The procedure for liquidation of legal entities changed

17/07/2020
The procedure for liquidation of legal entities changed

Legislators amended the Labor Code of Russia and the law on state registration of legal entities and individual entrepreneurs. The changes will guarantee that the employees will duly receive all compensation.

From August 13, employers will not be able to liquidate a legal entity until the employees have received severance pay in full.

As a general rule, on the day of dismissal, the employee must receive the average monthly earnings for one month of unemployment. After that, the dismissed employee must be registered with the employment authorities within 14 business days. If he/she has not found a job, he/she can apply to the employer to receive payment for the second and third (if decided by the employment authority) months of unemployment. The former employee can do this no later than 15 working days after the end of the second and third months, respectively, from the date of dismissal. The employer is obliged to settle with the employees within 15 calendar days from the date of his/her application.

If the former employee has found a job, then the payment must be provided in proportion to the time of unemployment.

The legal developments allow the employer to speed up the deregistration of a legal entity. For these purposes, the maximum amount of severance pay (one-time compensation) can be paid immediately. The information should be provided to the registration authorities.

Similar changes have affected the regions of the Far North and similar areas. Those employees are entitled to compensation up to 6 average monthly earnings.

Source: Federal Law of 13.07.2020 No. 210-FZ, Federal Law of 13.07.2020 No. 203-FZ

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