Recent developments

On 2 December 2014 a new federal law1 was announced that introduces changes to labor legislation and regulates the work of employees who are foreign citizens or stateless individuals.

There are new requirements for entering into and terminating employment contracts with foreign citizens, procedures for the temporary transfer of foreign workers to other positions, and procedures for the dismissal of such workers.

The changes to the Labor Code enter into force on 13 December 2014.

Also, on 2 December 2014 a new federal law2 was announced that creates new rules regarding social welfare insurance for foreign workers. These changes enter into force on 1 January 2015.

What the Law says

Changes to the Labor Code

In accordance with chapter 50.1, which will be added to the Labor Code of the Russian Federation, employment contracts with foreign workers should be concluded for an unspecified period of time. Specific-term employment contracts with foreign workers may be concluded only in accordance with the general rules and in the cases envisaged by Article 59 of the Labor Code.

An employment contract with a foreign worker must indicate on what basis he or she is working in Russia, for example a work permit, patent, temporary residence permit or permanent residence card.

If the foreigner is working on the basis of a work permit or patent, his or her employment contract must provide for medical coverage and give details of the medical insurance policy or medical coverage agreement.

These new legislative provisions allow an employer to temporarily transfer a foreign worker to another position regardless of the profession specified in the work permit or patent. Such temporary transfers can be for a period of up to one month, and no more than once per year. 

If a hiring permit for foreign workers should expire or be suspended, or if any of the following should expire: a work permit, patent, temporary residence permit, permanent residence card, voluntary medical insurance agreement (policy) or medical coverage agreement, then the employer is obligated to suspend the foreign worker from work.

The law also establishes additional grounds for terminating an employment contract with a foreign worker, including the expiry of a work permit, patent, voluntary medical insurance agreement (policy) or medical coverage agreement.

Changes to legislation on mandatory social welfare insurance

Foreign citizens temporarily staying in Russia (i.e. foreign citizens staying in Russia on the basis of visas and work permits, with the exception of highly qualified specialists) will be entitled to receive temporary disability benefits, provided that the insurer has paid insurance premiums on their behalf for six months prior to the insurance claim.

Insurance payments made by the employer to the Social Insurance Fund for foreign citizens temporarily staying in Russia (with the exception of highly qualified specialists) will amount to 1.8% of the workers’ salaries.

Actions to consider

We recommend that companies hiring foreign workers bring their employment contracts with such workers into line with the new labor law provisions.

We also recommend that they check whether their foreign workers have voluntary medical insurance agreements (policies) or medical coverage agreements.