Foreign Nationals Employment In Russia - Employee Rights/ Labour Relations

Employment relations in Russia are governed by the Labor Code of the Russian Federation (the "Labor Code") as well as by a number of other legal acts regulating employment and related, such as social and medical security, matters. Where foreign nationals are employed migration law rules also apply. Legal regimes enjoyed by employees depend on the country of origin of such employees therefore employment and related rights of Russians and those of foreigners may differ in certain situations. This is due to the more relaxed rules applicable to the citizens of the Eurasian Economic Union (whose rights are generally equalled to those of the Russian citizens) and citizens of the CIS countries as compared to the rules governing relations with citizens of other foreign countries. The latter are discussed below in more details.

As the general rule, in order to employ foreign citizens, employers in Russia shall make sure they and/or their employees possess:

permission to hire foreign citizens issued to the employer;
work permit issued to each employee - foreign citizen; and
work visa for every foreign citizen, before such foreign citizen is employed and/or actually commences work in Russia.

Starting from 13 December 2014, a foreign employee may be hired provided that he/she has a medical insurance agreement (policy) or the right to receive medical aid on the basis of an agreement entered into between the employer and a medical organisation for the provision of paid medical services to the employee, unless otherwise is provided for by Federal Laws or international treaties of the Russian Federation, with respect to temporary residing foreign citizens.

I. Permission to hire foreign citizens

An employer or a customer of works (services) may employ foreign citizens without a permission to hire foreign citizens, and such citizens may work in Russia without work permits, in particular, if they fall under any of the following categories:

persons holding permanent or temporary residence permits;
employees of foreign companies (manufacturers or suppliers) performing assembly works, warranty servicing and post-warranty servicing of technological equipment imported into Russia;
journalists accredited in Russia;
employees of accredited representative offices of foreign legal entities, within the number approved by the authorised state agency that granted the respective accreditation on the basis of the reciprocity principle, in accordance with international treaties to which Russia is a party.

Furthermore, there is no obligation to obtain a permission to hire foreign citizens in a number of other cases, in particular, if such citizens:

do not require a visa to come to Russia (i.e., citizens of CIS countries);
are highly qualified specialists or members of their families;
study in Russia in a professional education or higher education institution in a basic education programme with the state accreditation;
commissioned to Russia by a foreign profit-making organisation registered in the territory of a state-member of WTO to be employed in Russia in a branch/representative office or a subsidiary of such organization;
are engaged and employed for the purposes of implementation of the innovation center "Skolkovo" project;
are engaged and employed in the territory of priority social-economic development by the employers which are deemed the residents of such territories under the laws of the Russian Federation;
are engaged and employed in the territory of a free port Vladivostok by the employers which are deemed the residents of this territory under the laws of the Russian Federation;
are invited to Russia as medical, pedagogical or scientific professionals to be engaged in the territory of the international medical cluster.

A permission to hire foreign citizens is issued by the Federal Migration Service of the Russian Federation (FMS) or its territorial body having considered information on the availability of free working places and vacant positions, which the employer should submit on monthly basis to the Russian employment service.

II. Work permits

Work permits for foreign citizens are issued within a quota, which is established every year by the Government of the Russian Federation and distributed by the Ministry of Employment among the constituent entities of the Russian Federation and professional groups.

Regardless of the quota, work permits are issued to the following persons:

foreign citizens being employed in the professions (specialties, positions) included in the list approved by the Ministry of Employment;
foreign citizens being employed for the purposes of the Skolkovo project;
highly qualified specialists and members of their families;
citizens of the Ukraine and stateless persons permanently residing in the Ukraine that arrive in Russia in mass order, due to an extreme situation.

A work permit is issued for the term of temporary residence of a foreign citizen in Russia or for the term of an employment contract or a contract for provision of services or performance of works, but not for more than one year from the date of arrival of the foreign citizen in Russia, except for certain cases.

An employer or customer of services/works may engage a foreign citizen, according to the profession (specialty, position) specified in the work permit, and only in the constituent entity of the Russian Federation within the territory of which the permit is issued.

In order to obtain a work permit, a foreign citizen who arrived in Russia on a visa-free basis, should apply in person or through authorised representatives to the FMS or its territorial body by filing an application and supporting documents. Work permits for foreign citizens, who arrived in Russia under visas shall be obtained by the respective employer.

