Employer of Record Russia: Why You Need It & How to Use It

Russia is known for its highly skilled workforce, particularly in fields like engineering, technology, and mathematics. Professionals from Russia are often sought after for their strong educational backgrounds and technical expertise. 

However, hiring Russian EOR specialists can come with challenges. As an employer, you may encounter difficulties with the complicated hiring regulations specific to the country, including visa processes, legal procedures, and language barriers. Dealing with these challenges can be time-consuming and require significant resources. Instead of going through these challenges, you can work with an employer of record (EOR) in Russia to streamline the hiring process. 

An employer of record in Russia is a third-party service provider that takes on the responsibilities of an employer for foreign workers in the country. The EOR in Russia handles tasks such as payroll management, tax compliance, and employment contracts on behalf of the client company. By partnering with an EOR in Russia, your company can leverage its expertise in local employment regulations and seamlessly onboard professionals from Russia without the hassle of managing administrative tasks.

How to Hire an Employer of Record Russia: 5 Simple Steps 

Hiring an employer of record in Russia can ease your international hiring process and guarantee compliance with local labour laws. Here are five simple steps to guide you through the process:

1. Shortlist EOR Russia providers

Begin by researching EOR Russia providers with a strong reputation and experience in your industry. The ideal provider will offer a range of services, such as payroll processing, benefits administration, compliance support, and smooth onboarding. 

You’ll also want to focus on their attention to data security and intellectual property protection. Compare their pricing plans to find a provider that suits your budget and requirements, ensuring transparency to avoid unexpected costs.

2. Meet with Potential Employer of Record Russia Providers 

Set up meetings with potential EOR Russia providers to discuss your specific needs and the services they offer. You can use this opportunity to ask questions about their experience and how they manage employee relationships. Key questions to consider include:

• Do they have an entity in Russia?
• What onboarding services do they provide?
• How do they handle compliance with Russian labour laws?
• How strict are their data security measures?
• Can they provide accurate employer burden calculations?

These discussions will help you assess the provider’s compatibility with your business and ensure they can meet your specific requirements.

3. Check for Global Coverage

An EOR provider with global coverage can offer numerous benefits, especially if you plan to expand beyond Russia. A provider with international experience can guide you through the varying labour laws across different regions. Working with one EOR provider for all your international employees can simplify your operations and streamline communication.

4. Read Reviews and Contracts Carefully

Before making a final decision, read online reviews and opinions about the EOR provider. Look beyond their website for unbiased reviews. If possible, speak with current or past clients to gain insights into the provider’s strengths and weaknesses.

Carefully review contracts and agreements with your chosen provider, focusing on service levels, pricing, termination clauses, and additional fees. Make sure you fully understand the terms and seek clarification on any ambiguities to avoid misunderstandings later.

5. Collaborate Closely with Your EOR Provider

After selecting your EOR provider in Russia, establish a close working relationship with them. While they handle most HR-related tasks, you can leverage their expertise and knowledge of the Russian labour market to your advantage. By collaborating, you can come up with competitive compensation packages and facilitate smooth employee transitions.

Work together to make sure your international team feels comfortable and valued within your company. Open communication between you, your EOR provider, and your employees is essential for a successful partnership. This collaboration helps create a positive experience for your international team and maximizes the benefits of working with an EOR provider.

What are the Benefits of Using Employer of Record Russia Services?

Employer of record services in Russia offer valuable support for foreign businesses looking to expand their operations into the Russian market. From navigating complex employment regulations to managing payroll and compliance, EOR Russia services provide a comprehensive solution for companies seeking to establish a presence in Russia. Let's explore the key benefits of using an employer of record Russia services:

Compliance with Russian Labour Laws

One of the primary benefits of using an employer of record in Russia is ensuring compliance with the country's intricate labour laws and regulations. Russia has strict employment laws that can be challenging for foreign companies to navigate independently. By partnering with an EOR in Russia, businesses can avoid the risk of non-compliance and ensure that their operations adhere to local legal requirements. This reduces the risk of fines, penalties, and legal disputes, providing peace of mind for companies operating in Russia.

