period, an employer can dismiss an employee without severance by giving three days’ written notice specifying the reasons for dismissal. An employee is entitled to resign during the probationary period without any reason, giving three days’ written notice to the employer.

Working Hours

The regular working week is 40 hours, or less for certain categories of employees and under certain working conditions.

The length of a weekend time off shall not be less than 42 hours.

Overtime

Any time worked in excess of 40 hours per week is classified as overtime (unless an employee has an open-ended working day as per his/her employment contract).

Generally an employer may have an employee work overtime only with the employee’s consent in writing.

Compensation for overtime is as follows:

  • for the first two hours of overtime, at 150% of the usual hourly rate
  • for subsequent hours of overtime, at 200% of the usual hourly rate
  • in accordance with an employee’s wishes, overtime work may be compensated by additional rest periods or time off work. However, the rest period or time off may not be for less time than the overtime actually worked.

An employee’s overtime work cannot exceed four hours within two consecutive days or 120 hours per year.

Limitations on overtime apply to certain categories of employees including employees under the age of 18, pregnant women, women with children under the age of three and disabled employees.

In employment contracts where hours of work are stated to be flexible/irregular, where there is no monetary compensation for occasional overtime, 3 additional days of annual leave must be given.

Timesheets

In January 2020, ‘electronic labour books’ have been introduced where employers file electronic reports of hiring, transfer to another role, termination with the state database. This is done together with the hard copy labour book, if an employee requests as such.

For employees who started their career in 2021, there will be no hard copy labour book, only the electronic labour book. The employer maintains workbooks for each employee who has worked for the employer for more than five days.

Documents related to payroll are stored from 5-75 years. The statutory reporting to the authorities should be stored for five years.

Bonus

Bonuses are commonly paid in Russia. There are sector-specific guidelines on the payment of bonuses, for example, in the banking sector and for certain state-owned companies (for example, bonuses can depend on the employer reaching certain key performance indicators, can be deferred, and so on).

Termination

Employment termination in Russia is heavily regulated by employment law. An employee may be dismissed only on the grounds stipulated by Russian law.

There are 6 types of termination:

1. Mutual agreement by the parties for separation

2. Expiration of fixed term contract

3. Resignation by employee by giving notice

4. Termination with cause by employer (e.g. due to transfers, redundancy, unsuitability of employee, repeated breach of job duties, criminal acts)

5. Forced termination, due to circumstances beyond control of employer/employee

6. Illegal signing of contract

For each type of termination, there is a specific process of formalities. The general requirements are that the corresponding dismissal ground shall be specified in the order of dismissal, with the employee’s signature as acknowledgement.

Notice Period

The notice period ranges from 0-2 months depending on the grounds for termination.

Immediate termination is possible by if the employer has breached labour laws, regulations or employment contract, or for cause by the employer (although 2 business days notice should be given to the employee to justify the misconduct).

Within the probation period, the notice period is 3 days.

For fixed-term contracts, the notice period is 3 days although this is not required if the employee was acting as a replacement.

For redundancy/liquidation, notice period is 2 months, and payment in lieu of notice is possible.

For termination initiated by the employee, the notice period is generally 2 weeks. For an employee who is a CEO or member of the management, he/she must give at least one month notice.

Redundancy / Severance Pay

Irrespective of the grounds for dismissal, the employee is entitled to his/her salary (including compensation of expenses and incentive payments) and encashment for unused leave over the period of employment (if any). Other additional payments upon termination depend on the grounds for dismissal and terms of employment contract.

No severance is required in case of termination:

  • for cause;
  • due to the expiry of a contract’s term;
  • through an employee’s resignation

For termination due to company liquidation or redundancy, severance pay is between 1-3 times the average monthly wage. This is paid in instalments, subject to certain conditions.

For termination due to employee’s health condition, military service, company relocation, change in conditions of contract, the severance pay is two weeks’ average wages.

Post-Termination Restraints / Restrictive Covenants

Non-compete clauses in employment contracts are not enforceable, as one of the main labour principles protected by law is that each employee has freedom of labour, including the right to work, and any person is free to choose his or her profession or type of activity.

Only heads of companies (e.g. directors, CEO) can be restricted – the employer has to give its consent for the employee to work for another employer.

Fixed-Term Contracts

A fixed-term contract can be entered into only on grounds provided by law, or if employment cannot be established for an unlimited period, for example:

  • temporary replacement of an absent employee (e.g. due to maternity or childcare leave)
  • seasonal work
  • temporary increase in production
  • performance of work that is beyond the normal activity of the employer

A fixed-term contract may also be entered into with certain categories of employees, such as CEOs, chief accountants, creative employees, students or part-time employees.