III. Patents

Starting from 1 January 2015, according to the Federal Law dated 24 November 2014 No. 357-FZ, foreign citizens who arrive in Russia on a visa-free basis (except for certain categories of citizens) may be employed on the basis of patents, rather than work permits.

A patent is a document confirming the right of a foreign citizen to be temporarily employed in the territory of a certain constituent entity (region) of the Russian Federation.

The following categories of employers and customers are granted the right to engage foreign citizens who are above the age of 18, lawfully stay in the territory of Russia and have the respective patents:

legal entities or individual entrepreneurs who engaged foreign citizens before under work permits, except for foreign citizens temporary present in Russia on visa-free basis:
- highly qualified specialists and members of their, as well as persons studying in Russia full time in a professional educational organization or a higher educational organization that has the accreditation of the basic professional educational program (except for certain citizens specified by the law) who still require work permits;
- foreign citizens who obtained work permits before 1 January 2015 (such permits are deemed effective until their expiry or revocation by the issuing authority).
private notaries, lawyers or other persons whose professional activities are subject to state registration and(or) licensing;
Russian citizens - for personal, household and similar purposes not related to the business activity performed by the employer or customer.

To obtain a patent, a foreign citizen within 30 calendar days from the date of arrival in Russia must submit personally or through an organization authorized by the territorial authority of FMS an application for issuing of a patent together with the required documents, including an identity document, a migration card indicating work as the purpose of his/her visit and marked by the customs control authority on the entry of the foreign citizen in Russia, or with the mark of the territorial FMS authority on the issue of the migration card, a voluntary medical insurance agreement (policy) valid in the territory of Russia for the duration of the employment.

A foreign citizen, when applying for a work permit or a patent, should confirm knowledge of Russian language, history of Russia and fundamentals of Russian law by the respective certificate or a nationally recognised document on education and/or qualification (unless otherwise is provided for by an international treaty of the Russian Federation). Highly qualified specialists, journalists working for mass media that publish in foreign languages and foreign citizens who are studying and working in Russia, are exempted from this obligation.

Until 1 January 2016, a foreign citizen may apply for a patent through his/her authorized representative.

A patent is issued to a foreign citizen for a period from 1 to 12 months. The patent validity term may be repeatedly extended for a period of 1 month, provided that the total term of the patent taking into account all the extensions may not exceed 12 months from the date of its issue.

A foreign citizen may not work outside of the constituent entity of Russia where he/she was granted the patent. In order to have the right to work in the territory of another constituent entity of the Russian Federation, a foreign citizen must apply for a patent to the territorial FMS authority in the respective constituent entity. If the term of a patent has not been renewed or a patent was revoked, the foreign citizen upon the expiry of his/her temporary stay in Russia must leave its territory.

If the term of a patent has not been renewed, or a patent was revoked, the foreign citizen, upon the expiry of his/her temporary stay in Russia, must leave the country.

IV. Visas

Foreign citizens are not permitted to work in Russia if they have business visas rather than work visas. A business visa is issued specifically for business trips to Russia (e.g., conducting negotiations, entering into contracts, or participating in conferences, exhibitions and other business events). Foreign citizens are entitled to stay in Russia under business visas for no more than 90 calendar days out of a 180-day period.

A common business visa is issued for the period of up to 1 year (to foreign citizens - representatives or employees of a major foreign company making investments in Russia or a company participating in the implementation of "Skolkovo" innovation center or an international financial center in Russia that comply with the criteria established by the Government of the Russian Federation a business visa is issued for the term 5 years) and a common work visa – for the term of an employment/works or services contract, but no more than 3 years, with subsequent extension of the term of the visa for the term of the employment contract or a civil law contract for the performance of works (provision of services), but no more than for 3 years in each case of such extension.

Every time a foreign citizen enters Russia, or leaves for another region of Russia (changes his/her residence in Russia), the migration control requirements apply: upon arrival at the destination, the foreign citizen should provide to the receiving party (an employer/a person who provided support in connection with obtaining a visa or the administration of a hotel where he/she is staying or the landlord) the identity document and the migration card filled in at the Russian border, and the receiving party is obliged to notify migration authority of the arrival of the foreign citizen within 7 business days after the date of his/her arrival.

Citizens of Kazakhstan and Belarus need not register with migration authorities if the period of their stay in Russia is less than 30 days from the date of entry.

