Russia: Greater liability for employers and new requirements with respect to processing of employees' personal data and hiring of foreign citizens

1. Greater liability for employers contravening labour laws and labour safety laws

The latest set of amendments to the Russian Code on Administrative Offences (the "Code") came into force on 1 January 2015. These new rules create a greater level of liability for non-compliance with labour laws and labour safety requirements through an extension of the limitation period for bringing a claim against the offending employer, the creation of new 'special offences', and an increase in the maximum level of fines for each category of violations.

In particular, the limitation period within which an administrative claim can be brought against an employer for failure to comply with labour laws has been extended to one year (from the previous limit of two months). The maximum administrative fine that may be imposed on an employer's officer for non-compliance with labour law requirements has been increased to RUB 20,000 (approx. EUR 265). Furthermore, in the event of a recurring offence, the officer may be disqualified for a term of up to three years. The maximum administrative sanctions that may be imposed on legal entities include an administrative fine of RUB 200,000 (approx. EUR 2,655) and/or administrative suspension of activities for up to 90 days.

Notably, in accordance with the current law enforcement and court practice, both the officer and the legal entity may be held liable for the offence. Moreover, if the same offence is simultaneously committed against a number of employees, the total amount of administrative fines imposed on the officer or the entity for such offences may be calculated taking into account the total number of employees affected by the relevant offence.

2. The Russian Labour Code sets out special rules for the regulation of employment of foreign citizens

The new rules regulating employment of foreign citizens have come into force on 13 December 2014 and, in particular, include the following:

• A specific procedure for the conclusion of employment agreements with foreign nationals

As a general rule, employment agreements with foreign employees have to be concluded for an indefinite period. Entering into fixed-term employment agreements with foreign citizens is allowed only on the general grounds established by Article 59 of the Russian Labour Code. Conclusion of an employment agreement for a term equivalent to the term of the work permit is now prohibited.

Employment agreements with foreign employees should contain the following data:

• data on the work permit, the patent, the temporary residence permit or the residence permit from the Russian Federation (as applicable); and
• details of the voluntary medical insurance contract (policy) or the contract for the provision of paid medical services to the foreign employee.
• Additional grounds for suspending foreign employees from work, terminating their employment and payment of severance upon termination.

All such additional grounds for the suspension of a foreign employee from work and for the termination of his/her employment are connected with the suspension, expiration or cancelation of the employee's work permit, patent, temporary residence permit or residence permit and expiration of the voluntary medical insurance agreement (policy) or contract for the provision of paid medical services to the employee.

3. Foreign companies' representative offices in Russia are now eligible for the highly qualified foreign specialist regime

As of 1 January 2015, representative offices of foreign companies may apply to a fast-track simplified procedure for obtaining work visas and work permits for their foreign employees who are classified as Highly Qualified Foreign Specialists (the "HQFS"). The requirements for applying for the HQFS procedure are the same as those when the employer is a Russian commercial legal entity or a branch, namely:

• the HQFS's annual gross salary being at least 2m RUB (approx. EUR 43,270 as at 25 June 2014);
• the employer taking out voluntary medical insurance not only for the HQFS themselves but also for their accompanying family members and such cover being effective immediately upon their arrival in Russia; and
• the employer having, upon the filing of their application, (i) not been subject to any administrative penalties for the illegal employment of foreign nationals in Russia during the preceding two years and (ii) complied with any rulings ordering administrative penalties for this type of administrative offence.

4. Foreigners are to prove knowledge of the Russian language and civilisation to work or reside in Russia

As of 1 January 2015 foreigners wishing to work or reside in Russia need to prove their command of the Russian language, Russian history and fundamentals of Russian law (the "Russian Language and Civilisation"). All foreigners who obtained their permanent residence and work permits before 1 January 2015 will only be required to prove the Russian Language and Civilisation requirements when applying to renew these permits.

Highly qualified specialists and their relatives will not need to satisfy the Russian Language and Civilisation requirements. The law provides for additional exemptions, such as full-time foreign students with accredited educational institutions in Russia.