Russia: Higher penalties for breaches of employment legislation

On 1 January 2015 new amendments governing the liability of employers for breaches of Russian employment legislation entered into force. In particular, the general penalty for breach of employment legislation has been increased. Moreover, some new penalties have been introduced for specific types of breaches. An additional penalty for repeated breaches has also been introduced.

According to the new rules, the penalty for breach of employment legislation has been increased from a maximum of 30,000 Roubles (approximately USD 535) to a maximum of 50,000 Roubles (approximately USD 892). In case of a repeated breach of employment legislation the penalty may be up to 70,000 Roubles (approximately USD 1,250).

The amendments also introduce specific penalties for non-execution or improper execution of an employment agreement with an employee and for conclusion of a civil law contract in case of de facto employment relations. The penalty for such violations may amount to up to 100,000 Roubles (approximately USD 1,785) or for a repeated breach up to 200,000 Roubles (approximately USD 3,571).

Moreover, in light of the new Federal Law No. 426-FZ “On special assessment of work conditions” that entered into force on 1 January 2014 and that imposes on the employers, inter alia, an obligation to conduct assessment of all types of workplaces (subject to limited exceptions), the failure to conduct or properly conduct such assessment or to comply with other occupation safety rules is subject to a penalty of up to 80,000 Roubles (approximately USD 1,428). A separate penalty of up to 130,000 Roubles (approximately USD 2,321) is imposed in cases where an employee actually performs his/her labour duties without obligatory training and examination on occupational safety rules as well as without compulsory medical examinations. Failure to provide employees with personal protection equipment is also penalised with a fine amounting to up to 150,000 Roubles (approximately USD 2,678). Any repeated breaches of occupational safety related rules may lead to a penalty of up to 200,000 (approximately USD 3,571) Roubles being imposed or an administrative suspension of business activity of the employer for up to 90 days.

Actions for employers

In light of the above amendments, the employers should be aware of the increased penalty and take care when structuring any employment related relationships with individuals (secondments, outsourcing, etc.). They should also make sure to comply with the new law governing special assessment of work conditions and occupational safety rules in general.