The contract must specifically list the applicable grounds for allowing a fixed-term employment. There is a minimum term of two months and the contract cannot exceed five years.

A fixed-term contract does not terminate automatically on its end date. The employer should serve 3 days written notice of termination and follow the standard termination process. If the employee is acting as a replacement, no notice is required as the contract terminates when the replaced employee returns to his/her job.

Extending, renewing, or continuing work after expiration of a fixed-term contract may entail the risk that it will be classified as open-ended.

Tax and Social Security

Personal Income Tax

Russian residents are liable to personal income tax (PIT) on their total worldwide income received in a calendar year. All employers must withhold personal income tax from individuals‘ wages and salaries, and these amounts must be paid to the tax authorities on the date that salary is being transferred to the employee.

Since January 2021, Russia has adopted a system of progressive taxation. Generally, an annual income of up to RUB 5 million will be taxed as 13%, whereas income above this limit will be taxed at 15%.

Non-residents are liable to a flat PIT rate of 30% for all types of income received from Russian sources.

Social Security

All new employees should be registered with the Pension Fund by the employer within the first 10 days of joining (if the employee was not registered in a previous job).

Employees do not pay social security contributions in Russia. Social security contributions are the sole obligation of employers. Social security contributions are paid on most remuneration and benefits paid to an employee, except for certain types of payments such as dismissal payments, compensation of business trip expenses and voluntary insurance contributions.

Russian employers pay insurance premiums to the Obligatory Health Insurance Fund, which finances the obligatory health insurance for all nationals, from birth. Employers also pay premiums to the Social Insurance Fund to cover the risk of industrial accidents.

An employee’s pension contributions to voluntary licensed plans are tax deductible from the taxable base within the limits established for social deductions.

Contribution Type Rate (%)  
Pension Fund 22.0 (for income up to RUB 1,465,000 per annum) 10.0 (for income in excess of RUB 1,465,000 per annum)
Social Insurance Fund 2.9 (income capped at RUB 966,000 per annum) 0.0 (for income in excess of RUB 966,000 per annum)
Medical Insurance Fund 5.1 (no cap)
Accident Insurance 0.2 – 8.5 depending on type of business activity

*The above table serves as a broad guideline. Actual rates charged will differ.

Employees

Salary Payment

Salary should be paid twice a month, and in Rubles. The date of payment should be indicated on the employment contract.

An employer will be obligated to pay compensation (i.e. interest) for delaying payment of salary and other employment related payments.

Payslip

Electronic payslips are acceptable.

Annual Leave

Employees are entitled to 28 calendar days’ minimum paid holiday upon completion of 6 months of service. Certain types of employees are entitled to additional paid holiday during the year, including employees with irregular working hours, employees working in the Far North or in dangerous conditions.

Annual leave should be provided in the year it accrues. If they are unused they roll over to subsequent years without limitation. Receiving monetary compensation for unused annual leave during employment is limited.

Effective 20th March 2021, employees with three or more children under the age of 18 (if at least one child is under the age of 14) are entitled to annual leave anytime.

Sick Leave

Employees can take sick leave in the event of illness or injury. Sick leave can also be granted to an employee taking care of a sick child or sick relative.

Only the first three days of sick leave are paid for by the employer. After which, employees do not receive their regular salary during sick leave, but a temporary incapacity allowance is paid from the Social Insurance Fund from insurance payments made by the employer. The payout depends on the length of service and varies from 60-100% of the employee’s salary over the previous two years.

Maternity & Parental Leave

Maternity leave starts 70 calendar days before childbirth (or 84 days in the case of multiple pregnancies) and lasts till 70 calendar days after childbirth (86 for birth complications, 110 for multiple births). Allowance during maternity leave is paid by the state fund.

There is no legal provision for paternity leave.

Breastfeeding Breaks

Working women with children under the age of one and a half years, in addition to a break for rest and meals, are provided with additional breaks for feeding the child (children) at least every 3 hours, each lasting at least 30 minutes. If a working woman has two or more children under the age of one and a half years, the duration of the break for feeding is set at least 1 hour.

At the request of the woman, the breaks for feeding the child (children) are added to the break for rest and meals or are summed up both at the beginning and at the end of the working day (work shift) with a corresponding reduction.

Adoption Leave

If adoption is by a married couple, the leave shall be granted to only one of the spouses. Women who adopt a child shall have the option, of taking maternity leave time for a period beginning from the date of adoption and up to 70 calendar days, and if adopting 2 or more children at the same time, 110 calendar days from their date of birth.

