Author Archives: marianavcosta

Ten Tips to Develop a Global Code of Conduct – Part 2

Mariana Villa da Costa – Littler Mendelson

A few weeks ago in the first post of this series, I provided five tips to get you started in the development of a Global Code of Conduct.  In this post, we are back with five more tips to help you finish your Code.

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Ten Tips to Develop a Global Code of Conduct – Part 1

Mariana Villa da Costa – Littler Mendelson

What is a Global Code of Conduct?  Everybody talks about them, and they have become a necessity for global businesses in today’s environment, but truly, drafting one can be a big mystery and a lot of work.  Who should draft them? A lawyer? Human resources personnel? The CEO?  What content should be included? What language?

These questions, and many others, will be answered with my ten tips to develop a Global Code of Conduct.  The first five tips are in this post; the remaining ones will follow soon in a follow-up post. Here we go:

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It’s the World Cup — Do I Have to Work?


Mariana Villa da Costa – Littler Mendelson

On June 11, the world has seen the launch of one of the biggest sporting events – the World Cup, this year being hosted in South Africa.  The World Cup is a passion to millions and millions of people around the world, and a much anticipated month-long series of games that unfortunately, for those who love futbol (soccer)  like me, only happens once every 4 years.

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International Employment Law “Quick Facts”: India

Mariana Villa da Costa – Littler Mendelson

Hello Readers! Sorry about the radio silence, but I am back with another edition of our  “International Employment Law Quick Facts”! Based on our readers requests, I have chosen India for the next in this series.

India is a place of exotic food, beautiful architecture and Bollywood! But, it’s also a developing country with the world’s second largest labor force and an economy that is taking over many others, and becoming one of the best places for global companies to invest. One important observation – Indian Labour and Employment Law is among one of the most complex in the world, so while I know the outline that follows is a good start, it is always a great idea to consult a lawyer.

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Independent Contractor or Employee?

Mariana Villa da Costa – Littler Mendelson

There are many situations when companies consider hiring “independent contractors” rather than direct employees.  When considering such a step in an overseas market, each country’s labor law should be consulted to determine the specific requirements of independent contractors in that country.  Here are some issues to consider that are commonly addressed by most country labor laws.

Independent Contractor or Employee?
The difference between an employee and an independent contractor is determined based on the requirements that one must have to be an employee.  While each country is different, generally, an individual will be considered an independent contractor and, therefore, will not be covered by the labor legislation, if he or she has independence to perform the work and it is not subordinate to a company’s directives and regulations, and when there is no exclusivity in the relationship between the parties.

5 Questions to Assess Independent Contractor Status

Here are 5 questions to help you determine if a relationship is a true independent contractor:

  1. A worker is an employee if the company has the right to control the manner and means of accomplishing the result desired.
  2. An employee is paid for his/her time and bears no risk of wage loss if the employer’s product is unprofitable.  An independent contractor has the opportunity to profit from the project and the risk of loss, depending on the worker’s managerial skill.
  3. An employee is not required to invest in the employer’s business.  An independent contractor makes some investment in tools, equipment, supplies, and facilities appropriate for his/her business.
  4. An employee may receive training.  An independent contractor has the skills necessary to perform the task without additional training.
  5. An employee enjoys a continuing relationship with the employer.  An independent contractor generally works on one project and moves on, accepting additional projects when and if available.

Key Considerations for Independent Contractors

Before engaging an independent contractor, be sure to consider the following:

  1. Determine the real need to have an independent contractor.  Could this work be done by an employee instead?
  2. Draft an independent contractor agreement that makes the case for real independence. Prepare a very clear and specific agreement.  Address all possible issues and avoid having the contractor sign non-compete restrictions.  Avoid mention of bonuses or other provisions, such as  vacation, work hours and other stipulations that look like employment terms, in the independent contractor agreement.
  3. Structure the day-to-day working relationship to support the contractor’s independence. For example:
    1. Do not put the contractor in the employment list or in the payroll and keep the contractor off organization charts.
    2. Do not provide an office or company business cards and do not schedule hours.
    3. Avoid constant email with requests that are more closely to control than simply guidelines on how the company wants a final product to be delivered.
    4. Do not pay the same amount every month.
    5. Ask the contractor to invoice the company with detailed information on hours worked and project deliverables to justify payment.

