Russia’s days-off – what does it mean for your business?

Actions you should take before the holiday week

  • Pay salary for March
  • Prepare closing documents for the month
  • Take care already of regular payments, especially if your activities depend on them (cellular services, expenses from business trips)
  • Submit maximum declarations and reporting forms electronically or on paper.

Despite the fact that the government is likely to announce the official postponing of reporting deadlines in accordance with Art. 193 of the Civil Code of the Russian Federation and Section 7, Article 6.1 of the Tax Code of the Russian Federation, we recommend clarifying rather than contesting penalties for failure to submit a report if they are exposed due to a system error.

What will be next week?

The announcement of the national week off in Russia by the president led to some confusion in the public and businesses. It is unclear which businesses are affected and to whom applies the exemptions.
“Naturally, all life support structures, including medical institutions, pharmacies, shops, institutions providing banking, financial calculations, transportation, as well as authorities at all levels will continue to work.” president Putin said.
If this also applies to front desk or online banking services of banks was not clarified. After contacting various banks in Moscow and St. Petersburg, the feedback received is that there is generally no official instruction from the Central Bank regarding what may change the usual processes.

The information received today is:

Moscow

Bank: Status:
Raiffeisenbank Standard working schedule
UniCredit Bank Standard working schedule
Sberbank Standard working schedule
Commerzbank Standard working schedule
Deutsche Bank Standard working schedule
Rosbank Standard working schedule
HSBC Standard working schedule
VTB Standard working schedule

 

St. Petersburg

Bank: Status:
Raiffeisenbank Standard working schedule
UniCredit Bank Standard working schedule
J.P. Morgan Decision outstanding

How is the situation from legal perspective?

The payable non-working days are not established directly by the Russian Labor Code. However, in accordance with the today’s recommendations of the Russian Ministry of Labor and Social Protection (as of March 27, 2020) please see our adjusted statement on this.

  • What does it mean for employers:
  • It applies to all businesses or organizations, unless they:
    • Operate continuously, i.e. their stop on days-off is impossible due to organizational and/or technical reasons (in practice: electric stations, telecommunication companies, public transport, etc.);
    • Are medical and pharmacy organizations;
    • Supply people with food and essential goods;
    • Perform urgent work in emergency situations, ensuring life and normal conditions of the population; or
    • Provide emergency repair and loading-unloading operations.
  • These days in March and April 2020 should not lead to reduction of salary (as we read it, the accrual and payment of salary for these non-working days proceed on regular basis);
  • They shall not be subtracted from principal annual and/or additional paid vacations; they are neither included into the vacation days, nor subject to prolongation of the vacation, which fall on the non-working week.
  • All issues connected with completion of a shift work due to the President’s Decree should be resolved under mutual agreement.
  • The managers, who are responsible for the company’s facilities, should ensure compliance with effective legal requirements within the non-working period (e.g., anti-terrorist security; production and transport safety, etc.).
  • We still believe that demanding of employees to work during these days without proper formalization is prohibited and might trigger negative reaction of employees, potential court claims and/or complaints to the state labor inspectorate.
    The latter may trigger unscheduled audits of the company with imposing of potential administrative penalties on the company and its officers.
  • There is no prohibition to conduct work on these days voluntarily and on a remote regime (out of offices), without direct formal orders or instructions from management. Many companies informally encourage their employees to continue business on a free will with regular pay and conditions of employment. If employees indeed work voluntarily and remotely, it shall not be treated as a violation of law.
  • The press secretary of the Russian President has announced a clarification regarding the non-working days in the next week:

“Subject of discussion are not holidays or days of vacation in the classical sense of the word. The non-working days have been introduced in order to maximally reduce contacts, contacts between people. Those, who are up to now working at distance should continue to work in the next week as they have done up to now.”

Based on the above we recommend to follow the above which means that working at distance can be continued.

