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1. The question is now off the table of how an employment contract differs from an independent contractor agreement
The Russian Supreme Court has issued a reminder of the main differences between an employment contract and an independent contractor agreement (“ICA”).
- The purpose of an ICA is to perform a specific task over a certain period of time, while an employment contract provides for an employee to have a number of job duties which he/she performs on a regular basis throughout the duration of his/her employment contract.
- The subject of an ICA is one-time work where the result of the service is important. An employment contract regulates work of an employee within the scope of his/her job duties.
- An employee with whom an employment contract has been concluded becomes a member of company’s staff; he/she is subordinated to the employer and follows the company’s internal regulations. The service provider under an ICA retains his/her autonomy.
- Risks that arise in the course of work lie with the service provider when an ICA is concluded and with an employer when an employment contract is concluded.
When an employment contract is disguised as an ICA, a company may face the following consequences:
- an unscheduled audit by the State Labour Inspectorate;
- the ICA may be recognised to be an employment contract;
- a fine of RUB 10,000 to RUB 20,000 for officers and RUB 50,000 to RUB 100,000 for legal entities.
Acsour recommends that its clients pay close attention when they conclude ICAs.
2. The so-called ‘transaction passport’ has been abolished for those involved in foreign trade
Starting from 1 March 2018, authorized banks will not require Russian exporter companies to formalize a so-called “transaction passport” and foreign transaction report forms.
It is now sufficient for foreign trade participants to register, with authorized banks, contracts the amount of obligations under which is more than or equal to:
- RUB 3 million – for import contracts and loan agreements;
- RUB 6 million – for export contracts.
Acsour’s experts will answer your questions regarding the new rules for exporter companies.
3. The procedure for switching tax inspectorate has been simplified
Amendments have been made to the regulations on dealings with a taxpayer and, as a result, starting from 13 February 2018 no reconciliation of accounts is required for the switch to a new tax inspectorate when a company changes its registered address.
Previously, a company was obliged to carry out a reconciliation of accounts with the state budget if it was deregistering and moving to another tax office when its registered address was changed. This process could take quite some time – between two and six months.
Now, a taxpayer is obliged to carry out a mandatory reconciliation of accounts only in the following cases:
- on a quarterly basis with major taxpayers;
- during the deregistration procedure when a company is wound up (reorganized); and
- at a taxpayer’s own initiative.
Acsour monitors the changes in regulations for various procedures and advises you of important improvements.
4. The fight against discrimination: a male employee cannot be denied a supplement to childcare leave allowance
In its ruling dated 4 February 2017 in case No. 33-45444/2017, the Moscow City Court held that the establishment of a supplement to childcare leave allowance solely for female employees constitutes discrimination.
The court has considered the regulations for a company’s employee remuneration scheme, which provided for a supplement to childcare leave allowance. Under the company’s regulations, only women were entitled to such a supplement. On this ground, the employer did not pay the corresponding supplement to a male employee who took childcare leave.
The court recognized the above clause of the regulations to be discriminatory. An employee remuneration scheme should not cite the gender of an employee in the context of receiving the payment.
The employee was compensated for the supplement which accrued over the entire period for which the allowance was paid, as well as for moral harm.
Acsour monitors case law and will inform you of the cases that really matter.
5. An employee may be obliged by an employment contract to notify a change in his/her personal data
The Federal Service for Employment and Labour Relations (abbreviated in Russian to ‘Rostrud’) has stated that an employment contract may stipulate that an employee has an obligation to notify the employer of the change in his/her personal data.
There is no statutory obligation for an employee to advise of a change in his/her name, residence or other personal data. Nonetheless, in order to mitigate its risks from possessing outdated personal data, an employer may formalize such a duty of an employee in the employment contract. This does not contravene the legislation and will help an employee’s personal data to be updated promptly. It will not out the employee in a worse position.
Acsour recommends checking the provisions of employment contracts with employees and making the corresponding amendments to mitigate risks for the employer.
6. A law has been signed to raise the federal monthly minimum wage
Starting from 1 May 2018, the monthly minimum wage will be raised to subsistence level and will amount to RUB 11,163.
Given the change in the minimum monthly wage, an employer will face the following:
- Changes in the calculation of payments for sick leave of employees whose length of service is less than 6 months or whose salary is lower than the monthly minimum wage; and
- Fines, if an employee’s salary is lower than the minimum monthly wage:
- for companies – RUB 30,000 to RUB 50,000, and if discovered on a further occasion — RUB 50,000 to RUB 70,000;
- for a company’s CEO or chief accountant – RUB 1,000 to RUB 5,000, and for a repeat offence — RUB 10,000 to RUB 20,000; and
- disqualification for a period from 1 to 3 years.
Acsour monitors changes in the minimum monthly wage and will advise you of any updates.