Additional Tests to Assess Independent Contractor Status

This checklist is based on the one developed by the US Internal Revenue Service (IRS).  It gives valuable information that characterizes most independent contractor relationships across the globe:

  • No instructions
  • No training
  • Services do not have to be rendered personally
  • Set own work hours
  • Not a continuing relationship
  • Control their assistants
  • No interim reports
  • Paid by job
  • Time to pursue other work
  • Decide on job location
  • Order of work set
  • Work for multiple companies
  • Pay business expenses
  • Have own tools or equipment
  • Significant investment in their business
  • Offer services to general public
  • Can make entrepreneurial profit or loss
  • Cannot be fired at will
  • No compensation for non-completion

Maintaining the proper classification of employees versus contractors is very important to ensure compliance with labor law regulations.  The rules are unique to each country, and HR professionals are urged to review the specific requirements for each country as needed.

Important Note: These guidelines are intended to provide a brief overview of the independent contractor issues in foreign countries.  It is not intended as a substitute for professional legal advice and counsel.

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International Employment Law “Quick Facts”: Canada

Mariana Villa da Costa – Littler Mendelson

Hello Readers! The first edition of our “International Employment Law Quick Facts” was a success! Many readers commented on the article and asked me to prepare profiles for other countries.  Again, please feel free to add a comment, or send me a note to let me know what you think about this post.  We will try to publish additional installments in this series based on what you request, so keep checking back!

Q. What are the definitions of employee, employer and independent contractor?

A. Before going into our definitions it is important to note that in Canada, the employment practices of most employers are provincially regulated, whereas federal jurisdiction is limited to employers that deal with national infrastructure, for example, banking, railways, and airlines.  Since each jurisdiction in Canada has specific legislation, it is important to become familiar with the local specifics before engaging in any labor and employment matters.

In Canada, the statutes that confer rights and obligations to employees and employers usually contain definitions. The Ontario Employment Standards Act has a good definition of Employees:

  • a person, including an officer of a corporation, who performs work for an employer for payment (wages);
  • a person who supplies services to an employer for wages;
  • a person who receives training from a person who is an employer, and
  • a person who works from home  for an employer.

Employer, on the other hand, is an owner, proprietor, manager, superintendent, receiver or trustee of an activity, business, work, trade, occupation, profession, project or undertaking who has control or direction of, or is directly or indirectly responsible for, the employment of a person on it.

Although there is no precise definition of the term “independent contractor” the idea is always of direction and control.  An employer is entitled to direct and control how and when the work is performed.  An independent contractor is left to determine how to perform the services for the client; the firm that retains the independent contractor  can only specify the product and result of the independent contractor’s work.

Q. Is it necessary to have written employment contracts in Canada?

A. In Canada there is no need to have a written employment contract.  A contract of employment will exist if it was agreed, either orally or in writing. However, written contracts are not customary, unless it is for executive positions, or if employees are hired for a fixed term or task.

The main reason for having a contract for executives is to clarify and address the severance package.  On the other hand, the need to have them in place for employees hired for a fixed term or task is to avoid the statutory obligation to give notice of termination.

Q. Are there any specific rules in regards to the duration of employment contracts?

A. In Canada, if there is no specified term, the contract will be presumed to be for an indefinite term. However, parties to an employment relationship can agree on employment for a fixed term.  In this case, the employer will not have to dismiss the employee and give reasonable notice.

It is important to note that if the fixed term of a contract expires and the employee continues to work without entering into a new fixed term agreement, it is understood that the contract becomes for an indefinite term.

Q. Are there any rules in regards to discrimination in employment?

A. Canada has very serious regulations in terms of human rights and discrimination; this is prohibited in various grounds.

The Canadian Charter of Rights and Freedoms sets a constitutional standard that all governments must follow — federal and provincial. The Charter states that every individual is equal before and under the law and has the right to equal protection. However, this Charter cannot be directly used by an employee against the employer; in those cases, the individual must rely on human rights statutes to challenge discrimination on employment terms and decisions.

The Ontario Human Rights Code is an example which defines that discrimination is prohibited in the areas of employment, accommodations, services, facilities and signage. It protects employees from discrimination on the grounds of race, place of origin, ancestry, race, ethnic origin, citizenship, creed, gender, sexual orientation, age, marital and family status, disability, and also addresses sexual harassment.

Q. What are the rules regarding working hours?

A. Different employment statutes in Canada define the work day and work week.  In most provinces, the standard work day is eight hours, but the standard work week varies in different provinces – the low is 40 hours per week, for example in British Columbia, and the high is 48 hours per week (Ontario) .

It is also important to note that most employees who perform supervisory and management functions are excluded from standard hours regulations.

Q. Are there any minimum wage requirements in Canada?

A. In Canada, an employer is obligated to pay employees wages of at least the minimum established in the jurisdiction of employment. In some cases and in some jurisdictions, employers do not need to pay minimum wage, for example, students who work in Ontario.

