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 29.03.07The following article is based on several Russian-language Market News bulletins on our site. The information has been compiled together with additional explanatory information for the benefit of our non-Russian readers. Alinga Consulting Group is always happy to answer questions concerning labor law in the Russian Federation or concerning other questions about business in Russia. Please, contact us.
Russia Offers Amnesty for Illegal Immigrants,
New amendments to migration legislation which came into power 15 January 2007 make it easier to employ CIS citizens in Russia. Now these workers can obtain work permits from the Federal Migration Service (FMS) by themselves and employers only need to notify the State Employment Agency upon hiring a CIS citizen. At the same time, punishment measures for hiring illegal labor have been intensified. Employing a foreign citizen without a work permit is punishable by fines from 250,000 to 800,000 rubles for corporations. This fine is, furthermore, is for each illegal employee, not for each case where violations are found. A business may also be forced to suspend its activity for up to 90 days as further punishment.
The new convenience of obtaining work permits has resulted in an explosion of them in Russia. During the first month and a half of this year, 150,000 people were issued the right to work in Russia – three times more than last year. Many more permits are still expected to be issued this year. At first glance, these new regulations might provide some hope for Russia’s labor shortage and demographic problems. However, officials say that the new laws have not been designed for those coming to Russia to work, but those already there. Thus, it can be seen not so much as a measure to increase the labor force, but as one to eliminate the “grey” and “black” areas from the labor force Russia currently has – and perhaps generate more tax revenue in the process.
As the Russian economy has grown far faster than that of many countries in the former Soviet Union, illegal immigration and illegal employment is a major problem in Russia. By FMS estimations, there are currently about 10-12 million illegal immigrants in Russia. Only 1.4 million immigrants are working in Russia legally, according to Michael Zurabov, Russia’s Minister of Health.
Many government officials think that granting amnesty is impractical. They explain that such a policy can be useful in countries in the West because in those countries, migrants often live in the same location for a number of years and can be almost considered citizens. Most immigrants who come to Russia have no intention of long-term residency in the country. The goal is to make as much as possible as quickly as possible and then to move back to their families in their home countries to build businesses and homes there. Thus, the amnesty will likely not result in a more stable labor force, and might actually contribute to capital flight from Russia.
Nevertheless, the FMS is starting a program to legalize illegal immigrants in the near future.
The Ministry of Justice has made several recommendations concerning how the new policy should be implemented. Workers who have resided in Russia for longer than 90 days without a migration card should still be able to obtain a work permit, advises the Ministry. 90 days is the maximum time that immigrants have to find legal employment after arriving to Russia. The Ministry recommends that the amnesty process should run as follows: immigrants submit an official declaration explaining why they have no migration card, they present a work contract to begin after the work permit is obtained, as well as proof of immigrant registration issued by the employer on the work contract. The applicant will also need to present medical certificates testifying that they do not have certain infectious diseases such as HIV/AIDS nor are they addicted to illegal drugs. A migration card, usually necessary to be employed in Russia, will not be necessary, meaning that applicants will not need to leave Russia and return in order to obtain a migration card at the boarder.
Critics in the government argue that the proposed regulations will not be effective. Among the reasons why include the purely economic. While not requiring departure and re-entry will save the immigrant time and money, the required medical tests can be quite expensive and immigrants do not have rights to the free medical service offered to Russian citizens at state clinics. An AIDS test will cost a minimum of 180-300 rubles, a syphilis test, 240-500 rubles, a drug test, 400 rubles, tuberculosis, 600-800, and applicants will still need to be tested for leprosy, chlamydia, and chancres. With the 2,000 ruble fine and other associated costs and fees, the total cost could easily add up to more than 5,000 rubles. For many immigrants, this is more than a month’s wages. In a country where many small employers and large employers like construction companies prefer to hire employees illegally to avoid regulations and taxes, immigrants who are in Russia simply to make fast money will likely ask themselves why they should even bother.
Most employers agree that most of the proposed regulations are perfectly reasonable. Medical tests will help prevent drug-addicts and infectious diseases from entering Russia; work contracts will protect migrants’ and employers rights. However, under the current bureaucracy, which requires many more documents and fees and charges that can add up to 5000-13000 rubles and require 3-4 days of moving documents from office to office, it is still difficult and expensive for employers to process work permits as well.
It is likely that large companies, which are often more likely to be inspected by officials, will fear the increased fines and, out of necessity, will abide by the new laws or hirer fewer immigrants. However, small enterprises, most businessmen think, will continue to operate in their old ways.
Quota System to be Extended
In a further effort that may restrict legal immigration to the Russian Federation, the government is intending to extend controversial employment quotas introduced earlier this year. For now, such quotas exist only in the area of retail sales; where immigrants are limited to 40% of available jobs. Starting 1 April 2007, there should be no immigrants working as retail sales agents at all.
Critics contend that these measures have or will lead to increased prices for consumer goods, job cuts, and further restrict a strained labor market in places like Moscow and Siberia.
Nevertheless, the government intends to extend the quotas to several other professions by the end of 2007. These quotas will be determined from information currently gathered by government from employers. Employers must apply to the government for approval before they hire foreigners and must state the education and profession of the foreigner on their application form. Based on information gathered from these, the relevant Russian ministries will create migrant labor quotas that will take education and profession into account.
The Moscow government, approving of the proposal, has already begun creating a commission to oversee compliance with the new legislation in the booming local construction industry.
Like the amnesty proposal, critics charge that this plan will also fall short of its goals. Businessmen have are already bypassing current quotas by simply declaring workers as sales managers, marketing specialists, logistics engineers or other professions not applicable to the current legislation. Many companies simply do not register the workers.
The labor market for Russia is truly complex, and filled with “grey” and “black” areas. Weather the new legislation slated for the fate of immigrants will be effective in relieving certain current problems is yet to be seen.
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The Federal Migration Service is offering a controversial amnesty to illegal immigrants currently residing within the Russian federation. At the same time, the government is looking to extend a controversial quota system restricting the employment of immigrants in certain sectors. |
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