New law changes salary rules for foreign highly qualified specialists

IMPACT – MEDIUM

What is the change? Under a new law that just passed the State Duma, foreign highly qualified specialists must be paid minimum salaries that conform to a monthly schedule, rather than a yearly cumulative total.

What does the change mean? Employers will be required to pay a minimum salary every month. While this does not change the overall annual minimum salaries for highly qualified specialists, it does require that the minimums be observed on a monthly basis.

• Implementation timeframe: The law takes effect March 18.
• Visas/permits affected: Work permits for highly qualified specialists.
• Who is affected: Companies hiring HQS workers.
• Business impact: The new rule should not affect employers who are already paying foreign HQS workers in regular equal installments according to the annual minimums; companies that are backloading the payment schedule will have to adjust their salary disbursements.
• Next steps: Companiesshould review salaries and make sure they are paying foreign HQS workers according to the new monthly minimums.

Background: The law targets employers who avoided the minimum salary requirements, which were set as an annual minimum, by paying HQS workers minimum wage and terminating them before a full year of work.

Accordingly, employers who were required to pay certain HQS workers 2 million rubles per year must now pay them a minimum of 167,000 rubles (about US$2,755) per month. The minimum salary of 1 million rubles per year must now be paid monthly at the rate of 83,500 rubles, and the minimum salary of 700,000 rubles per year must now be paid monthly at the rate of 58,500 rubles.

The law also requires payment of the minimum monthly salary even if the foreign HQS employee had unpaid periods due to illness, unpaid leave, or other reasons.

The law, which amends the Legal Status of Foreign Citizens in the Russian Federation, was approved by the Federal Council March 4 and will take effect March 18.

BAL Analysis: Companies must now pay foreign highly qualified specialists according to the monthly minimums if they are not already doing so.

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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