- New regulations for signing employment agreements with foreign workers
- Foreign citizens’ documents for signing an employment agreement
- Special conditions of employment agreements
- Sanctions for workers who violate migration and labor legislation
1. NEW REGULATIONS FOR SIGNING EMPLOYMENT AGREEMENTS WITH FOREIGN WORKERS
Federal Law N 409-FZ0 dated 01.12.2014 went into effect 13 December 2014 and introduced changes to the Labor Code of the Russian Federation (hereinafter – “LC RF”). At the moment, the LC RF contains a separate Chapter 50.1, which regulates labor relations with foreign citizens and stateless persons in the Russian Federation. Despite the fact that the LC RF regulates labor relations with all categories of workers, there are a number of special considerations and limitations that will be examined in this article.
1) Foreign citizen’s age
According to Article 327.1, Part 3 of the LC RF, foreign citizens may enter into employment in the Russian Federation as soon as they reach the age of 18 since documents allowing foreign citizens to work in the Russian Federation are issued upon turning 18 (Article 13, Point 4 and Article 13.3, Point 1 of the Federal Law N 115-FZ dated 25.07.2002, hereinafter – “Law N 115-FZ”).
2) Employer’s rights when signing employment agreements with foreign citizens
It is important to note that not all employers have the right to sign employment agreements with foreign citizens.
Article 327.1, Part 4 of the LC RF stipulates that employers who are directly prohibited by law from hiring foreigners may not do so. For example, an employer does not have the right to hire foreign employees as highly qualified specialists to work in customer service for retail consumer goods. Exceptions are allowed only for workers who perform management and coordination activities related to the sale of goods (Article 13.2, Point 1.3 of Law N 115-FZ).
2. EMPLOYMENT DOCUMENTS FOR FOREIGN CITIZENS
A foreign citizen must present both documents general to all categories of employees (in accordance with Article 65, Part 1 of the LC RF), as well as the special documents indicated in Article 327.3, Part 1 of the LC RF.
1) General documents presented by all workers regardless of citizenship
- Passport or other document verifying identity;
- Employment book;
- Proof of insurance for Russia’s compulsory pension insurance (personal pension account number);
- Certificate of the presence (absence) of convictions and/or criminal indictment or of the termination of criminal prosecution on rehabilitative grounds if the type of work requires this. For example, educational work does not allow anyone with a criminal record to be hired.
When signing an employment agreement, an employer must first process the employment book and proof of mandatory pension insurance for the foreign citizen (Article 65, Part 4 of the LC RF). An employment book does not need to be presented if the worker is being hired on a part-time basis.
2) Special documents from the foreign citizen
- Voluntary medical insurance agreement or policy
Any foreign citizen temporarily residing in Russia should present a voluntary medical insurance policy (hereinafter – “VMI”) which is valid in Russia upon signing an employment agreement.
However, the foreign citizen does not have to have a VMI policy if the employer has a VMI agreement with a medical organization, on the basis of which the foreign citizen has the right to rely on:
- Primary health care
- Urgent specialized medical care for foreign citizens
It is important to note that the VMI policy and the VMI agreement should be processed with an insurance organization that operates in the Russian Federation.
The foreign citizen temporarily staying in Russia must present one of the following documents for employment:
Work permit – document verifying the right of the foreign citizen temporarily staying in the Russian Federation on the basis of a visa and other categories of foreign citizens in situations provided for by Law N 115-FZ to temporarily perform work activities in Russia. This document is associated with the employing organization and, accordingly, if the foreign worker changes employers, then they must obtain a new work permit.
License – document verifying the right of a foreign citizen who is staying in the Russian Federation on a basis not requiring a visa (excluding certain categories of foreign citizens in situations stipulated by Law N 115-FZ) to temporarily perform work activities in the Russian Federation.
This document is directly tied to the foreign citizen himself; therefore, a license is valid regardless of how many times he changes employers. However, the license’s validity extends only within the constituent territory of the Russian Federation where it was issued.
Note: an employer has the right to request that a foreigner temporarily staying in Russia present their migration card in order to check their migration status and purpose of their visit to Russia upon being hired.
IMPORTANT: a foreign worker also has the right to present their work permit to an employer after the two parties sign an employment agreement (Article 327.3, Part 2 of the LC RF). For example, the employer should present the employment agreement together with other documents to Russia’s Federal Migration Service in order to have a work permit issued for a highly qualified specialist (Article 13.2, Point 6 of Law N 115-FZ). In this case, the employment agreement does not take effect before the foreign citizen receives their work permit, for which it will be necessary to make a corresponding clause in the employment agreement: “The employment agreement will come into effect after the employee receives their work permit. In the event that the relevant authorities refuse to issue the work permit, the employment agreement will not come into effect and the employee will not be paid the salary associated with it.”
