23 December 2016

Key Amendments to the Labor Law in 2017

Dear Colleagues, we have prepared for you an overview of the key amendments to the labor law which have come into force between the end of 2016 and the beginning of 2017.

Minimum amount of pay is to be raised to RUB 7800

During 2017, the minimum amount of pay is to be increased by 4% to RUB 7800 effective July 1st.

Personnel accounting for a micro-enterprise

Effective 01.01.17, micro-enterprises shall have the right not to adopt, in full or in part, local normative acts which contain the following norms:

·         Regulations on internal work order;

·         Terms of reference on work remuneration;

·         Terms of reference on bonuses;

·         Shift schedule;

·         Other personnel related local and normative acts.

However, in a case like that, the employer shall include these terms and conditions in a generic employment contract approved by the Government of the Russian Federation.

Referred to micro-enterprises shall be legal entities or private entrepreneurs who qualify for the following criteria: their annual turnover does not exceed RUB 120 mn., the company employs no more than 15 persons, including the director or the owner of the business, the holding of other private, state run or municipal companies shall comprise no more than 20% of the equity capital. If a company ceases to be eligible for the status of a micro-enterprise, then within a four months’ period it will have to execute personnel related documents

Procedure has been established for an independent assessment of employees’  qualifications to be conducted

Effective 01.01.2017, Federal law dated 03.07.2016 No. 238 “On Independent Assessment of Qualifications” is due to enter into force, which regulates a relationship which arises in the conduct of an independent assessment of the employees’ qualifications or the qualifications of  the persons who claim to be able to engage in a particular type of work.

The independent assessment of the qualifications shall be carried out in the form of a professional examination, which is to be conducted at the initiative of the job seeker, other physical persons and (or) legal entities to whom the employer has referred the job seeker. Based on the results of the examination, the job seeker shall be issued a certificate of qualifications or in the case of him or her getting an unsatisfactory mark for the examination, an opinion of the examination conducted with recommendations for the job seeker.

The employer shall send an employee to undergo the independent assessment of his or her qualifications with the employee having given his or her written consent and at the expense of the employer. In a case like this, for the period during which the employee is undergoing the independent assessment of his or her qualifications, it shall be provided that his or her job is to be retained in his or her name as well as the average wage or salary is to be paid and travel expenses in connection with the independent assessment are to be covered.

Chief accountants’ and chief executive officers’  salaries have been made dependent on those of rank-and-file employees

Pay of the managerial staff of the state run and municipal organizations (directors, chief accountants) shall depend on the pay of the rank-and-file employees. The limit level of such a ratio shall be established by the Federal Government, regional and municipals authorities.

We also call your attention to the changes in the labor law which came into effect on October 3rd 2016:

Dates of wages and salaries payment have been changed

Amendments to article 136 of the Labor law of the Russian Federation introduced by Federal law dated 03.07.16 No. 272, have come into force under which the dates are appointed for payment of wages and salaries which are to be no later than the 15th day of the following month.

The amount of compensation has been raised for delay with disbursement of wages and salaries, vacation pay and other job related payments

Federal law dated July 3-th 2016 No. 272, which entered into force on October 3rd 2016, toughened liability for delay with disbursement of pay. Now for untimely disbursement of wages and salaries as well as other benefits, due to an employee, the employer shall obliged to pay the employee a compensation in the amount of no less than 1/150 of the existing key interest rate of the Central Bank of the Russian Federation operating as at the time, of the amounts which have not been paid in due time per each day of delay, beginning from the day following the appointed date of payment until the day of actual settlement inclusive.

List of reasons for conducting work inspections using an unscheduled check

As per the addenda introduced in paragraph 4, part 7, article 360 of the Labor Code of the Russian Federation, submission to the federal labor inspectorate of information about acts of violation by employers of the requirements of the labor law and other legal normative acts containing the labor law norms, including those which have resulted in nonpayment or incomplete payment, within the stipulated time period,  of wages and salaries , other benefits due to the employees, or awarding  pay in the amount which is less than the amount envisioned by the labor law, shall be grounds for conducting an unscheduled check  by the labor inspectorate.

It is now permitted not to certify entries in employment records with a round seal

Order of the Labor Ministry dated 31.10.2016 No. 588 has amended the Instructions on Completing Employment Records approved by the Labor and Social Development Ministry of the Russian Federation dated October 10-th 2003 No. 69. Now the employers have obtained the official permission not certify entries in the staff’s employment records with a round seal.

Planned legislative initiatives:

Possible changes in the procedure of paying sick leave benefits

It is contemplated that sick leave benefits are to be paid in the amount of 100% of the average pay only to the employees with a length of service of 15 and more years. When the length of service is between 8 and 15 years, 80% of the average pay shall be disbursed, whereas when the length of service is under  8 years, 60% shall be payable. Apart from that, the Labor Ministry proposes increasing the length of service gradually, i.e. between 2017 and 2028. In accordance with the new regulations, in order to obtain full sick leave benefits next year, one would need a length of service equal to 9 years.