Childcare Leave

Childcare leave can be taken until the child is 3 years old. This leave can be taken by the mother, father or any other relative or guardian who actually takes care of the child.

Health Check Leave

Effective August 11, 2020, employers are obliged to provide one additional day off per year to employees above the age of 40 for medical examinations, with employer submitting a medical certificate confirming that the medical examination has taken place.

Compassionate/Bereavement Leave

Up to 5 days of unpaid leave for marriage or death of close relative.

Education Leave

Up to 50 paid calendar days off for employees who are sent for training by an employer or who have enrolled independently for training under state-accredited bachelor’s programs.

Other Leaves

  • 4 paid days off per month for a caregiver of a disabled child
  • Paid days off for blood donors
  • Paid days off for medical checkups
  • Unpaid days off for participants of the Great Patriotic War, working disabled people, parents and wives/husbands of military personnel who died in the course of military service

Public Holidays

There are at least 14 days of public holiday. Public holidays are not included in the minimum paid annual holiday entitlement.

Benefits to the Employee in Russia

Statutory Benefits

The compulsory pension rewards workers in 3 categories – old age, disability and survivor pensions. An individual must have contributed to the compulsory Pension Fund of the Russian Federation (PFR) for at least eight years to receive a pension.

People who develop a disability caused by general illness, work injury, occupational disease or military services are entitled to a disability pension. To be entitled to a Disability Labour Pension you must have been in employment.

Survivor pensions are granted to: widows older than 55 (or widowers and parents older than 60) or unemployed and taking care of a child younger than 14 or disabled; children up to 18 years old; sisters and brothers of 18 years old; and grandparents aged 60 and 55 or older or disabled.

Other Benefits

Any in-kind benefit of an employee should not exceed 20 per cent of his or her gross monthly salary (including shares). Otherwise, the employer may be subject to an administrative liability in a form of fine.

  • Unpaid leave at employee’s request for family reasons
  • Enhanced statutory guarantees
  • Additional paid leave on September 1 for parents with children who go to school
  • Paid days off for marriage, childbirth (for the father) and death of a close relative
  • Additional pay during maternity leave
  • Lunch allowance

Visas and Foreign Workers

General Information

The general rules for employing a foreign national are:

  • the foreign national must have a valid work permit and company with all visa requirements
  • the employer must have a valid permit to employ foreign workers
  • the profession of the foreign employee must be within the quota determined annually by the state authorities

Some exceptions to these rules may apply to certain categories of employees, for example, highly qualified specialists (HQSs) who are foreign citizens with experience or skills in a particular filed of activity.

There are 2 types of work visas:

  • Single-entry visa valid for 90 days – is issued by the Russian Consulate on the basis of Work Visa Invitation (which is issued on the basis of work permit)
  • Multiple-entry visa – is reissued on the basis of a single-entry visa at the local office of the Russian Migration police for the period of validity of work permit (usually for 1 year)

To get a Work visa, your inviting Company-Employer is required to obtain several documents:

  • Migration quotas to involve foreign labor force;
  • Application to the Government Employment Services;
  • Permission to involve foreign labor force, Work permit for a foreigner and Invitation for a work visa.

After this, a work visa should be obtained at the Russian Consulate or local department of the Russian Migration police.

As a rule, a work visa can be issued in 4-6 months. Renewal of a work permit involves the same procedure and takes the same amount of time as obtaining the first work permit.

The employer doesn’t pay any insurance contributions for foreigners with work permit and HQS status.

There is a special regime for HQSs, and their personal income tax is at 13 or 15% regardless of the tax-residency status (this applies only to employment remuneration).

Non-residents are taxed on income received from sources in Russia. Some tax treaties provide for periods of exemption from Russian taxation on the Russian-source income of non-residents.

Nationals from the Commonwealth of Independent States (CIS) do not need a visa to enter Russia and do not require a Russian work permit and visa or a guaranteed job offer from a Russian employer. They have to apply for a work patent within 30 days of arriving in Russia and then have to find employment within 60 days of receiving the work patent.

Public Holidays in 2022

S.No Occasion Date
1. New Year’s Holiday January 1, 2, 3, 4, 5, 6, 8
2. Christmas January 7
3. Defenders of the Motherland Day February 23
4. International Women’s Day March 8
5. Holiday of Spring and Labour May 1
6. Victory Day May 9
7. Russia Day June 12
8. National Unity Day November 4

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