V. Highly qualified specialists

The procedure for obtaining work permits and work visas is simplified with respect to highly qualified specialists (HQS) – foreign employees with professional skills, knowledge and the proper qualifications in a specific area, the monthly remuneration of each of which is at least RUB 167,000gross (at least RUB 83,500 million gross – for foreign citizens employed by legal entities conducting activities in Crimea and Sevastopol, for scientific professionals or tutors invited for scientific and research or pedagogical activity under educational programs with the state accreditation; specialists being engaged by residents of industrial, tourist-recreational, port special economic (except for individual entrepreneurs); Russian profit-making organizations, Russian scientific organizations and other organizations engaged in activities in IT domain and having the state accreditation as such (except for organizations with the status of a resident of a technology and innovation special economic zone)) and at least RUB 58,500 gross – for foreign citizens employed by residents of a technical research and implementation zone (except for individual entrepreneurs)).

A work permit for an HQS is issued within 14 business days from the date of submission of the application and the required documents to the migration authority, and the employer is exempted from fulfilling a number of formalities (obtaining a quota and permit to hire foreign employees, etc.). In addition, a work permit for an HQS is valid for up to 3 years. Furthermore, if an HQS is supposed to work in the territories of several regions of Russia, the work permit will be issued to be effective in the respective regions.

HQSs and members of their families are exempt from the migration control procedures, if they arrive and stay in Russia for a period not exceeding 90 days (30 days if they travel to another region in Russia). Should HQSs and their family members stay in Russia for more than 90 days (or 30 days travelling in another region), they should register with migration authorities within 7 days from the date of arrival.

Starting from 1 January 2015 employers and customers of works (services) engaging for employment activities HQSs as the general rule should notify a territorial authority of FMS in the constituent entity where the respective HQSs are employed, on entering and termination (rescission) of the employment contracts or works/services contracts in term not later than 3 business days from the date of entering or termination (rescission) of the contract.

Employers and customers of works (services) engaging for employment activities HQSs are also under the obligation to notify FMS or its authorised territorial body on quarterly basis on performance of their obligations on payment of salary (fees) to HQSs.

VI. Terms for issuing documents and liability

The procedures and required documents for hiring foreign citizens vary, depending on whether or not the foreign citizen requires a Russian visa. In practice, the process of obtaining a permission to hire foreign citizens, individual work permits and work visas in Moscow may take from 4 to 6 months to complete. In other regions of Russia, this period may differ.

Failure to comply with the requirements for hiring foreign citizens entails an administrative fine for the employer in the amount of up to RUB 800,000 (up to RUB 1 million if a breach is committed in Moscow, Moscow Region, St. Petersburg or Leningrad Region) or suspension of its activities for up to 90 days and a fine in the amount of up to RUB 50,000 (up to RUB 70,000 if a breach is committed in Moscow, Moscow Region, St. Petersburg or Leningrad Region) for the employer's officers.

Employment without a work permit or a patent by a foreign citizen in Russia where such work permit or patent is required under the federal law or employment by a foreign citizen in Russia under the profession (specialty, position, type of employment activity) which is not specified in the work permit or the patentor employment by a foreign citizen in Russia not in the territory of the constituent entity of the Russian Federation where the work permit or the patent or the residence permit is issued to the foreign citizen leads to sanctions being imposed on the foreign citizen as well. Administrative fine in such a case amounts up to RUB 5,000 (RUB 7,000 if the breach is committed in Moscow, Moscow Region, St. Petersburg or Leningrad Region), deportation of the foreign citizen being another consequence of the breach.

A breach by a foreign citizen of the term for applying for a patent involves an administrative fine in the amount from RUB 10,000 to RUB 15,000.

VII. Employment contract, hiring and dismissal of foreign employees

Russian labor laws apply to employment relations with foreign citizens, entities established with participation of foreign citizens, international organizations and foreign entities in the territory of Russia, unless otherwise is provided for by Federal Laws or international treaties of the Russian Federation.

An employment contract should be entered into in writing and include certain mandatory conditions, in particular:

the place of work with indication of a subdivision and its place of location;
labor function (work at a particular position in accordance with the personnel list;
payment conditions (i.e. the amount of a tariff rate or salary of the employee, supplementary payments, allowances);
conditions determining the character of work (moving, travelling, in the route etc.);
conditions of work at a work place.

