Russia: Further changes in law that may increase employers’ costs

New rules on processing and storage of Russian citizens’ personal data

On 1 September 2015 Federal Law No. 242-FZ "On Amendments to Certain Laws of the Russian Federation in Order to Clarify the Procedure for Personal Data Processing in Information and Telecommunications Networks" (the "Law") comes into force.

The Law seeks to change the regulation of personal data processing in information and telecommunications networks, as well as personal data processing in databases.

Importantly, according to the Law the processing of Russian citizens’ personal data can only take place in Russian databases.

This means that a personal data operator will have to ensure that databases which process Russian citizens’ personal data are located within Russia.

However, the Law also provides for some exceptions to this rule that relate to certain goals of personal data processing. The exceptions include achieving the objectives of international treaties or laws, the implementation of an operator’s statutory powers and duties, the administration of justice, the acts of public law entities and organisations that provide state and municipal services, the professional activities of journalists and/or the lawful activities of mass media, or scientific, literary or other creative activities provided that this does not violate a data subject’s rights and legitimate interests.

According to guidance issued by Russian state authorities in response to various enquiries, employers processing employees’ personal data may benefit from the first exemption: in collecting such data employers are fulfilling their statutory duties under the provisions of the Labour Code (i.e. employees’ data will be excluded from the scope of the Law). However, the operator acting as an employer cannot abuse its right not to locate databases in Russia by attempting to bring within the exemption personal data processing otherwise covered by the Law.

We note that the above guidance does not form part of official legislation and therefore, the application of the mentioned exception to employers processing personal data of their employees is still being discussed.

It should also be noted that the Law does not prohibit accessing databases located within Russia from abroad, or impose any special restrictions on the transfer (including cross-border transfers) of personal data from a database located in Russia.

In this regard, the general principles and rules of cross-border transfer of personal data remain unchanged. In many instances the consent of an employee is required for the transfer of his/her personal data abroad, including for a transfer to companies in the same group with the employer.

Cancellation of the requirement for commercial legal entities to have a stamp

According to Federal Law No. 82-FZ dated 6 April 2015 "On Introduction of Changes to Certain Legislative Acts of the Russian Federation due to the Cancellation of the Stamp Requirement for Commercial Legal Entities" commercial legal entities (i.e. joint stock companies, limited liability companies, etc.) are no longer required to have a stamp.

However, commercial legal entities can have a stamp at their discretion (in this case, the fact that the legal entity has a stamp must be stated in its charter).

In view of the above, respective changes were made to the Russian Labour Code pursuant to which employers are now obliged to stamp the internal documents on accidents at work only if the company has a stamp.

Still, an issue arises with regard to stamping other labour documentation. For instance, the Rules on Maintenance of Labour Books dated 16 April 2003 were not changed in this regard and still contain a requirement to stamp entries made by the employer to the employee’s personal labour book.

Officially, the above Rules should apply only to the extent that they do not contradict the federal laws. Therefore, it appears that an employer is allowed not to use a stamp if it does not have one. However, from a practical perspective, given the very conservative approach usually taken by the Russian labour authorities it is still advisable to use a stamp for labour books and other forms of labour documentation established by law and containing a corresponding “stamp area”. In this situation, guidance provided by the Russian Federal Service on Labour and Employment may be followed, according to which the employer may have a separate stamp that is used solely for stamping relevant HR documentation.

Change to salary requirement for highly qualified foreign specialists

As of 24 April 2015 minor changes were introduced to the rules applicable to foreign citizens employed as Highly Qualified Foreign Specialists (the “HQFS”). In particular, the requirement to pay HQFS a certain minimum salary was changed as follows:

• Previous rule: salary should not be less than 2 million Roubles (approx. EUR 33,500) per year;
• New rule: salary should not be less than 167,000 Roubles (approx. EUR 2,800) per month;
• New rule: even if a HQFS is on sick leave, unpaid leave or is not paid (is underpaid) for any other reasons, the employer is to ensure that the HQFS’s quarter remuneration is not less than three times of 167,000 Roubles (approx. EUR 2,800). In other words, if an employer would like to keep HQFS status of an employee, it is required to compensate him/her at the above minimum level even within the periods when the employee does not actually perform his/her job function.