Russia: New Employment Protection Rights Include Protection of Wages on Insolvency

A number of pieces of new legislation have been introduced that impact employers.

Companies prohibited from limiting employees’ choice of bank for payment of salary

The State Duma has adopted a wage slavery bill, under which companies may be fined up to RUB 50 000 (approximately EUR 714) for failing to allow employees a choice regarding which bank to receive payment of wages. In cases of repeated violations, the fine can reach RUB 100 000 (approximately EUR 1 428).

The Russian Labour Code will be amended to extend the period of time for an employee to notify his or her employer of a change of bank details to 14 days.

New fines proposed for processing employee data outside of Russia

A draft law would impose fines on an employer for failure to comply with Russia’s so-called “data localization requirement.” Among other things, this requirement specifies that employers, as data controllers, must process employee data inside Russia. The proposal calls for fines of up to RUB 6 000 000 (approximately EUR 82 544) for a first offense and up to RUB 18 000 000 (approximately EUR 247 630) for second and subsequent offenses.

New duties on employers of a dissolved company

Legislation providing additional guarantees for employees dismissed due to liquidation of a company has been submitted to the State Duma. Amendments to the Russian Labour Code will guarantee certain payments to employees and prohibit a company from being liquidated until all the payments are made. These measures are expected to help guarantee that employees discharged due to the liquidation of a company get all benefits in full.

Written by Irina Anyukhina and Maria Gnutova of ALRUD Law Firm and Roger James of Ogletree Deakins

© 2019 ALRUD Law Firm and Ogletree, Deakins, Nash, Smoak & Stewart, P.C.