An employment contract with a foreign national or a stateless person (hereinafter - the 'foreign employee') along with other information required by the Labor Code must include the information on:

work permit or patent;
residence permit or permit for temporary residence;
the grounds for providing medical aid to the respective employee during the term of the employment contract, including details of a voluntary medical insurance contract (policy) or an contract entered into between the employer and medical organization for provision of paid medical services to the employee.

Information referred to above may be omitted in the employment contract where respective documents are not required for employment of foreign nationals in accordance with Federal Laws or international treaties of the Russian Federation.

As the general rule an employment contract is concluded for an indefinite time period. An employment contract for term may be entered into:

if employment relations may not be established for an indefinite time period due to a character of work or the conditions of its performance, in particular, for a term of performance of temporary (up to 2 months) or season works; with persons being employed with entities established for a specific term or for performance of specific work; with persons being employed for performance of specific work the completion of which may not be defined by a particular date;
upon agreement of the parties: with persons being employed by small business entities with the total number of employees no more than 35 (in retail trade – 20 employees); with CEO, deputy CEOs, chief accountants; with persons employed for part-time work.

A work permit may be submitted by a foreign employee to the employer after the employment contract is entered into if such contract is required in order to obtain the work permit. In this case the employment contract shall take effect not earlier than the date of obtaining of the work permit by the foreign employee.

The terms and conditions of an employment contract may be changed upon agreement of the parties except for cases provided for by the Labor Code, in particular, if due to the reasons in connection with alteration of organizational or technological conditions of work (e.g. changes in technics and technology of manufacturing, restructuring of manufacturing) the terms and conditions of an employment contract may not stay the same they may be changed unilaterally by the employer subject to a notification of an employee at least 2 months in advance.

An employment contract may be terminated, in particular:

at any time upon agreement of the parties;
upon initiative of an employee subject to notification of the employer at least 2 weeks in advance unless another term is established by federal laws;
upon initiative of the employee in cases provided for by the Labor Code and other federal laws, in particular in the event of:
- liquidation of the employer's legal entity or termination of activity by the employer – individual entrepreneur;
- reduction of the number of employees or positions in the personnel list;
- a failure by an employee to comply with the requirements to the position due to insufficient qualifications confirmed by the results of attestation;
- change of the owner of the employer's legal entity (with respect to CEO, deputy CEOs, chief accountants);
- repeated failure by an employee to perform his/her employment duties without valid reasons if a disciplinary penalty has already been imposed on the employee;
- one-time gross breach by an employee of his/her employment duties (absence from work without a valid reason; appearance at work in the state of alcoholic, narcotic or another toxic intoxication; disclosure of secret information protected by the law that became known to an employee in the course of performance of his/her employment duties; theft, embezzlement of third parties property or causing damage to or destroying it intentionally).

A range of additional grounds for termination of an employment agreement with a foreign employee (unless otherwise is provided by Federal Laws or international treaties of the Russian Federation) are established:

suspension, expiry, cancellation of a permit to engage foreign work force issued to the employer - in relation to foreign employees temporarily staying in the Russian Federation;
cancellation or expiry of a work permit or patent - in relation to foreign employees temporarily staying in the Russian Federation;
cancellation or expiry of a temporary residence permit - in relation to foreign employees temporarily residing in the Russian Federation;
cancellation or expiry of a residence permit - in relation to foreign employees permanently residing in the Russian Federation;
expiry of the term of a voluntary medical insurance agreement (policy) or termination of an agreement entered into between the employer and a medical organization for provision to a foreign employee of paid medical services in the territory of the Russian Federation;
bringing the number of foreign employees in line with restrictions on foreign work force engagement established by Federal Laws, decrees of the President of the Russian Federation or resolutions of the Government;
impossibility to provide the employee with the same job upon expiry of his/her temporary transfer in accordance with Article 327.4 p.2 of the Labor Code;
impossibility of a temporary transfer of the employee in accordance with Article 327.4 p.2 of the Labor Code.

The foreign employee should be notified in writing on termination of the employment contract on the grounds specified in paragraphs 7 and 8 above not later than 3 calendar days prior to the dismissal.

In the event the employment contract is terminated due to the suspension or cancellation of a permit to engage foreign work force on the basis of which the work permit was issued to the foreign employee the latter should be paid a severance payment at the rate of two-week average earnings.

Employers engaging foreign citizens as the general rule should notify a territorial authority of FMS in the constituent entity where such employees are employed on entering into and on termination of employment contracts within 3 business days from the date of conclusion/termination of each contract.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Russian Federation: Foreign Nationals Employment In Russia