What is the Nature of Russian Labor Arrangements?

LABOR CONTRACTS

The Labor Code states that a Labor Contract should contain “essential” such as (place of work, commencement of work, position, rights and obligations of the employer and the employee, salary and benefits) and “additional” conditions such as (probation, trial period, confidentiality).

Employment contracts may be concluded for an indefinite term; or a definite term of not more than five years. Contracts with a definite term are only allowed when labor relationships cannot be established for an indefinite term and specific conditions are satisfied.

Definite term contracts are permitted with the following employees:

• Directors, Deputy Directors, Chief Accountants
• Employees working in companies created for a specific project
• Part-time workers (having more than one job)
• Temporary Workers

TRIAL PERIOD

Trial periods (up to a maximum of three months) are permitted to assess the suitability of Employees for a position. Certain categories of employees are not subject to a trial period such as pregnant women, minors, and transferees.

SALARY

If the payment of salary is delayed for more than 15 days, the employee has the right to notify the employer and to stop working. In such cases, the employer may be obliged to reimburse the employee for each idle day in the amount of 2/3 of the average salary (based on actual salary accrued and the actual working time for the last 12 months).

The employer must pay interest for each day of delay of the payment of salary in the amount of 4% of the unpaid salary.

EMPLOYEE RIGHTS

Russian Labor Legislation provides certain guarantees for employees, including among others:

1. Wages for time spent away from work, for the performance of the functions of a trade union officer, appearing in court, going to vote and fulfilling other civic or social responsibilities.
2. Severance pay in certain situations
3. Certain social benefits: maternity leave, paid holidays and vacation time
4. Limited overtime is permitted for certain workers, subject to certain conditions.
   Overtime is payable at the following coefficients:
   1. 1.5 times normal salary per hour for first two hours
   2. 2 times per each subsequent hour
      Employees may demand compensation of overtime in additional days off.
5. In general, employees are entitled to be paid for the twelve days of Russian National Holidays and annual leave of not less than 28 calendar days.
6. Employees are also generally entitled to sick leave benefits, paid by the Social Insurance Fund. The monthly amount of such statutory benefits may not exceed 15,000 rubles.
7. Women are entitled to paid maternity leave for 7 days prior to and after childbirth as well as unpaid leave until the child’s birthday.