Hire in Russia
Here’s where you get started with human resources best practices and hiring in Russia.
Russian Ruble (RUB)
Key Country Facts
Russia, also known as 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.
Russia is the largest country in the world by size, covering over 17,125,191 square kilometers and encompassing one-eighth of Earth’s inhabitable land mass
Russia’s climate is predominantly continental and throughout much of the country there are only two distinct seasons of winter and summer. Spring and autumn are usually brief periods of change between the extreme high or low temperatures.
Russian culture has been formed by the country’s rich history, its geographical location, vast expanse, religious traditions, social customs and Western influence. Nearly 200 different ethnic groups and nationalities live in Russia. Though most people in the country are Slavic, many others have Turkic and Mongol heritage. Tatars, Ukrainians, Bashkirs, Chuvash and Chechens are some of the most prevalent ethnic minorities.
Russia is a secular state by constitution and has the world’s largest Orthodox population. About 73% of Russia’s population declare themselves Christians (including 71% Orthodox, 1% Catholic and 2% other Christians). Islam is the second-largest religion in Russia (approximately 10%). Approximately 15% of the population is unaffiliated while 1% of people follow other religions.
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 between 100 and 150 minority languages spoken across the country.
Russia HR at a Glance
The labor relationship between employees and employers of all types (including legal entities, individual entrepreneurs and natural persons) is governed by Russia’s Constitution, the Labor Code, federal laws and other statutory acts outlining norms of labor law. The parties to a labor relationship cannot contract out of requirements imposed by Russian labor law.
Russian labor law is considered to be bureaucratic and some aspects may not meet the demands of business. For example, it is largely pro-employee and sets complicated procedures for employer-initiated dismissals.
Specific employment rights and obligations are set by regional agreements, industry agreements and collective bargaining agreements signed at the company level.
The Labor Code takes precedence over federal laws and other acts.
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 favorable than the terms and conditions set out by employment laws or collective bargaining agreements (if applicable).
Employment contracts may be concluded for either an indefinite or a fixed term.
On January 1, 2021, new rules on remote work were set out, mainly including 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. 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 for related expenses.
- Electronic signing is required only for important documents (e.g. employment contract amendments and terminations).
Background checks are not officially recognized in Russia but Article 3 of the Labor Code generally prohibits discrimination when hiring employees. Russian law only allows hiring decisions based on potential employees’ professional skills.
An employer cannot impose medical tests as a condition of employment if the practice is not expressly provided for in federal laws. 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 retains the right to set a three-month probationary period. The employer can establish a six-month probationary period for managerial and executive positions.
Some categories of employees are exempt from probationary periods, including pregnant women, women with children under 18 months old and 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, by giving three days’ written notice to the employer.
The regular working week in Russia is 40 hours (or less for certain categories of employees and under certain working conditions).
The length of a weekend time off must not be less than 42 hours.
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 or her employment contract.
Generally, an employer may only have an employee work overtime with the employee’s consent in writing.
Compensation for overtime is as follows:
- For the first two hours of overtime: 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 given may not be for less time than the overtime the employee 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.
Three additional days of annual leave must be given to employees working under employment contracts where hours of work are stated to be flexible or irregular or if there is no monetary compensation for occasional overtime.
In January 2020, electronic labor books were introduced in Russia. Employers use this now to file electronic reports of hiring, the transfer of an employee to another role and the termination of an employee with the state database. This is done together with the hard copy labor book (by employee request).
For employees who started their career in 2021 and beyond, there will only be the electronic labor book. The employer must maintain workbooks for any employee who has worked for the employer for more than five days.
Documents related to payroll are stored from five to 75 years. Documentation of statutory reporting to the authorities should be stored for five years.
Bonuses are commonly paid in Russia. There are sector-specific guidelines on the payment of bonuses such as in the banking sector and for certain state-owned companies. For example, bonuses may depend on the employer reaching certain key performance indicators, a bonus can be deferred, etc.
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 six 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, etc.)
5. Forced termination, due to circumstances beyond control of employer or the employee
6. Illegal signing of a contract
There is a specific process of formalities for each type of termination. The general requirements are that the corresponding dismissal ground must be specified in the order of dismissal, with the employee’s signature as acknowledgement.
The required notice period in Russia ranges from zero to two months, depending on the grounds for termination.
Immediate termination is possible if the employer has breached labor laws, regulations or the employment contract. Immediate termination for cause by the employer is also possible, although two business days’ notice should be given to the employee to justify the misconduct.
Within the probation period, the notice period is three days.
For fixed-term contracts, the notice period is three days although this is not required if the employee was acting as a replacement.
For redundancy and liquidation, the notice period is two months. Payment in lieu of notice is also possible.
For termination initiated by the employee, the notice period is generally two weeks. For an employee who is a CEO or member of the management, he or she must give at least one month’s notice.
Redundancy / Severance Pay
Irrespective of the grounds for dismissal, the employee is entitled to his or her salary. This includes the compensation of expenses, 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 the terms of the employment contract.
No severance is required in cases 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, the required severance payment is between one and three times the average monthly wage. This is paid in installments and is subject to certain conditions.
The severance pay is two weeks’ average wages for termination due to an employee’s health condition, military service, company relocation, or change in conditions of contract.
