Remote Work: Russian Labour Regulation
Ekaterina Kabanova
by Ekaterina Kabanova
Ekaterina Kabanova is Head of the corporate department and has over 10 years’ experience in providing legal advice in company restructuring and employment matters. Contact Ekaterina.
In 2022, despite the cancellation of COVID-related restrictive measures in Russia, employees’ desire to work remotely only heightened. Many employees enjoy the benefits of “remote mode”, while employers have noticed the increased efficiency of employees when working remotely. In 2022 the number of remote workers in Russia doubled.
Labor legislation
In view of the pandemic, the Russian Labor Code was substantially amended, in particular, the possibility to conclude a supplementary agreement on remote work to the existing employment contract was provided for. Remote work was divided into types: permanent (for the entire duration of the employment contract) and temporary. Temporary remote work can be continuous or periodic; temporary remote employee may be required to appear at the workplace.
The possibility of transferring employees to remote work without their consent was also established: this may be carried out in cases of emergency or by decision of the authorities.
The new approach to the issue of additional grounds for dismissal of employees working remotely at the employer's initiative was implemented: earlier, the parties could, at their own discretion, determine the grounds for dismissal in the employment contract, and the employee, as the weaker party, could be defenseless against unmotivated dismissal. Currently the parties to a remote employment contract may not specify additional grounds for dismissal apart from those provided for under law, e.g., the contract can be terminated if the employee does not communicate with the employer for more than two consecutive days without a valid reason, although the company documents may specify a longer period. Moreover, employees can be terminated if they have moved and, as a consequence, are unable to perform their job duties under the previous conditions.
Tax issue
Personal income tax for Russian tax residents is 13 percent (part of the tax base exceeding RUB 5M per annum is taxed at 15 percent). This is one of the lowest rates in Europe, which has always attracted workers to Russia. A person is recognised as a tax resident of Russia if they have actually stayed in Russia for at least 183 consecutive calendar days within a year. If an employee becomes a tax nonresident, the personal income tax rate increases to 30 percent.
Possible ban on remote work
Publications on a possible draft law prohibiting certain types of employees from working remotely appeared in the media in late December 2022, but so far, no specific proposals have been submitted to the State Duma. Nevertheless, such restrictions were said to be aimed at employees working in transport, financial and banking organisations.
We believe that both legislation and court practice in regard to remote work in Russia is still to undergo substantial development.
KBK Accounting is a reputable outsourcing firm and provider of a wide range of services, including tax accounting and bookkeeping, tax advisory, reporting and compliance, HR, and interim management.
GGI member firmKBK AccountingMoscow, RussiaT: +7 495 662 33 30
Auditing & Accounting, Tax
