New requirements set for labor agreements, medical insurance for foreign workers

IMPACT – HIGH

What is the change? Amendments to the Russian Labor Code that change employers’ duties toward foreign employees took effect Dec. 12.

What does the change mean? Employers must sign labor agreements of an unlimited, not fixed, term with foreign employees and must provide medical insurance that includes treatment and prevention as well as urgent medical care.

• Implementation timeframe: Dec. 12.
• Visas/permits affected: Work permits, work patents, and temporary or permanent resident permits.
• Who is affected: Companies employing foreign nationals.
• Impact on processing times: The changes should not impact processing times.
• Business impact: The amendments bring clarity and predictability to the obligations and rights of employers with expatriate employees.
• Next steps: Companies should work with their BAL attorney to make sure that their labor agreements with foreign nationals contain the required language and that their medical insurance is updated to include the required services.

Background: The amendments, passed Dec. 1 in Federal Law No. 409-FL, make it clear that the labor agreements between employers and foreign employees must be for an unlimited term rather than a fixed term. Among the exceptions are branch offices of a foreign company, general directors and chief accountants. The labor agreement must contain provisions specifying the type of work permit and medical insurance covering the employee for disease prevention and treatment and emergency medical care.

For their part, employers will have more flexibility with foreign employees in certain circumstances. If an employee is changing jobs within the company, the employer may transfer the employee for up to a month before amending the work permit. If an employee’s work permit expires, an employer may suspend, rather than terminate, the employee for up to one month.

BAL Analysis: The legislation provides guidance to employers of foreign nationals and more flexible options when a foreign employee changes jobs within the company or a work permit expires.

This alert has been provided by the BAL Global Practice group and our network provider located in Russia. For additional information, please contact your BAL attorney.

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