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Cancellation of Work Permits for Temporary Residents in the Russian Federation

Draft bill # 142041-6 passed in the first reading by the Russian State Duma on November 23, 2012.

The draft exempts foreigners holding temporary residence in Russia from the obligation to obtain a work permit. This requirement is unnecessary for them as they do not qualify as foreign workers (which are defined as foreigners temporary staying in the Russian Federation).

Moreover, the draft allows employers to electronically submit documents to the Federal Migration Service related to the employment and dismissal of highly qualified foreign specialist (via Internet, including Unified Portal of Public Services).

Limitation of Paid Dividends

Draft law #173993-6 introduced to the State Duma on November 19, 2012, by the Council of People’s Deputies of the Kemerovo region.

The bill's authors suggest limiting the total amount of dividends paid to the shareholders of JSC and LLC to the sum of taxable income received during the year preceding the dividend decision. In this case, taxable income equals the profit tax base. As we can see, the authors did not take into consideration companies following special tax regimes.

The purpose of these measures is to lower companies’ incentives for tax optimization by concealing their taxable base.

Weekly Wage Payments

Draft law #176296-6 introduced to the State Duma on November 22, 2012, by the deputies of the Liberal Democratic Party of Russia.

Currently employers must pay employees’ wages not less than every half-month. The bill, pursuing the interests of workers, would obligate employers to pay wages weekly.

If legislators approve the amendment, less frequent payments will not be allowed even based on agreement with the employee as it will place the employee at a disadvantage in comparison to what is guaranteed to them by the labor legislation.

Tightening responsibility for Employers of Illegal Immigrants

Draft law # 180514-6 introduced to the State Duma on November 29, 2012 by the Legislative Assembly of Saint-Petersburg.

Current penalty rates prescribed for companies and their managers employing foreigners in violation of migration legislation are often incomparable to the economic benefits received from their labor. Therefore, the bill suggests increasing penalties for migration violations (employment of foreign workers without work permits, failure to process documents for migration registration, etc.) Among the suggested amendments are not only fines, but also: for companies - suspension of activity for up to 90 days, and, for executive, disqualification from employment for 1 to 3 years, depending on the type of the violation.

Moreover, the draft increases penalties for the migrants as well.

Increasing Employer Responsibility Towards Employees

Draft law #179899-6 introduced to the State Duma on November 28, 2012, by the deputes of Just Russia party.

According to statistics of labor violations, employers often neglect their responsibility for timely payment of employees’ wages and for providing safe working conditions. Authors of the bill believe the situation may be improved by:

• Increasing the rate of penalty interest paid by the employer to the employee for delay in payment of wages up to 1% of the refinance rate on amount of unpaid wages for every day of delay;
• Introducing minimum (50,000 rubles) and maximum (5,000,000 rubles) compensations for moral damages suffered. Currently, based on prevailing judicial practice courts award employees with nominal amounts.

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