Streamlined Payroll Processing

Managing payroll in Russia can be complex, with various tax rates, deductions, and reporting requirements to consider. Employer of record Russia services streamline the payroll process by handling tasks such as calculating wages, processing payments, and filing payroll taxes on behalf of the client company. This ensures that employees are paid accurately and on time while relieving the administrative burden on the company's internal resources.

Access to Local Expertise

Partnering with an employer of record in Russia provides access to a team of local experts with knowledge of the Russian market and business practices. These professionals can offer valuable insights and guidance on matters like hiring practices, employee benefits, and cultural nuances. By leveraging their expertise, companies can make informed decisions and operate more effectively in Russia.

Flexibility and Scalability

Employer of record Russia services offer flexibility and scalability, allowing companies to expand their workforce in the country quickly and efficiently. Be it hiring a single employee or establishing a large team, EOR services can adapt to meet the changing needs of the business. This flexibility is especially beneficial for companies entering new markets or experiencing rapid growth. It allows them to scale their operations without the hassle of setting up a legal entity in Russia.

Risk Mitigation

Operating in a foreign country comes with inherent risks, from legal and regulatory compliance to cultural and political factors. Employer of record Russia services help mitigate these risks by providing a buffer between the client company and the complexities of local employment regulations. By outsourcing employer responsibilities to an EOR in Russia, companies can minimize exposure to risk and focus on their core business activities with confidence.

Cost-Effectiveness

Using employer-of-record services can be a cost-effective solution for companies expanding into the Russian market. Instead of investing resources in establishing a legal entity and hiring local staff, companies can hire the services of an EOR in Russia to handle employment-related tasks on their behalf. This can result in significant cost savings and a faster return on investment for companies looking to enter the Russian market.

Employer of record Russia services offer a range of benefits for foreign businesses seeking to establish a presence in the Russian market. From ensuring compliance with local labour laws to providing access to local expertise and streamlining payroll processing, EOR services provide a comprehensive solution for companies looking to expand into Russia. 

By partnering with an EOR in Russia, businesses can mitigate risks, increase flexibility, and achieve cost savings, making them an invaluable resource for companies operating in foreign markets.

Hiring in Russia

In this section, we'll look into the essential elements of employment contracts, labour laws, and regulations that companies need to be aware of when establishing a workforce in Russia.

Understanding Russian Labour Law and Employment Regulations

Russian employment law is governed by the Russian Labour Law, established in February 2002. This legislation outlines the rights and responsibilities of both employees and employers operating in Russia. It applies to all types of businesses—whether domestic or international—and covers all employees, irrespective of citizenship.

Types of Workers Recognized by Russian Labour Law

The Russian Labour Law recognizes various categories of workers in compliance with international employment regulations. These include:

• Employees directly employed by a corporation
• Independent contractors
• Employees working for an agency
• Essentials of an Employment Contract in Russia

When hiring in Russia, it's crucial to understand the minimum requirements for employment contracts. Here are some key points to consider:

• Written employment contracts: Employers in Russia are required to engage in written employment contracts. An implicit employment contract exists if an employee is admitted to work without a written contract (de facto employment).
• Probation period: If an employee is hired without an employment letter, there is no requirement for a probation period. However, a job contract typically includes a job description outlining essential responsibilities.
• Terms to include: The employment contract should include essential details such as the employee's place of work, contract duration, position title, workplace conditions, compensation, working hours, termination terms, and other relevant employment conditions.

Social Insurance and Other Provisions

Employment contracts in Russia may include provisions related to social insurance, probation periods, non-disclosure of confidential information, and other requirements. However, these provisions must not worsen the employee's situation compared to those granted by law or corporate policy. If a contract contains terms inferior to those promised by law or corporate policies, it may be voided.