Q. What are the rules regarding the termination of employment?

A. In Canada the employment relationship can only be terminated for:

(i) Just Cause – When the employee engages in serious misconduct, e.g., disobedience, unlawful or dishonest conduct, violence, subordination, etc.  In this case, the employee is not entitled to any compensation beyond salary up to the day of termination.

(ii) Without Cause – Employer does not need any motive to terminate employee, however, reasonable notice or pay in lieu of notice must be provided.

Q. What should an employer know about benefits and social security in Canada?

A. Canada has an extensive social security system covering pensions and social welfare benefits, which provide coverage for almost the whole population.  Responsibility for the planning, management and delivery of social security programs is shared between the federal and provincial governments.

The universal pension system is state-funded, while employees, employers and the self-employed must contribute to the earnings related pension scheme and the employment-related benefits scheme, which covers sickness and maternity pay, unemployment benefits and other welfare assistance.

The only benefits that employers need to provide to employees are those related to the mandatory statutory social security programs, such as:

  • The Canada Pension Plan (CPP) for residents outside the province of Quebec and the Quebec Pension Plan for the residents. The CPP is a national social security program mandatory for all employers.
  • Federal employment insurance – a mandatory contribution that fund income frpm loss of employment, maternity, parental and sickness benefits.
  • Provincial worker’s compensation regimes – maintained in each province –  provide benefits in case of workplace injuries.
  • Provincial health and hospital insurance plans – provide for basic medical assistance and essential hospital care.

In Summary

I hope this quick summary can be used as a road map for employers doing business in Canada.  Please post your questions and comments.

Important Note:  This posting is intended to provide a brief overview of employment law in Canada.  It is not intended as a substitute for professional legal advice and counsel.

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International Employment Law “Quick Facts”: Brazil

Mariana Villa da Costa – Littler Mendelson

Happy New Year readers!  We are excited to launch a new series of posts on the basics of global employment law called “International Employment Law Quick Facts.”    The series will bring basic, but important information on what an employer needs to know when hiring someone in a different country, using an easy to follow Q&A format.  We will capture information such as definition of employer and employee, requirements for written employment agreements, consequences of discrimination and harassment in the workplace, minimum wage requirements, etc.

We will kick off 2010 with the first country in the series – my native country of Brazil.   I would be more than happy to get suggestions from you, readers, on which other countries you want to see next!  Add a comment, or send me a note to let me know your suggestion.  We will try to publish upcoming installments in this series based on what you request, so keep checking back!

Q. What are the definitions of employee, employer and independent contractor?


Employee:  The legal definition of employee by the Labor Code is  every individual (natural person, never a legal entity) that personally renders services on a non eventual basis (continuity), under the employer subordination (obedience to rules and orders given by the employer), and that receives a salary.  If one of these requirements is not present in the relationship, it is not an employment relationship.  As in most countries, it is very important to correct classify the relationship to avoid the common issues with independent contractors vs. employee definition.

Employer:  An employer is the sole-proprietorship or joint-proprietorship company that, in assuming the risk inherent to the economic activity, hires, remunerates and manages the personal provision of services.

Independent Contractor:  The difference between employee and an independent contractor lies on the requirements that one must have to be an employee.  An individual will be considered an independent contractor and, therefore, will not be covered by the labor legislation, if he or she has independence to perform the work and it is not subordinate to a company’s directives and regulations, and there is no exclusivity in the relationship between the parties.

Q. Is it necessary to have written employment contracts in Brazil?

A. According to the Brazilian law, the execution of an employment contract is not mandatory; however, it is important to note that this is common procedure in Brazil and should be observed as a good practice.

Q. Are there any specific rules in regards to the duration of employment contracts?

A. In Brazil, and due to the principle of continuity, the general rule is that the agreement is entered between the parties for an indefinite term. The agreement for a definite term is an exception to the general rule and should be entered in writing.

According to the Labor Code, an employment for a definite term can only be executed in a few circumstances:

  • A maximum of two years, provided that the nature of the work justifies the transitory nature, or the if the contract is for the performance of temporary business activities; or
  • A probationary or trial period (cannot exceed 90 days and must be in writing).

Q. Are there any rules in regards to discrimination in employment?

A. Yes, the Brazilian Federal Constitution prohibits discrimination, although it does not define what that is.  It simply says that any difference in salary or unequal treatment in relation to recruitment and employment is prohibited.

