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In this page: Legal Forms of Companies | The Active Population in Figures | Working Conditions | The Cost of Labor | Management of Human Resources

 

Legal Forms of Companies

Open Joint Stock Company (AO)
Number of partners: No minimum.
Capital (max/min): 100,000 RUR
Shareholders and liability: Liability is limited to the amount of capital invested.
Closed Joint Stock Company (AOZT)
Number of partners: From 1 to 50 participants maximum.
Capital (max/min): 10,000 RUR
Shareholders and liability: Liability is limited to the amount of capital invested.
Limited Liability Company
Number of partners: From 1 to 50 participants maximum.
Capital (max/min): 10,000 RUR
Shareholders and liability: Liability is limited to the amount of capital invested.
Limited Partnership
Number of partners: No minimum.
Capital (max/min): 10,000 RUR
Shareholders and liability: At least one person has unlimited liability and the others have limited liability.
Full Partnership
Number of partners: No minimum.
Capital (max/min): No minimum capital.
Shareholders and liability: Liability is unlimited.
Enterprises Federation
Russian union of industrialists and businessmen
Search a Company or a Financial Report
Rustocks
 

Business Setup Procedures

Setting Up a Company Russia Eastern Europe & Central Asia
Procedures (number) 8.00 6.00
Time (days) 18.00 14.00

Source: Doing Business.

 
For Further Information
Consult Doing Business Website , to know about procedures to start a Business in Russia.
Registration Chamber
The Competent Organization
The local tax office .
 

Recovery Procedures

Principle
Russian law provides for 4 types of procedure in case of insolvency: observation, rehabilitation under the authority of a receiver, appointment of an outside manager then compulsory liquidation. At each step, an amicable agreement may be reached.
Cases are judged by arbitration tribunals. After the verdict, the creditor must wait a month before being able to recover his debts. At the end, he can demand the execution of the sentence and appeal to a bailiff. If the bailiff cannot manage to get all the debt together within 30 days, the creditor can ask the Arbitration Tribunal to start an insolvency procedure.
Many informal methods are also used (negotiations, visits, appeals to private companies or corporative associations), but they often have no result..
Minimum Debt-to-Capital Ratio Triggering Liquidation
None
Bankruptcy Laws
Consult the analysis of the law On insolvency (bankruptcy) of 26 October 2002 by Standard&Poor's.
Reorganization and Rehabilitation Laws
The law "On insolvency (bankruptcy)" also covers these procedures.

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The Active Population in Figures

2011 2012
Labor force 75,330,000 75,600,000

Source: CIA - The world factbook

 
2009 2010 2011
Total activity rate - 62.80 % 63.00 %
Men activity rate 69.20 % 70.70 % 71.00 %
Women activity rate 57.50 % 56.10 % 56.30 %

Source: UN - United Nations

 
Employed Persons, by Occupation (% of Total Labor Force) 2008
Manufacturing 16.4 %
Transport and Storage 9.2 %
Education 9.1 %
Agriculture, Hunting and Forestry 8.4 %
Construction 7.6 %
Health and Social Work 7.4 %
Real Estate, Renting and Business Activities 6.3 %
Electricity, Gas and Water Supply 3.0 %
Hotels and Restaurants 2.1 %
Mining and Quarrying 1.9 %

Source: International Labor Organization (ILO)

 

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Working Conditions

Opening Hours
 
  • Legal Weekly Duration
40 hours
  • Maximum Duration
54 hours a week (not more than 4 hours overtime over 2 consecutive days).
Overtime may not be more than 120 hours a year.
  • Night Hours
From 10pm to 6am.
For night work, the legal duration of working time is reduced by 1 hour.
Working Rest Day
Work is usually not allowed over week-ends or on public holidays.
In a certain number of cases, it is nevertheless permitted with the written agreement of the employee.
Paid Annual Vacation
28 days per year
Retirement Age
.Retirement is possible from age 55 for women and age 60 for men (after 5 years' contributions in the private sector and 15 in the public sector).
Child Labor and Minimum Age For Employment
Employing people under 15 is prohibited.
People under 18 can only be employed for a limited list of jobs. In addition, it is forbidden to make them work at night, at the week-end or make them do overtime.
Informal Labor Market
Between 10 and 15% of the working population. This rate is tending to drop due to economic growth and the reduction in taxes.
A large number have formal employment but carry out some form of trade.

