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RUSSIA: New Provisions on Employment of Standard Work Permit Holders

Standard work permits and visa processing are for foreign employees whose salary level is lower than 2,000,000 rubles gross per year. If an employee's salary level reaches the 2,000,000-rubles-gross benchmark, the majority of such employers opt for the HQS work permit and visa scheme, discussed above. Below is a summary of new provisions on employment for standard work permit holders, effective January 1, 2015.

For Visa (Non-CIS) Nationals:

Submission of the following notifications regarding standard work permit holders' employment will not be required:

  • Notification to the Tax Authority reporting hiring or dismissal of the employee

The following notifications are introduced:

  • Notification to the Federal Migration Service office reporting the hiring or dismissal of the employee within three business days from the day of signing or termination of the labor agreement

Penalties for violation are up to 1,000,000 rubles.

The Russian language, history, and basics of legal knowledge test applies to all categories of standard work permit applicants.

For CIS Nationals:

  • Work permits are replaced with work patents
  • Regional authorities have the right to "hire" third-party organizations to process work patent applications
  • Work patents are issued for a maximum term of 12 months
  • Work patent can be extended only one time
  • Work patents allow CIS nationals to work for private persons as well as companies
  • Income tax is paid by the work patent applicants themselves for the whole period of employment (maximum 12 months) before the work patents are issued to them
  • Work patents provide the right to work in a particular Russian region only
  • Work patents do not specify a position, which will allow for transfer without the need to amend the document
  • Application does not require an employer to apply for the initial 12-month work patent, but the employer must sponsor a subsequent extension
  • Work patent holder can work for any employer within the Russian region for which the patent was issued, except for some minor exceptions
  • Russian language, history, and basics of legal knowledge test applies to all categories of work patent applicants
  • Employers have the right to supply their employees only with medical insurance from companies registered in Russia and in some regions only from companies determined by the governor
  • Medical testing as well as fingerprinting also remain requirements

Most of the powers to issue work patents are being transferred to governors of Russian regions, who will have the right to:

  • Stop issuance of work patents any time, basing their decisions on Labor Authorities' proposals
  • Determine whether job positions should be indicated on work patents
  • Ban issuance, if the governor determines that job positions should be indicated on work patents, of patents for certain job positions as well as issue orders to dismiss all the work patent holders employed in such positions who received the patents before the ban in question was introduced
  • Determine the medical centers that can assist work patent applicants with medical examinations
  • Determine the schools and universities that can test work patent applicants on Russian language, history, and legal basics knowledge
  • Determine the insurance companies that can issue medical insurance to work patent applicants
Background. As noted above, effective January 1, 2015, Russia will no longer have the standard work permit process for CIS nationals. Instead the work patent system is being introduced. According to the new legislation, CIS nationals willing to work in Russia must declare on the migration card (special document issued by border control) that the purpose of their visit is work. Then the CIS national will have 30 calendar days to apply for the work patent. Violation of this deadline will cause the applicant to be fined up to 15,000 rubles. After paying the fine, he or she will still have the right to file the application. Once the work patent is issued, the CIS national must find employment within two months from the day of receiving the work patent and must send a copy of the labor agreement to the Federal Migration Service office that issued the patent. Should the applicant violate this deadline, his or her work patent will be cancelled by the Federal Migration Service and he or she will have the right to re-apply in a year.

Upon receipt of the work patent, the applicant must pay a fixed income tax amount, determined by the regional government. The fixed income tax amount will be set for one month. By paying this tax amount, the work patent is "extended." If the work patent holder fails to pay, his or her patent will be annulled.

The maximum validity period of the initial work patent is set at 12 months. The initial patent can be extended. But to file for an extension, an application from the employer is required. The initial patent can be extended for an additional 12 months, after which the CIS national is expected to leave the country. It is impossible to extend the work patent for the second time. This does not preclude the foreign worker from filing for another initial work patent.

Employers will not be required to sponsor initial work patent applications. Additionally, in comparison to the existing system, no quota or agreement from the Labor Authorities will be required for employers to engage CIS nationals with work patents.

This can be seen as a significant relaxation of the law, although employers whose foreign workforce primarily consists of CIS nationals may be "trapped" in their regional governor's hands. If under the current system, having survived a time-consuming bureaucratic quota application process and having received the quota places, employers were at least 99 percent sure that they would be able to engage the foreign workforce they needed, starting in 2015 this will no longer be the case. Russia regional governors will be able to stop issuance of work patents at any time, basing their decision on Labor Office opinions as well as by order that all work patent holders who are engaged in a certain type of work must be dismissed by their employers in a given time frame.

Beginning in 2015, standard work permit and work patent applicants must pass Russian language, history, and basics of legal knowledge tests. Work patent applicants will also have to accomplish many additional tasks apart from the test: pass a medical examination, undergo fingerprinting, buy insurance from the designated insurance company, personally appear at the authority or responsible third-party organization to file the application for the patent, and then subsequently appear to receive it.

The overall impact of these amendments is expected to be major. Especially affected will be companies that engage primarily CIS foreign nationals. Because none of these developments will affect the HQS work permit process, it is expected that more and more employers will look in the direction of engaging exclusively HQS work permit holders. This is even more likely in the light of companies' representative offices being granted the right to sponsor HQS work permit holders as well as the introduction of the lowered salary level for HQS work permit applications filed by IT companies.

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