On March 25, 2020, President Putin signed the Order “On Declaring Non-Working Days in the Russian Federation” (the Order), which states that March 30th through April 3rd, 2020 will be paid “non-working days” for employees.1 The Order was further clarified the following day by recommendations from the Russian Ministry of Labor (the Recommendations).2 Below is an overview of key provisions of the Order and our analysis.
Who Does the Order Apply To?
The Order applies to employees of all entities operating in Russia, with the exception of those specifically mentioned in the Order. The Order also includes specific provisions with respect to employees of federal, regional and local authorities as well as mass media organizations.
Which employees are not covered by the Order?
Employees of the following organizations are not covered by the Order:
- Organizations with continuous operations
- Healthcare and pharmaceutical organizations,
- Organizations which provide food and essential goods
- Emergency service operators
- Organizations performing urgent repair
- Freight and public transport operators
The Order apparently also does not apply to individuals performing services based on civil law agreements.
How are these organizations defined?
According to the Russian Labor Code "organizations with continuous operations" may be interpreted as companies whose operations cannot be interrupted due to technical reasons, however Russian law does not provide a specific list of such organizations. Organizations may be deemed as having “continuous operations” if they normally operate on a continuous shift schedule, i.e. employees work during public holidays and on weekends, etc., and that such provisions are included in the organization’s internal regulations. The Recommendations have extended this to include organizations working in energy production, heat supply, water, nuclear, sewage and certain other sectors, organizations which exploit hazardous objects and which are subject to industrial safety state control, as well as hydrotechnical construction operators, construction companies, as long as any interruption of their activities would result in a threat to public health and safety. Agricultural companies have also been included in this exception.
With regards to "food, essential goods and services" the Recommendations extended this exception to include organizations which provide storage and transport-logistical services in order to provide food or essential goods, and trading companies. However, whether companies fall under the above exceptions must be analyzed on a case-by-case basis."
Emergency services operators" are defined by the Recommendations as those organizations whose activities are related to the prevention of COVID-19, including producers of sanitizers, medical products and pharmaceutical products (including those which produce materials for their production), as well as waste management companies, housing and utility providers, organizations involved in oil production and some financial service organizations
How should employees be paid during these "non-working days"?
Based on the Recommendations, for the purposes of Russian Labor law, "non-working days" do not constitute weekends or non-working public holidays; therefore employees which are covered by the Order should be paid their normal wages during "non-working days".
Is it possible for non-exempt employers to operate during “non-working days”?
The Russian Labor Code does not regulate “non-working days”. Instead, it contains rules related to working on weekends and non-working public holidays. Neither the Order, nor the Recommendations, specifically prohibit employers from engaging employees during these "non-working days." with their consent, instead applying rules related to working on weekends and non-working public holidays by analogy. However, there are still certain risks, due to the unclear wording of the Order, if an employer who does not clearly fall under the above exceptions decides to have employees work during these “non-working days”. To mitigate these risks employers must ensure that:
- All employees sign written consent to work during "non-working days"
- Any such employees are paid at a double rate, as required by the Russian Labor Code on "non-working days" or that employees are paid their normal rate and are provided with additional vacation days upon the employee's consent
Based on a company's internal regulations, certain additional actions may need to be taken.
What is the potential liability for engagement of employees during these "non working days"?
Failure to comply with employment laws and regulations may result in the imposition of administrative liabilities, in the form of a fine on a company and its officers.
Moreover, given the current situation and the purpose of the Order, authorities may try to interpret it broadly as establishing sanitary and epidemic prevention measures. Failure to comply with such measures may result in additional administrative liability, in the form of a fine to the company and its officers, as well as the additional suspension of the company's activities if violated.
Russian law also means that criminal liability may additionally be imposed on a company's officers for a violation of sanitary rules which have resulted in mass infection through negligence, and or the death of an individual or individuals.
To mitigate the risks of either administrative or criminal liability companies should allow employees to work remotely where possible, develop internal regulations and measures related to maintaining operations during the Coronavirus COVID-19 period and otherwise comply with government-mandated measures.
As part of the Government's response to COVID-19, a draft law amending the Russian Criminal Code has recently been submitted to the State Duma in order to increase criminal liability for the violation of sanitary epidemic prevention rules. In addition, the Russian Government is considering similar amendments to the Code of Administrative Offenses.
Are there any further exemptions to the Order?
The Order is specifically aimed at ensuring the health and safety of the population, which means that the Order presumably should be interpreted narrowly and not apply to those companies which have already introduced protective measures, although this is not specified in the Order. It may, for example, exempt companies where employees are working remotely, although this is not explicitly stated in either the Order or the Recommendations.
Notwithstanding the clarifications provided by the Recommendations, the Order still raises numerous questions with respect to its implementation.
In addition to the “non-working days”, President Putin announced additional protective measures for employees and employers, including:
- An increase in sick leave compensation to the full national monthly minimum wage until the end of the year
- An increase in the maximum amount of state benefits for unemployed individuals to the full national monthly minimum wage
- A reduction in social insurance contributions for all small and medium-sized enterprises from 30% to 15% of monthly salaries which exceed the national monthly minimum wage