  • Since non-working days are not treated as weekends or public holidays, thus, payment of salary should be made on a regular basis (without additional pay).
  • However, we still believe that, if you demand that employees, who are not on a remote work regime, should work next week, in practice it requires to formalize it properly as foreseen by the Russian Labor Code:
    • Issue respective HR order;
    • Obtain the motivated opinion of the representative primary trade union (if any) prior to such work;
    • Familiarize affected employees with the HR order in writing;
    • Get their written consent to such work; work on weekends without consent is permitted only in emergency situations (so far the today’s situation is not treated as such for everyone by default);
    • Make sure that disabled persons and women with children under 3 years of age have no medical restrictions for such work; notify them against their signatures on their right for refusal to show up at work;
    • Do not allow work on days-off for pregnant women; the same generally applies to minor employees (under 18 years of age);
    • Pay out for such work at least twice more than regular salary; provide employees with additional unpaid days of rest, if they request so in writing, and pay for worked-out days-off on regular basis (single pay). Specifically, the last point triggers a lot of questions, as e.g. remote workers are being ordinary paid and it will be interesting to monitor, how this statutory conflict will be treated.
  • If it is technically possible, we still recommend that you pay out salary’s portion on Friday (March 27, 2020), if the corporate’s payday for the last half-month falls on the next non-working week.
  • Check whether the dismissal date of any employee falls on the next non-working week. If so, double-check if it is allowed to terminate his/her employment on a weekend. Generally, if the expiry day of the term connected with employment termination falls on a non-working day (e.g., the last day of employment due to staff redundancy or a resignation), the date of employment termination must be moved to next business day (for now, it is April 6, 2020).

Business representatives: Statements on the week off in Russia

Anton Greiler, Vice President Russia, China, CIS, Israel & APAC, Julius Meinl
We are still waiting for precise government regulations. Nevertheless, we have already adopted the state regulations this week and will continue to do so in the coming weekk off. This means that our employees will work from home whenever possible. Unless there is a government regulation, top management will continue to come to the office. Basically, as a group, based on our experience in Europe, we were well prepared for the new scenario in Russia.

Dirk Grossmann, General Manager Sales, Lufthansa Group Russia
The health of the employees of the Lufthansa Group is currently the top priority, which is why we have been working in the “home office mode” since the beginning of last week. Basically, this works quite well and the employees are currently also busy with work. We will implement the regulation for the non-working week according to the rules, changes in salary payments are not planned until the end of the month.

Michael Germershausen, Managing Partner Russia and CIS, Antal
I think most business people were surprised by this decision. For the economy, this means a week of loss oflost revenue and a week of additional costs. It can be assumed that later holidays will be shorter. We are now also switching the remaining employees to home office because it is not clear whether you will still be coming to the office next week or what should happen in a week. The salary must now be paid on Friday. You should now play through what is going on in business and cash flow when I no longer come to the office from Monday. And you should communicate openly. I will contact my employees via YouTube.

Stefan Teuchert, Russia boss, BMW
We are currently checking whether there will be a complete switch to home office in the coming week – also depending on whether our dealers can remain open. But most likely the staff will work in the home office and most can.

Oliver Hammer, Partner Russia & CIS, IGS
Home office, yes, salary yes, work on a voluntary basis. We are a small team. I appreciate loyal employees work at least about 50 percent and then the “deal” is ok.

Irina Kotschergina, Marketing & Communication department, Schaeffler Russia
The Moscow office has been working from home since last week: it was decided not to endanger people and to allow remote work. As for yesterday’s presidential decree, as a Russian company, we must comply with Russian law so that the days from March 30th to April 3rd, 2020 are set as non-working days while maintaining employee salaries.

Contact us

Alex Stolarsky
Partner, Rechtsanwalt, Legal & Compliance, Moscow
+7 / 495 / 956 55 57
Christopher Schagerl
Director
+7 / 495 / 956 55 57
Denis Petrov
Senior Project Manager
+7 / 495 / 956 55 57
Denis Bushnev
Legal Team Leader, Labor and Migration Law
+7 / 495 / 956 55 57

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