Definitive Guide to Hiring in Russia

Hiring in Russia

Hiring employees compliantly in Russia means doing it yourself or using an Employer of Record like Global Expansion. You should be careful using independent contractor agreements in Russia so that you don’t run afoul of employment laws. To hire an employee compliantly and offer them mandatory benefits and compliant agreements, you can:

(a) Establish your own new legal entity, banking, accounting and payroll service in Russia; or

(b) use an Employer of Record like Global Expansion who can handle all of the details for you.

Labor Laws in Russia

Employment laws in Russia are uniquely suited to the country’s way of life, and crucial to understand if you want to employ local talent in this country. Get the details on Russia employment laws and Russia policies here.

Employee Probation Period

• The probation period is established at maximum three months and, in case of dismissal during the trial period, a three-day notice is required

Annual Leave in Russia

• Employees in Russia are entitled to an annual paid vacation of at least 28 calendar days per one year of work.
• An employee is entitled to use his/her vacation time (in full) once he/she has worked for an employer for at least six months.

Holidays in Russia

Workers are entitled to paid holidays during Festival (public and religious) holidays. These include memorial holidays and religious holidays (Christian origin).

Here is the full list of public holidays in Russia:

Maternity Leave Russia

• Maternity leave normally given under Russia labor law is 140 days at 100 percent of the salary – 70 days before the birth and 70 days after.
• This can increase to 194 days in the event of multiple pregnancies or complications – 84 days before the birth and 110 days after it for multiple births (such as twins or triplets) or 86 days after the birth if there are any complications.
• The minimum maternity benefit should be 100 percent of the legal minimum wage up to a legal maximum of 40 hours if in full-time employment, while the total claimed should not be more than R.34,583.
• For a period of 18 months after the birth, the total payable can be 40 percent of the salary.

Paternity Leave Russia

• New fathers in Russia are not guaranteed any paid paternity leave (leave designated specifically for fathers).
• However, 18 months of unpaid leave can be taken by either parent.

Sick Leave in Russia

• Under Russia’s labor law, workers temporarily unable to work and in need of medical assistance due to illness or accident will receive payment of 60-100% of their salary.
• The exact amount is calculated on the basis of a complex formula.
• The employee must provide proof of illness, such as a doctor’s note, upon his or her return to work.

Working Hours in Russia

• The work week is 40 hours.

Overtime in  Russia

• Employees must provide written consent to work overtime.
• Overtime work compensation is paid at a rate of 1.5 times for the first two hours and 2 times the rate for additional hours.
• Overtime work must not exceed 4 hours in two consecutive days, and not over 120 hours per year.

Termination of Employment in Russia

• An employee must give two weeks' notice to the employer.
• An employee who is a chief executive officer or a member of the management board must give notice at least one month before the proposed termination date.
• An employment contract can be terminated before the expiration of the notice period by mutual agreement.
• Severance payments depend on the grounds for termination.
• Employees terminated due to liquidation or redundancy are entitled to a severance payment equal to their average monthly wage.
• Additionally, the employer must pay the dismissed employee their average monthly salary during the period they are looking for a new job (but for no longer than two months from the date of termination).
• In exceptional cases, an employee can receive their average monthly salary for a third month following the date of termination, based on a decision of the Employment Agency (if the employee addressed that body within two weeks of dismissal and was not employed).
• An employment agreement or a collective bargaining agreement can provide for a higher severance pay.
• Chief executive officers (CEOs) of a company and members of the management board who are dismissed without cause by a decision of the company's authorized body are entitled to a severance payment equivalent to at least three average monthly salaries.
• This severance payment is limited to three average monthly salaries for CEOs and members of the management board of certain state-owned companies.

Notice Period in Russia

• An employee must give two weeks' notice to the employer.
• An employee who is a chief executive officer or a member of the management board must give notice at least one month before the proposed termination date.
• An employment contract can be terminated before the expiration of the notice period by mutual agreement.

Severance in Russia

• Severance payments depend on the grounds for termination.
• Employees terminated due to liquidation or redundancy are entitled to a severance payment equal to their average monthly wage.
• Additionally, the employer must pay the dismissed employee their average monthly salary during the period they are looking for a new job (but for no longer than two months from the date of termination).
• In exceptional cases, an employee can receive their average monthly salary for a third month following the date of termination, based on a decision of the Employment Agency (if the employee addressed that body within two weeks of dismissal and was not employed).
• An employment agreement or a collective bargaining agreement can provide for a higher severance pay.
• Chief executive officers (CEOs) of a company and members of the management board who are dismissed without cause by a decision of the company's authorized body are entitled to a severance payment equivalent to at least three average monthly salaries.
• This severance payment is limited to three average monthly salaries for CEOs and members of the management board of certain state-owned companies.

Russia Salary and Wages

13 / 14th Month Salary in Russia

• No
• There is no statutory requirement to pay the 13th or 14th month salary.
• However, the payment of bonuses is sector specific.
• E.g. the banking sector pays performance based bonuses.