Information on the work permit received is included in the employment agreement according to the procedure established by Article 57, Part 3 of the LC RF; in other words, it is finalized in writing by an addendum to the employment agreement and indicates the work permit number and date it was processed.
Foreign citizens who permanently or temporarily reside in the Russian Federation are not required to present a work permit or license; instead, they present a temporary residency permit (for those who are living in Russia temporarily) or a residence permit (for those who are permanent residents). Since these types of foreign citizens are not the subject of our article, we will not examine the details of the document set for this category of citizens.
3. EMPLOYMENT AGREEMENT SPECIAL CONDITIONS
Aside from the required information and conditions prescribed in Parts 1 and 2 of Article 57 of the LC RF, a number of special conditions and information are indicated in employment agreements with foreign workers.
- Information on the authorizing document
Information on the authorizing document must be indicated in the labor agreement according to the prescribed procedure:
- Name of the authorizing document (work permit for foreigners temporarily staying on a visa; license for foreigners temporarily staying without a visa);
- Series and number of the document;
- Date of issue and expiration date of the document;
- Information on the regional office of Russia’s Federal Migration Service which issued the document, for example “FMS Russia Moscow City branch”).
- Medical insurance requirement
A condition on providing the employee medical assistance for the duration of the employment agreement must be included in said employment agreement with the foreign worker temporarily staying in Russia. This point should indicate the details of the VMI agreement (policy) or agreement that the employer signed with the medical organization on providing paid medical services to the employee.
- Employment agreement validity period
Currently, the LC RF directly establishes the signature of an employment agreement with a foreign citizen for an undetermined time period (Article 327.1, Part 5 of the LC RF).
A fixed-term employment agreement may be signed with a foreign citizen only under the general circumstances prescribed by Article 59 of the Labor Code.
According to the standard procedure, prior to signing an employment agreement, the foreign citizen must review with signed acknowledgement the organization’s internal work regulations, other local normative acts directly associated with the employee’s labor activity, and collective employment agreement (if applicable) (Article 68, Part 3 of the LC RF).
With regard to the above, Russia’s FMS recommends that employers formalize open-term employment contracts with foreign citizens with a stipulation that the signed contract comes into effect on the date that the foreign citizen receives their work permit (license). The date that the employer’s human resources department issues the order to admit the foreign citizen into the staff of the hiring company is considered the actual beginning of employment relations between the employer and the foreign citizen. Furthermore, the local department of the FMS should be notified that the foreign citizen has been hired for employment in accordance with existing Russian law within three business days after the date that the agreement was signed.
Based on the practice of submitting documents to the FMS, the employment agreement should also include the following:
- Amount of the foreign citizen’s salary – no less than 167,000,000 rubles per month (if they are a highly qualified specialist);
- Complete passport information of the individual signing the agreement with the foreign citizen on behalf of the company (on the first page when indicated by the employer).
4. SANCTIONS FOR EMPLOYERS VIOLATING MIGRATION AND LABOR LAWS
Let’s examine what kinds of sanctions an employer could be subject to when violating migration or labor legislation.
Russia’s Code of Administrative Violations establishes sanctions in Chapter 18 for violating the rules of migration legislation. Essentially, these are administrative fines which may be applied:
- To the foreign citizen himself – from 2,000 to 5,000 rubles; the foreign citizen may also be deported from Russia and lose the right to reenter for five years;
- To an administrative official of the organization – from 40,000 to 50,000 rubles;
- To a legal entity – from 400,000 to 800,000 rubles; the legal entity will be subject to suspension of its business activities for a period of up to 90 days, which may have the most negative impact on the organization’s business activities.
The Russian Federal Labor Inspectorate uncovers violations in the area of labor law. The LC RF determines disciplinary, material, civil-legal, administrative and criminal liability for violation of labor legislation and other normative legal acts.
We also need to examine administrative liability within the framework of the stated topic. According to Article 5.27, Part 1 of Russia’s Code of Administrative Offenses, an employer’s violation of essentially any labor or occupational safety legislation results in an administrative fine:
- For administrative officials – from 1,000 to 5,000 rubles
- For legal entities – from 30,000 to 50,000 rubles or suspension of business activities for up to 90 days.
If an administrative official who previously incurred administrative penalties for an analogous violation violates labor or occupational safety laws, they will be subject to disqualification for a period of six months to three years.
Furthermore, if a court determines that a fixed-term employment agreement was signed for an indefinite period of time, the foreign worker will be brought back to work and be paid their salary for the entire period of forced idle time. This will still be the employer’s financial responsibility to the employee for violating labor legislation.
Therefore, when hiring foreign citizens, the employer must take a number of factors into account in order to comply with the requirements of Russia’s migration and labor legislation, and assess all risks that may arise from it.
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