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Hiring in Russia? Read on to find out the employment norms (like taxes, payroll and benefits) and EOR (Employer on Record) norms in Russia.
Employment Norms in Russia
Russia is a beautiful country with snow-covered mountains. It is a land of great opportunities. With its 12 different time zones, it still functions as an integral system. It is home to a lot of talent, which you can hire with the help of these EOR services.
General Information:
- The Russian currency is Russian Ruble (RUB).
- Moscow is the capital of Russia.
- Russian is the official language of Russia. Documentation can be in Russian and English.
- As of 2022, the GDP of Russia was reported to be $4.328 trillion US dollars.
You need to follow strict guidelines to hire staff in Russia. Plus, you need to provide payments to your employees at least bimonthly. Find more about the accepted EOR norms to comply with to avoid hassles while expanding your business.
Table of Contents
- Agreements
- Onboarding Process
- Visa
- Minimum Wage
- Payroll Cycle
- Annual Bonus
- Health Benefits
- Working Hours and Overtime
- Leaves
- Social Security
- Taxes for Employers
- Taxes for Employees
- Probation
- Termination
- Severance Pay
- Employees or Contractors
- Final Words
AgreementsOnboarding ProcessVisaMinimum WagePayroll CycleAnnual BonusHealth BenefitsWorking Hours and OvertimeLeavesSocial SecurityTaxes for EmployersTaxes for EmployeesProbationTerminationSeverance PayEmployees or ContractorsFinal Words
Agreements
- In Russia, you have to strictly follow the labor code adopted in 2002 for hiring people.
- It is crucial to have a legally binding agreement between the employer and the employee to be hired.
- This contract can either be definite or indefinite depending on the requirement.
- Other than these, you may also need to follow federal, regional, or municipal regulations in different states or regions of Russia.
- The laws also provide for a dispute resolution mechanism for both parties which includes methods such as mediation and arbitration.
- Documentation can be in Russian and English.
Onboarding Process
- Onboarding takes a lot of patience here. You may need to stick for a few months to complete the process.
- It is mandatory to ask for a passport and a Russian work visa.
- Other than these, you also need to collect personal Identity verification from the employee.
- Additionally, educational and health and safety documents are also needed for the process.
- With EOR, you can speed up the hiring process by e-signing documents.
Visa
Russia has 3 primary types of work visas.
- An employee needs a valid passport, a fully completed visa application form, an invitation letter from the EOR company, a work permit from the Federal Migration Service, and valid medical insurance.
- The business visa is valid for 90 days.
- The work visa is for non-native individuals and can be used for up to 90 days for single-entry visas, and 1 year for multiple-entry ones.
- Specialists' visas are issued for 3 years.
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Minimum Wage
Russia has strict minimum wage laws. The minimum wage in Russia is 16,242 Rubles as of 1 Jan 2023, but it can differ region-wise.
Payroll Cycle
It is necessary to pay your employees at least twice a month. Refraining from this practice can be catastrophic for your company as it is illegal.
Annual Bonus
There is no legal requirement to pay the 13th month's salary. But, most employers provide an additional bonus in different forms, like for the education of children of their employees.
Health Benefits
- All native Russians are eligible for medical insurance as healthcare is already free in Russia. It is financed by social taxes.
- For foreigners also, it is advised to provide insurance.
- Additionally, employees are provided with voluntary group health insurance and life and accidental insurance. These aren't mandatory but advised.
- Voluntary group insurance or VMI does not cover tragic or critical illness, namely cardiac arrest, etc.
Working Hours and Overtime
- Work hours:Russia has a working week of 40 hours only. The work week is from Monday to Friday.
- Break: Russians are entitled to a break time of 30 minutes per day by law.
- Overtime: You can ask your employees to work for 4 hours overtime in 2 subsequent days and a total of 120 hours per year. Underage workers below 16 years are allowed to work only 24 hours. Employees working between 10 pm-6 am are entitled to premium overtime wages.
Leaves
Sick Leave
- Employers have to pay the employee's first 3 days of sick leave.
- After that, it is the responsibility of the social fund.
- The longer an employee has been working with a company, the more they are entitled to be paid sick leave.
- The amount can be anywhere between 60%-100% of the average salary of the concerned person in the last years which cannot be more than 2,323 Rubles.
Parental leaves
- Parental leaves in Russia are very favourable for employees and are paid by the social security fund.
- Maternity leave of 70 days is paid before childbirth.
- Paternity leave is up to 5 days and unpaid.
- One parent can take a leave until the child is 3 years old. He or she can work part-time or work from home.
- The employee is entitled to getting a monthly allowance until the child is 1.5 years old.
- Adoptive parents also get the same benefits.
Annual leaves
- All Russians are entitled to a paid leave of up to 28 calendar days.
- If an employee doesn't use his or her leave in a year, it can be rolled over to the next year.
Public Holidays (for the Calendar year 2023)
- New Year's Day (1st January)
- New Year (January 1 - January 6)
- Christmas in Russia (January 7)
- Orthodox Christmas Day (January 7)
- Russian New Year (January 8)
- Defender of the Fatherland Day (February 24)
- International Women's Day (March 8)
- Labor Day (May 3)
- Victory Day (May 21)
- Russia Day (June 12)
- Unity Day (November 4)
- Bride Day (November 5)
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Taxes for Employers
Taxation laws in Russia are very firm for employers. They are required to pay several taxes. Employers need to strictly abide by the regulations set here. Although the Federation sets up the rules, sometimes they can vary regionally.
- Corporate Tax - Employers are required to pay 15-20% corporate taxes.
- They must pay 22℅ payrolls to the Russian compulsory social security fund.
- This generally covers pensions, health insurance, disability aid, and maternity pay.
- The employer must withhold their employee's income tax at 13%
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Taxes for Employees
Russian tax laws are very clear and distinctive for employees.
Employees are not required to make payments to the social security fund. An individual's income is cumulative of money and kind (cash vouchers, gold, etc.)
- Personal income tax for Russian natives - 13%
- Income tax for non-natives - 30%.
- Non-natives can apply for a test after 6 consecutive months of living. If they pass, they will also be taxed at 15%.
- Dividends - 6%
- Other income - 35%
Probation
The Russian Federation doesn't require you to have a probation period. But, most companies offer a 3-month probation period in general.
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Termination
Russia is very particular about labour laws with specific terminating guidelines. Employers can only terminate an employee on the following grounds:
- Company Liquidation - The employer needs to pay at least 1 month of the employee's salary.
- Employee Misconduct at the Workplace
- Failure in performing a duty or continuous careless work.
- Breach of NOC
Severance Pay
It is not compulsory to provide severance in Russia but it is a good business practice to do so. Only if you haven't given prior info to your employee, will you be legally required to pay severance.
Employees or Contractors
- Employees are entitled to take advantage of all labour laws.
- They get additional benefits like a gym membership, bonuses, meal vouchers, and more.
- Contractors do not get such legal protection.
- It is a fair trade practice to provide them with internet, business, equipment, and transportation allowances along with a stipend.
- Misclassification of an employee fraudulently may invite legal implications.
Final Words
Employment in Russia is a bit critical, but it can be made easy by abiding by laws and using a trustworthy EOR system.
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