Russian Labor Law Guide（Part A）

The Authors：

Matvey Levant

Alexander Ksenofontov

The Translator：

Yuheng Xu

As a pivotal partner in China’s Belt and Road Initiative, Russia continues to attract Chinese investors with its abundant natural resources and transcontinental advantages straddling Europe and Asia. Yet beneath these opportunities lies a labyrinth of labor law complexities and compliance risks—an invisible threshold for enterprises venturing abroad. From foreign company employment rules to labor dispute resolution, from employee data protection to collective bargaining negotiations, every step carries hidden intricacies. 

In Russian Labor Law Overview, attorneys Matvey Levant and Alexander Ksenofontov leverage 25 years of practical experience to systematically deconstruct Russia’s labor legal framework. These compliance insights, distilled from real-world cases, serve as a tailored "legal GPS" for Chinese enterprises, guiding them through regulatory ambiguities and illuminating the underlying logic of Russian labor management. 

(The following content is excerpted from Russian Labor Law Overview - Part A. For the full version, refer to the Russia Chapter in Invitation to Contribute to The Labor Law Environment Report of the " Belt and Road" Countries.)

• The procedure for establishing a state quota for hiring disabled people has been changed, and fines for employers who do not fulfill this quota have been increased. 

• New rules for overtime pay have come into effect, according to which, when paying overtime hours, it is necessary to take into account not only the fixed amount of wages (salary, tariff rate), but also compensation payments due to working conditions that deviate from normal, as well as incentive payments (bonuses).

• A new methodology for special assessment of working conditions in the workplace has been put into effect, including a classifier of harmful and hazardous production factors. 

• State fees have increased for issuing invitations for foreign citizens to enter Russia for the purpose of carrying out labor activities, permits to attract and use foreign workers, and work permits for foreign citizens. 

• The minimum earnings threshold for a foreign highly qualified specialist has also been increased. 

• Employers are prohibited from firing employees who are single parents of children under 16 (previously – under 14) on their own initiative. 

• In addition, the federal minimum wage was increased to 19,242 rubles per month. 

Overview

On the territory of the Russian Federation, the rules established by labor legislation apply to labor relations involving organizations created or founded by foreign persons or with their participation, international organizations and foreign legal entities, unless otherwise provided by federal law or an international treaty of the Russian Federation. A foreign company may operate in the Russian Federation, including hiring employees, through its branch, representative office, or subsidiary Russian organization. Representative offices and branches may operate in the Russian Federation from the moment of their accreditation by the tax authority and must be listed in the unified state register of legal entities.

In some cases, accreditation is required not only for the representative office of a foreign company, but also for its employees who are foreign citizens. Foreign companies are payers of contributions for compulsory social insurance of their employees in Russia, as well as tax agents in terms of income tax of their employees. In the Russian Federation, there is no minimum percentage of employees who are citizens of Russia. 

Wrongful employment

If a foreign company attracts citizens of the Russian Federation to perform work in Russia as independent contractors, and such relations contain characteristics of labor relations, this foreign company faces risks of adverse consequences associated with illegal employment.

Overview

The recruitment and use of foreign workers in the Russian Federation is subject to special legal regulation. With some exceptions, foreign citizens have the right to enter into employment relationships as employees upon reaching the age of 18. As a general rule, an employer has the right to recruit and use foreign workers if they have a permit to recruit and use foreign workers, and a foreign citizen has the right to carry out labor activities if they have a work permit or patent. The Russian Government establishes quotas for issuing invitations to foreign citizens to enter the Russian Federation for the purpose of carrying out labor activities, as well as quotas for issuing work permits to foreign citizens. 

These quotas do not apply, in particular, to:

• Foreign highly qualified specialists;

• Foreign citizens who are sent by a foreign commercial organization registered in the territory of a state - a member of the World Trade Organization (WTO) to work in its Russian division;

• Foreign citizens attracted to work by a resident of the free port of Vladivostok or a resident of the advanced development area.

• Foreign citizens may be attracted by employers and work in Russia without obtaining the relevant permits if they have a temporary residence permit or a residence permit in the Russian Federation.

A similar benefit applies to a number of foreign citizens who, in particular:

• are employees of foreign companies (manufacturers or suppliers) and perform installation (installation supervision) work, service and warranty maintenance, as well as post-warranty repairs of technical equipment supplied to the Russian Federation;

• work as journalists accredited in Russia;

• study in the Russian Federation in professional educational organizations, higher education institutions and scientific organizations;

• are invited to Russia as scientific and pedagogical workers by certain educational, scientific or innovative organizations;

• are creative workers and have arrived in Russia for a short-term tour;

• are accredited employees of representative offices of foreign legal entities accredited in the territory of the Russian Federation, based on the principle of reciprocity in accordance with international treaties of the Russian Federation;

• are specialists in the field of information technology and work in IT companies;

• have been invited to the Russian Federation as medical, pedagogical or scientific workers to engage in relevant activities in the territory of the international medical cluster.

Social Insurance

The rules for medical and pension insurance of foreign workers, their compulsory social insurance in case of temporary disability and in connection with maternity vary depending on the status of the foreign worker - temporarily staying, temporarily or permanently residing, highly qualified specialist, employee of a representative office of a foreign company from a WTO member state. Foreign workers are insured persons under compulsory social insurance against accidents at work and occupational diseases. 

Liability

For violation by employers and foreign workers of migration legislation, including the rules for attracting to work and its implementation, in the Russian Federation entails, among other things, large fines, a ban on employers attracting foreign workers, administrative suspension of the company’s activities, administrative expulsion of a foreign citizen from Russia, a ban on entry into Russia. Criminal liability is provided for some offenses.