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The Cost of Labor

Pay

Minimum Wage
At the federal level, 2,000 RUR per week. The regions can also set their minimum wage.
Average Wage
Average monthly gross earnings in Russia is RUB 16,447 (USD 528).
Other Forms of Pay
  • Pay For Overtime
+50% for the first 2 hours, then +100%
  • Pay For Rest Days Worked
+100%
  • Pay For Night Hours
No legal provision.
  • Pay For Overtime at Night
As for overtime.
 

Social Security Costs

The Areas Covered
Retirement, health insurance and disability benefit, family allowances.
Contributions
Contributions Paid By the Employer: The aggregate rate is 34% and it is payable as follows: 26% to the State Pension Fund, 2.9% to Social Security Fund, 2.1% to Federal Medical Insurance Fund and 3% to the Territorial Medical Insurance Fund.
Some sectors benefit of reductions in their social security rates: 27.1 in 2013-2014 in agricultural sector, 14% in 2011-2017 in software and high technologies sector and 14% for special innovation projects.
Contributions Paid By the Employee: No contributions.
Competent Organization
Federal Tax Service
Social Security Fund

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Management of Human Resources

 

Recruitment

Method of Recruitment
The most common method of recruitment is still by word of mouth.
There are many Internet sites for advertisements, and this is an efficient way of recruiting.
Moreover, more and more companies are resorting to recruitment agencies. An interview takes place before hiring.
Recruitment Agencies
Regional or national head-hunters who generally contact candidates directly.
The market is in full expansion.There are more than a hundred agencies in Moscow, most of them Russian, but the large international agencies are also present such as Adecco , Alexander Hughes , Arthur Hunt , Brainpower and Amrop Hever. Click here to see a list of recruitment agencies.
Recruitment Websites
Tip Top Job International
The Moscow Times Career Center
Expat.ru
 

The Contract

Type of Contract
A work contract is governed by legal provisions and to a lesser extent by collective agreements and individual negotiation.
Contracts can be permanent or fixed-term. The use of a fixed-term contract must be justified.

Breach of Contracts

  • Retirement
It can take several forms: "normal" retirement, for personal reasons, an agreement with the employer, voluntary early retirement, etc.
  • Dismissals
Only allowed in a limited number of cases: liquidation of the company, down-sizing, serious professional misconduct, inadequacy for the work required.
  • Other Possible Methods
Mutual agreement, at the employee's initiative, the employee's refusal to continue to work when working conditions have changed.
Labor Laws
Synthesis of labor legislation in Russia
Different laws
 

Dispute Settlement

 

Conciliation Process

Cases of Dispute
Most disputes are the result of challenging a dismissal or disciplinary measure, but collective disputes are on the rise.
  • Legal Framework
Procedures are different according to whether the case concerns one person or if it is collective. If the case only concerns one person, a distinction is made between disputes over the application of existing working conditions and those concerning new working conditions. Within the framework of collective disputes, arbitration is obligatory.
The 2 parties first set up an arbitration committee with equal representation whose decisions are binding.
If arbitration fails, the parties can appoint a mediator, who may be recommended by the Service for the Settling of Collective Labor Disputes.
In case of failure, the decision will fall to an ad hoc arbitration committee created by the parties and the above-mentioned service. The composition, procedures and powers of this committee are set by common agreement.
  • Procedure
Labor Code of the Russian Federation
 

Judicial Structures

  • Legal Framework
Labor Code of the Russian Federation
  • Competent Legal Body
Individual disputes are usually dealt with by the Dispute Settlement Committee, an equal representation body inside the company.The worker can appeal the decision of this Committee or in some instances take the case directly to a civil tribunal.
 

Social Partners

Social Dialogue and Involvement of Social Partners
The scope of the unions is seriously limited by government policy and the position of strength of the Federation of Russian independent unions (FSIR), which is close to the government and prevents other unions from developing freely.
In addition, the new law on NGOs also applies to unions and limits their activity considerably.
Unionization Rate
46% according to the FSIR (of which 95% are members of this). The trend is towards a drop.
Unions
Federation of Russian independent unions
Regulation Bodies
Federal migrations Service (in Russian)
Ministry of Health and Social Development, Employment and Social Relations Service
 
 

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Last Updates: May 2013

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