Key Regulations for Employing Staff in Russia

From minimum working conditions to termination of employment contracts, understanding these regulations is essential for businesses operating in the country.

Minimum Working Conditions

Employees in Russia are entitled to safe working conditions as established under Articles 21-22 of the Labour Code. They are required to follow all labour safety regulations and promptly report any danger to the employer. Employers, on the other hand, must have a workplace safety service or specialist with the necessary qualifications, and each workplace must undergo evaluation and classification based on hazard levels.

Salary Regulations

The determination of the minimum wage in Russia is governed by federal laws, which also ensure that employees receive equal pay for work of equivalent value. The Labour Code outlines circumstances for salary enhancements, including night work, work on days off, public holidays, and compensation for hazardous conditions. Salaries must be paid twice a month in Russian Rubles, with payment in foreign currencies discouraged.

Working Hours

In Russia, regular working hours should not exceed 40 hours per week, with variations for different demographics and age groups. Specific limits apply to individuals below 16, between 16 and 18, disabled individuals, medical professionals, and pedagogical workers. Compliance with these regulations ensures fair and reasonable working hours for employees across various sectors.

Overtime Regulations

Overtime work in Russia requires the written approval of the employee and is typically defined as any time worked beyond regular stipulated hours. Certain groups, such as pregnant women, employees under 18, and disabled persons, have restrictions on overtime work to protect their well-being. Also, overtime cannot exceed 4 hours per day or 120 hours per year.

Health and Safety Measures

Employers in Russia are obligated to provide safe and healthy working conditions for their employees, including necessary amenities and safety gear. Measures must be taken to ensure employee safety and the provision of required equipment, especially in potentially hazardous workplaces.

Termination of Employment Contracts

In Russia, open-ended employment contracts must be terminated for valid reasons, such as misconduct or economic grounds like mass layoffs. Dismissal may occur for reasons like forgery, theft, accidents, or prolonged absence not linked to work-related illness, among others. Understanding and adhering to these regulations is crucial for businesses to maintain legal compliance and foster positive employee relations in Russia.

Payroll Taxes in Russia

In Russia, the payroll cycle occurs bi-monthly, with employers facing various taxation requirements. Here's a breakdown of the key tax rates for employers:

• State Pension Fund: 22.0% up to wages of RUB 1,465,000 per year (maximum rate), 10% for any amount over it.
• Social Insurance Fund: 2.9% up to wages of RUB 966,000 per year (maximum rate).
• Medical Insurance Fund: 5.10%.
• Accident Insurance: Minimum rate of 0.02%, dependent on the degree of professional risk involved.
• VAT: 20%.

To guarantee compliance and avoid penalties, businesses operating in Russia must understand and comply with these payroll tax rates.

Consequences of Missteps 

Businesses that fail to comply with Russian labour laws may face severe consequences. Violations can lead to costly legal battles, with employers facing the risk of hefty fines and compensation payments. 

Non-compliance can also result in negative publicity, tarnishing the company's reputation and potentially causing a loss of revenue and talent. Moreover, suppliers and stakeholders may become hesitant to engage with the company, further hindering its operations and growth.

Partnering with an employer of record in Russia can help avoid these risks and guarantee compliance with local regulations. By entrusting employment responsibilities to an experienced EOR, businesses can avoid the penalties associated with non-compliance, safeguard their reputation, and confidently focus on their core operations.

Choose EOR Worldwide for Russia EOR Services

EOR Worldwide is your top partner for EOR services in Russia. With our extensive experience and deep understanding of global employment regulations, we provide comprehensive solutions tailored to meet your specific needs. Be it complex labour laws or accurate payroll processing and tax compliance, we handle every aspect of employing staff in Russia with efficiency and professionalism.

Our dedicated team is committed to delivering exceptional service and ensuring the success of your business operations in Russia. Trust us to be your EOR partner and experience the difference.