Amendments to several legal acts, including the Labour Code, Employment Law, and Tax Code have been introduced by Federal Law No 116-FZ (Law 116-FZ or the Law), which will be enacted in January 2016.

Law 116-FZ clarifies the situation with secondments in Russia, which was not very clear before its enactment. The Law directly prohibits rented labour, which is defined as the labour of an employee pursuant to the order of his/her employer in the interest, and under the authority and control of the individual or legal entity who/which is not his/her employer.

At the same time, Law 116-FZ provides for two cases where the temporary rent of employees is possible.

First, is the outsourcing of personnel by private recruitment agencies. Law 116-FZ regulates the details of such outsourcing, including, the conditions of the labour contracts with personnel, the parties’ responsibilities, and specifics on the transfer of certain categories of personnel (for example, students). Law 116-FZ requires private recruitment agencies to undergo the process of special accreditation.

Second, is the temporary transfer/secondment by a company-employer (which is not a private recruitment agency) of its personnel: (1) to its affiliated company; (2) to a joint stock company where the employer is a party to a shareholders’ agreement in relation to such joint stock company; and (3) to a company which is a party to a shareholders’ agreement with an employer.

Law 116-FZ provides that more detailed rules for secondment will be established by specific legislation which has yet to be adopted.