In the contemporary landscape, tapping into a global talent pool has become a feasible option for businesses considering remote teams. Gone are the constraints of geographical limitations, thanks to technological advancements. Russia, as one of the world's top 10 populous countries, emerges as a promising reservoir of talent for those looking to diversify their workforce.

For those exploring Russia as a potential talent source but navigating unfamiliar terrain regarding hiring processes, local labor laws, and related aspects, we've compiled a set of FAQs covering almost everything you need to know on this subject.

Why Opt for Remote Talent from Russia?

Russia, being the largest country globally by area and a top-10 population contender, is an attractive destination for remote talent due to its sheer volume of skilled professionals. The prevalence of tertiary education, with popular degrees in Education, IT, and Medicine, further enhances the country's appeal. The cost of living and lower wages also position Russia favorably for employers, making it an economically viable option.

Where to Find Remote Talent in Russia?

Focusing on regions with higher economic activity, such as Moscow, St. Petersburg, Novosibirsk, Nizhny Novgorod, and Kazan, proves beneficial. Targeting graduates from esteemed institutions like Lomonosov Moscow State University and utilizing job portals like Head Hunter and Superjob are effective strategies.

Average Salary of a Russian Remote Employee

As of 2021, the minimum monthly wage in Russia varies by location, ranging from RUB 12,792 to RUB 20,589. A breakdown of average salaries for different positions is provided.

Income Tax Computations in Russia

The surge in the Russian freelance market, catalyzed by the COVID-19 pandemic, is discussed, emphasizing the need for compliance with taxation laws. Professional Employer Organizations (PEOs) are recommended to aid in tax adherence.

Working Hours in Russia

Russian employees typically adhere to an 8-hour workday, five days a week, with regulations on overtime and rest breaks detailed.

Required Benefits for Russian Employees

Vacation Leaves

After six months of service, employees in Russia are entitled to 28 calendar days of annual vacation. Additional paid leave may be granted to those working in hazardous conditions, irregular hours, the far North regions, and as stipulated by law.

Sick Leaves

Employees can take sick leave due to illness or injury. During sick leave, regular salary is replaced by a temporary incapacity allowance from the Social Insurance Fund of the Russian Federation, funded by employer insurance payments. The allowance, ranging from 60% to 100% of the employee's average salary over the past two years, does not exceed RUB 2,301 per day. Employers compensate the first three days of each temporary disability period.

Parental/Childcare Leaves

Granted to mothers, fathers, grandparents, and other guardians, only one parent/person can take parental leave. During this time, employees can work part-time or from home, receiving a monthly allowance equivalent to 40% of their average salary over the previous two years, capped at RUB 27,984.66 in 2020, until the child reaches 18 months old.

Maternity Leaves

Female employees are entitled to 140 days of paid maternity leave, with potential extensions for complications during birth (up to 86 days) or multiple births (110 days). Additional benefits during maternity leave include the ability to work part-time upon request, protection against dismissal except under specific circumstances, and exemption from business trips, overtime, night shifts, weekends, and public holidays.During maternity leave, women receive an allowance from the Social Insurance Fund, amounting to 100% of their average salary over the previous two years. The maximum allowance is determined annually (RUB 2,301.37 per day in 2020).

Insurance and Social Security

The Russian Federation mandates obligatory social insurance, with employers contributing based on an employee's monthly salary. The employer's contributions include:

Additional Benefits and Allowances for Russian Remote Employees

While not obligatory by law, it is a common practice to provide non-taxable allowances to remote employees, and such provisions are generally expected by the employees themselves. These allowances may encompass stipends for business and equipment expenses, internet and telecom allowances, and even transportation allowances if the remote employee operates from a co-working space.

