Penalties imposed for companies employing foreign nationals without local employment contracts

IMPACT – MEDIUM

What is the change? The Ministry of Interior’s immigration department is more strictly scrutinizing and penalizing companies employing foreign nationals through third-party staffing agencies.

What does the change mean? Companies outsourcing employees through third-party staffing agencies are at risk of violating the rules for employing foreign nationals. While some companies resort to the services of staffing agencies, employment of foreign nationals without a direct (local) employment contract and applicable permission documents is subject to fines and penalties.

• Resolution issue date: Immediate and ongoing.
• Who is affected: All foreign nationals, including Commonwealth of Independent States (CIS) nationals.
• What to watch: Companies that breach rules for employment of foreign nationals, specifically employers hiring foreign nationals without the appropriate permission documents, may be fined up to 1 million Russian rubles and/or face suspension of activities for up to 90 days.

Background: On June 25, the Ministry of Interior’s immigration department for the Northeastern District of Moscow issued a resolution against a company providing food delivery services, penalizing it for a breach of rules for employment of foreign nationals. While some companies in Russia employ foreigners through staffing agencies and, thus, have no permission documents in place for the foreign employees, this can result in fines and penalties.

Analysis & Comments: Companies should avoid employing foreign nationals through third-party staffing agencies and instead hire them directly to avoid penalties. Additionally, companies should note that the authorities may see using the services of staffing agencies as a way to avoid immigration and employment responsibilities and obligations.

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