• Starting from 2023, a single rate of insurance premiums has been established:
  • within the established single limit value of the base for calculating insurance premiums - 30 percent
  • over the established single limit value of the base for calculating insurance premiums - 15.1 percent
• From payments in favor of insured persons who are employed in certain types of work, insurers must also pay contributions to compulsory pension insurance at additional rates:
  • 9% (for underground work, for work with harmful working conditions and in hot shops)
  • 6%.(for example, employed in work with difficult working conditions, in underground and open-cast mining for coal mining , oil shale and other minerals, at work with increased intensity and severity in the textile industry, etc.)

Immigration Russia

• Effective from 1 January 2015, foreign nationals who apply for a work permit, patent, temporary residence permit or permanent residence permit are required to present a certificate confirming their knowledge of Russian language, history and basics of Russian law. 
• This requirement does not apply to the processing of work permits and permanent residence permits for highly qualified specialists (HQSs). 
• In general, any foreign citizen who works in the Russian Federation must hold a work permit or patent, and the employer or purchaser of work (services) of such foreign citizen must hold a valid employer permit to engage such an individual (when applicable). 

Work Permit

• The Russian Federation has entered into treaties simplifying the Russian work permit application process with France and Korea (South). 
• It is never necessary to obtain a work permit or patent, and permit for the engagement and use of foreign workers with respect to certain workers, including the following: 

• Citizens of Armenia, Belarus, Kazakhstan and Kyrgyzstan 
• Temporary residents of the Russian Federation 
• Permanent residents of the Russian Federation 
• Refugees and individuals with temporary shelter in the Russian Federation
• Employees of diplomatic missions, consulates and international organizations (with respect to their work for such organizations) 
• Employees of foreign legal entities engaged in the installation, installation supervision, servicing, warranty servicing and after guarantee repairs of installed equipment manufactured or supplied by those foreign legal entities 
• Journalists accredited in the Russian Federation 

• The procedure applicable for individuals who are not HQSs and who require a visa to enter the Russian Federation is discussed below. 
• If no exemption applies, the company must submit a forecast to the local Interdepartmental Committee setting out the company’s expectations for the number and profile of foreign employees needed in the following year. 
• If the company fails to complete this submission or properly include in it a foreign employee for whom it will apply for a work permit, a refusal to issue a work permit may result. 
• The deadline for submitting a forecast application varies by region.
• A list of positions that do not require a forecast (quota) approved upfront also exists. 
• The following are the steps for obtaining employer and employee permits with respect to citizens of countries requiring visas to enter the Russian Federation: 

• • Applying for a conclusion on the expediency of the engagement of foreign labor from the Federal Employment Service 
  • Applying for a permit for the engagement of foreign labor from the Ministry of Internal Affairs 
  • Applying for a work permit for a foreign employee from the Ministry of Internal Affairs

Special regime for Highly Qualified Specialists

• A beneficial immigration regime is available for highly qualified foreign nationals working in the Russian Federation who are employed by Russian companies or Russian branches and representative offices of foreign companies. 
• These individuals are referred to as HQSs. 
• For this purpose, an HQS is a person who receives earnings not less than RUB167,000 per month for work performed in the Russian Federation (with a minor exemption applicable for limited categories of employers; that is, a decreased amount of the monthly salary for HQSs employed by companies operating in particular fields).
• A simplified quota-free, one-step application procedure for work permits and visas is established for HQSs intending to work in the Russian Federation. 
• HQSs may apply for work permits and work visas that are valid for three years with the opportunity to extend their validity for subsequent three-year periods, as compared to one-year work permits and visas received by other foreigners. 
• Employers engaging HQSs are required to notify the immigration authorities on a quarterly basis with respect to the fulfillment of the obligations regarding the payment of earnings (remuneration) to HQSs. 
• The notification must be sent no later than the last working day of the month following the reporting quarter. 
• HQSs and their accompanying family members (if any) must have private medical insurance valid in the Russian Federation, which can be arranged either by HQSs or their employers. 
• The immigration law also contains a requirement for employers engaging HQSs to submit quarterly reports to the immigration authorities on salaries and remuneration paid to HQSs.

Value Added Tax (VAT) in Russia

• Starting from 1 January 2019, the standard value-added tax (VAT) rate is 20% (with a lower rate of 10% for certain basic foodstuffs, children's clothing, medicines and medical goods, and printed publications).

Mandatory Benefits in Russia

• These are mandatory benefits as postulated by law
• These include probationary period, annual leave, public holidays, sick leave, maternity leave, overtime pay, severance pay and 13th month pay.
• Mandatory benefits also include social security benefits.

Payroll Accrual in  Russia

Payroll Accruals Additional Information

Accrued Benefits in Russia

Why use Global Expansion to hire in Russia

Establishing a branch office or subsidiary in Russia can be time-consuming, expensive and complex. With such a robust labor market in place, one must pay great attention to detail when structuring employment because Russia labor laws are complex.

The company also has a responsibility to comply with specific employment practices dictated by Russia law to maintain its good standing as an equal opportunity employer.

Global Expansion makes it easy for you to expand into Russia. We'll help you hire your candidate of choice, handle HR matters and payroll, and ensure that you comply with local laws without the burden of setting up a foreign branch office or subsidiary. In addition, you'll have complete control and direction over your employees.

We enable you to stay in control of everything. Our Russia Global Professional Employer Organization (PEO) and Employer of Record (EOR) solution provides you with peace of mind to focus on running your company and the security to enter new markets.