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New legislation has recently been enacted under which “micro-enterprises” are relieved from the obligation to implement a full set of mandatory HR policies.
An organization is a micro-enterprise if it meets the following requirements:
- Its average number of employees during the preceding calendar year did not exceed 15 people.
- Its annual income of all commercial activities during the preceding calendar year did not exceed RUB 120 million ($1,900,000 : £1,450,000 : €1,650,000).
- The total participation rate of the Russian Federation, Russian regions, and municipalities in the charter capital of micro-enterprise shall not exceed 25 percent. In other words, the micro-enterprise cannot be more than 25 percent state owned.
- The total participation rate of other organizations (those that are not small or medium entities, as well as foreign companies) shall not exceed 49 percent.
Under simplified HR requirements, micro-enterprises may choose not to adopt such mandatory local HR policies as Internal Labor Regulations, Personnel Compensation Policy, Bonus Policy, Shifts Schedule, and others. However, while a micro-enterprise may choose not to adopt these policies in full, it is still required to include certain key provisions of such policies in individual employment contracts.
To assist micro-enterprises, the Russian government has approved a standard individual employment contract that meets these requirements. In addition to clauses covering job title, place of employment, and probation period, the standard contract has optional clauses for off-site employees and also allows employers to define in more detail the location of the workplace and to specify the makeup of a business unit.
Comment
These new simplified HR requirements are aimed at reducing the volume of documents a micro-enterprise has to manage, while still maintaining appropriate protection of employees’ labor rights.
Written by Maria Gnutova and Irina Anyukhina of ALRUD Law Firm and Roger James of Ogletree Deakins