Below are some popular employee perks and fringe benefits for Russian employees, as identified by Asinta:

1. Mobile Phones: Approximately 97% of multinational companies furnish mobile phones to all employees for both business and private use.
2. Meal Vouchers: More than 70% of multinational companies offer meal allowances to employees. The typical monthly meal allowance or voucher amount ranges from RUB 5,000 to 6,000 in Moscow and RUB 3,000 to 4,000 in other regions.
3. Supplemental Sick Pay: According to current Labor Law, employers cover days 1-3 of sick leave based on an employee's average salary and seniority. From day 4 onward, payments are made from the Social Security System, utilizing a minimum wage as a baseline. Some companies choose to supplement statutory sickness benefits (at their expense or by extending life insurance policies), ensuring that salary continues at 100%, up to a 14-day maximum. Approximately 50% of companies provide such supplemental sick pay.
4. Gym Memberships: Popular among companies with an average employee age under 30, gym memberships are sometimes preferred over group medical insurance.
5. Bonus Schemes: It is a prevalent practice to reward employees with bonuses at the end of a reporting period, typically annually, although some companies adopt quarterly or semi-annual payment cycles. These bonuses are directed to employees who have achieved relevant Key Performance Indicators (KPIs).
6. Well-being Programs: Some companies offer various activities aimed at promoting a healthy lifestyle among employees.
7. Additional Days of Annual Leave: Employers may grant extra days off to all employees (usually not exceeding 10 days on average) or extend this benefit specifically to those who have achieved significant success in a reporting period.
8. Additional Pay During Maternity Leaves: This support can take various forms, including cash incentives, salary top-ups, or material aid, providing extra assistance to employees during maternity leaves.

Regulations on Working During Holidays in Russia

Russia observes 14 public holidays, and if employees work during these times, employers are required to pay 200% of their regular daily pay rate.

Hiring a Remote Employee in Russia

PEOs are recommended for businesses registered in other countries, simplifying the hiring process and ensuring compliance with local laws.

Probation Periods and Hiring Top Executives in Russia

While not mandatory, a standard three-month probation period exists for regular employees, potentially extending to six months for top executives.

Payment Cycles for Russian Remote Employees

Russia follows a bi-monthly payment cycle, and adherence to this schedule is crucial to avoid disruptions.

Payment in Foreign Currencies for Russian Employees

Russian law requires payment in Russian Rubles, and using PEO platforms is advised for seamless transactions.

Termination Process for Russian Remote Employees

Terminating an employment contract in Russia follows a precise set of criteria, including:

1. Termination Grounds:Mutual agreementEmployee's or employer's initiativeExpiry of the contractOther specific grounds
2. Termination on Employer's Initiative: Employment can be terminated by the employer for specific reasons, such as:The employer's liquidationRedundancyRepeated failures by the employee to fulfill duties, following a reprimandGross misconductUnauthorized disclosure of confidential informationOther rarely used grounds
3. Notice Period: Dismissal typically requires prior notice to the employee. The notice period duration depends on the grounds for termination, ranging from 0 (termination for cause) to 2 months (in the case of employer organization liquidation).
4. Employee's Right to Terminate: Employees can terminate their own employment by providing the employer with a two-week prior written notice (one month for directors). These notice periods cannot be extended through individual employment contracts.
5. Severance Pay: Severance payment rates vary based on termination reasons and generally equal an average month's wage. Two weeks' average earnings are provided for reasons such as failure to meet job standards due to health reasons, military service, reinstatement, or refusal to relocate. One month's average earnings are paid in cases of redundancy or liquidation. In mutual agreement terminations, the severance amount is usually specified in the termination agreement.

To calculate severance pay, the following data is applicable:

1. Reason(s) for Termination: Company liquidation

Severance Pay: 1 month's salary plus the average monthly salary during the period the employee seeks new employment (not exceeding two months from the termination date).

2. Reason(s) for Termination:Failure to meet job standards due to health reasonsMilitary service or alternative civilian serviceReinstatementRefusal to relocate when the employer movesTermination due to redundancy or liquidationMutual agreement termination

Severance Pay: 2 weeks' average earnings

This comprehensive guide aims to equip employers with the necessary knowledge to navigate the intricacies of hiring and managing remote talent in Russia.