Post-Termination Restraints / Restrictive Covenants
Non-compete clauses in employment contracts are not enforceable in Russia. One of the main labor principles protected by law is that each employee has the freedom of labor, including the right to work. Any individual in Russia is free to choose his or her profession or type of activity.
Only heads of companies (e.g. directors or CEOs) can be restricted. The employer must give its consent for the employee to work for another employer.
A fixed-term contract can be entered into only on grounds provided by law or if employment cannot be established for an unlimited period. This includes:
- 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 three days written notice of termination and follow the standard termination process. If the employee is acting as a replacement, no notice is required. This contract will terminate when the replaced employee returns to his or her job.
Extending, renewing or continuing work after expiration of a fixed-term contract may entail the risk that the employment will be classified as open-ended.
Tax and Social Security
Personal Income Tax
Russian residents must pay 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. These amounts must be paid to the tax authorities on the date that salary is being transferred to the employee.
Russia adopted a system of progressive taxation as of January 2021. Generally, an annual income of up to RUB 5 million is taxed as 13%, whereas income above this limit is taxed at 15%.
Non-residents are liable to a flat PIT rate of 30% for all types of income received from Russian sources.
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. These exceptions include dismissal payments, compensation of business trip expenses and voluntary insurance contributions.
Employers in Russia pay insurance premiums to the Obligatory Health Insurance Fund, which finances the obligatory health insurance for all Russian nationals from birth. Employers also contribute premiums to the Social Insurance Fund, which covers 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.
An employee’s salary should be paid twice a month in Rubles. The date of payment should be indicated on the employment contract.
An employer is required to pay compensation (e.g. interest) for delaying payment of salary and other employment-related payments.
Electronic payslips are acceptable in Russia.
Employees are entitled to 28 calendar days’ minimum paid holiday upon the completion of six 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 country’s far north or those working in dangerous conditions.
Annual leave is to be provided in the year it accrues. If the days are unused, they roll over to subsequent years without limitation. Receiving monetary compensation for unused annual leave during employment is limited.
Effective March 20, 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.
Employees are entitled to take sick leave in the event of an illness or injury. Sick leave can also be granted to an employee caring for a sick child or relative.
Only the first three days of sick leave are paid for by the employer. After this time, employees do not receive their regular salary during sick leave. 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% to 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 following childbirth (86 days for birth complications and 110 for multiple births). Allowance during maternity leave is paid by the state fund.
There is no legal provision in Russia for paternity leave.
In addition to a break for rest and meals, working women with children under the age of 1.5 years are provided with additional breaks for feeding the child (or children) at least every three hours. Each of these breaks must last 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 for at least 1 hour.
If the woman requests, the breaks for feeding the child (or children) can be added to the break for rest and meals. Alternatively, they can be summed up both at the beginning and at the end of the working day (work shift) with a corresponding reduction.
If adoption is by a married couple, the leave will only be granted to only one of the spouses. Women who adopt a child are entitled to take maternity leave for a period beginning from the date of adoption and up to 70 calendar days. If adopting two or more children at the same time, this extends to 110 calendar days from the date of birth.
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 takes care of the child.
Health Check Leave
Effective August 11, 2020, employers are required to provide one additional day off per year to employees above the age of 40 for medical examinations. The employer must submit a medical certificate confirming the medical examination has taken place.
Employees in Russia are entitled to up to five days of unpaid leave for marriage or the death of a close relative.
Employees who are sent for training by an employer or who have enrolled independently for training under state-accredited bachelor’s programs are entitled to up to 50 paid calendar days off.
- Four 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 the wives and husbands of military personnel who died in the course of military service
There are at least 14 public holidays in Russia. Public holidays are given off in addition to the minimum paid annual holiday entitlement.
Benefits to the Employee in Russia
The compulsory pension rewards the workers of Russia in three categories: old age, disability and survivor pensions. An individual must contribute to the compulsory Pension Fund of the Russian Federation (PFR) for at least eight years in order 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 Labor Pension the individual must have been in employment.
Survivor pensions are granted to the following family members of the deceased:
- 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 up to 18 years old
- grandparents aged 60 and 55 or older (or disabled).
Any in-kind benefit of an employee should not exceed 20% of his or her gross monthly salary (including shares). Otherwise, the employer is subject to an administrative liability in the form of a 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
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 apply to certain categories of employees. For example, highly qualified specialists (HQSs) who are foreign citizens with experience or skills in a particular field of activity have special exceptions.
There are two types of work visas:
- The single-entry visa, valid for 90 days, is issued by the Russian Consulate on the basis of Work Visa Invitation. This is issued on the basis of a work permit.
- The 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 one year).
To get a work visa, the sponsoring 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
- Invitation for a work visa
After this, a work visa should be obtained at the Russian Consulate or the local department of the Russian Migration police.
As a rule, a work visa can be issued in four to six months. Renewal of a work permit entails the same application procedure and takes the same amount of time as obtaining the initial work permit.
The employer doesn’t pay any insurance contributions for foreigners with work permits and HQS status.
There is a special regime for HQSs. Their personal income tax is set at 13 or 15% regardless of the tax-residency status. This applies only to employment remuneration.
Non-residents are taxed on income received from Russian sources. 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 must apply for a work patent within 30 days of arriving in Russia and then must also find employment within 60 days of receiving the work patent.
Public Holidays in 2022
|1.||New Year’s Holiday||January 1, 2, 3, 4, 5, 6, 8|
|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|