Putin’s decrees: end of non-working days, support for business and citizens

On May 11, 2020, the President of Russia approved two consecutive decrees to implement additional measures to support families with children and prolong sanitary protective measures due to the pandemic.

The brief summary of updates, which could be vital for you, is as follows:

• The Russia-wide non-working period with retained salary is finished as of May 12, 2020. However, all governors of the Russian regions are taking the relevant protective and sanitary measures locally based on the epidemic situation in their region.

If the governors make the decision to cease particular businesses due to the pandemic measures, all employees of the affected companies shall be paid their regular salary. We see it as analogous to the non-working period with retained salary. In particular, it is a matter of implementation in Moscow and Moscow Region.

• Strict self-isolation measures still apply to citizens over 65. The governors were instructed that the final say would be with doctors and public health specialists.
• All mass events in the country are further banned without concrete a end date
• Russian citizens with children up to 3 years old are entitled to a monthly allowance of RUB 5,000 for each child from April to June 2020. To receive it, they must reside in Russia and their first child must be born (or adopted) between April 1, 2017 and January 1, 2020.

The same allowance is payable to Russian citizens who are or were entitled to the multiple child allowance (maternity capital) by  July 1, 2020.

Russian citizens with children of 3-16 years of age (turning 16 prior to July 1, 2020) are entitled  to a one-time allowance for each child (also a Russian citizen) in the amount of RUB 10,000 starting July 1, 2020.

The respective families can receive these allowances via the state services portal (Gosuslugi) or through the State Pension Fund’s website until October 1, 2020.

• It was also announced that the minimum amount of the state child care allowance will be doubled (up to RUB 6,751; previously RUB 3,375).

Since we see a general tendency to reduce the protective measures, we recommend that you develop a step-plan for returning employees to business operations. For instance, the relevant continuation of personnel’s work at offices and other workplaces after the temporary remote work regime should be properly formalized by an HR order and/or addendum to the employees’ employment agreements (if applicable).

We also expect that even after lifting the restrictive measures step by step, certain sanitary measures and social distancing rules will remain in effect. Therefore using office space in accordance with such rules and following the recommendations of Rospotrebnadzor will be key elements for a secure and successful resumumption of ordinary business operations.

1. Additionally Vladimir Putin announced a range of measures aimed to support businesses,particularly from the affected industries.For companies in the affected industries (предприятия пострадавших отраслей) all tax payments except VAT and social security payments for the second quarter of the year will be written off.
2. Individual entrepreneurs (IE) will be returned tax on income paid for 2019 and will be subsidized with one minimum wage.
3. Beginning in June, a credit program to support employment will be launched for all companies in the affected industries and socially oriented NGOs. The interest rate will be 2%, while a rate over 2% will be subsidized by the state budget.
4. 85% of the loan will be secured by state guarantees. If the company maintains an employment level of 90% or more, then the loan and interest on it will be written off completely. The loan should be repaid by April 1, 2021. The loan amount is legal minimum wage x employee x months (maximum 6).
5. SMEs that have retained at least 90% of the employees they had on April 1, 2020 will receive a direct subsidy for these employees for April and May in the amount of one minimum legal wage.

In his speech, the president used the term “companies in the affected industries” in Russian original “предприятия пострадавших отраслей”. Our interpretation of this term is that this would be either SME, IE, or companies that operate in an industry affected by the corona virus as established by the order of the government 409 from 02.04.2020.