Q. What are the rules regarding working hours?

A. In Brazil, the Federal Constitution and the Labor Code provides that the maximum hours per week are 44 hours, or 8 hours per day.

An employee cannot work more than two overtime hours per day since the workday cannot exceed the legal limit of ten hours; however, the law provides some very exceptional situations for overtime in the excess of two hours.

The minimum additional overtime pay is 50% of the regular hourly rate, but it may be higher if established in a collective agreement.

Employers must allow an interval of 11 hours of rest between two working days.

Q. Are there any minimum wage requirements in Brazil?

A. Yes, the Brazilian Federal Constitution has established a system of national minimum wages.  The minimum wage is fixed every year by law, but some categories also put in place their own professional minimum wage that cannot be inferior to the national one.

Q. What are the rules regarding the terminations of contracts?

A. Employers in Brazil may terminate contracts in Brazil with or without a cause, provided that all termination and severance amounts are paid.

The only exception is that the employer cannot terminate an employment contract when the employee is under a provisional job tenure, for example, female employees during and after pregnancy, and employees who are union leaders.

In Summary

I hope this quick summary can be used as a road map for employers doing business in Brazil.  Please post your questions and comments.

Important Note:  This posting is intended to provide a brief overview of employment law in Brazil.  It is not intended as a substitute for professional legal advice and counsel.

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Preparing Your Company for a Global Pandemic

Mariana Villa da Costa – Littler Mendelson

Over the last decades, we have seen new infectious diseases appear, some of which could kill millions of people within days: mad cow disease, bird flu, SARS, Hantavirus, Ebola, dengue fever, and most recently, spread of the H1N1 “swine” flu.  In 2009, the World Health Organization declared H1N1 a pandemic.  As of November 15, WHO reports that H1N1 is present in over 206 countries and territories globally, and over 500,000 cases have been documented.  The pandemic raises many HR issues, especially for global employers.  Why?

The workplace is an ideal place for spreading disease, from the common cold to the serious swine flu, as people are in a close daily contact, sharing printers, telephones, eating together in the office’s kitchen, and, most of the time, breathing the same, re-circulating air.  Every company strives to keep its employees healthy and safe, not only for their own benefit, but also to ensure its operations continue full force.  Let’s highlight a few of the issues companies need consider when preparing a plan to address a global pandemic:

Go global, but do not forget local!

Companies can draft a global, standard pandemic plan, but you still need to account for different laws and regulations in the specific countries or regions where you operate. So make sure your company reviews any local employment and health laws before implementing the plan, in order to avoid potential legal issues and liabilities.

What’s in the plan?

Every global pandemic plan must address at least these issues:

  • Communication – Procedures on how an employee must inform their employer of a disease and steps the company needs to take to ensure immediate safety for the sick employee and the other employees.
  • Discipline – How the company should deal with employees who refuse to go to work for fear of getting sick, and measures for abusive and unfounded absences.
  • Privacy – How the information about a sick employee or a sick family member must be managed, including required government reporting.
  • Shut Down – If a shutdown of the company facility becomes necessary because of the spread of a contagious disease, the company needs to define, according to domestic laws, how employees will be paid and alternative ways to keep the employees working.
  • Travel issues – Your plan should address issues related to employees traveling for work to risky locations.  The plan should cover the conditions when travel should be deferred or suspended. It should also address how employees traveling for personal reasons should deal with a potential contagious disease in order to protect the rest of your workforce.

Adapt, adapt and adapt!

Once you have your broad global pandemic plan, consult a local or international lawyer to draft specific provisions and re-write any conflicting ones, just like most companies do for their other global policies, such as Codes of Conduct, discrimination and harassment policies.

Tell your employees!

Communication is key.  Make employees aware of the implementation of a global plan by preparing presentations and/or training on the issues addressed by the plan. Use simple, common language to make sure employees understand the plan and are not alarmed by it.  Be sure to communicate the plan in all the common local languages in each country.  Encourage employees to take the information home and share it with their families.

Get Involved Now!

HR staff plays a key role in creating and implementing a plan to respond to a pandemic.  In addition to helping draft the plan and organizing implementation of it, Global HR must also focus on:

  • Education – Develop plans to educate employees in the prevention and spread of contagious and potential pandemic diseases in the workplace – signs, training, providing hand sanitizing, etc.
  • Partnership with the Community – Work closely with local health departments and other officials to take advantage of their resources, and secure a role for your company in community prevention efforts.
  • Awareness Make employees aware of the resources available to them for prevention and cure under the company’s health care plan or clinic, national health insurance, and other resources.
  • Policy Updates – Review and update sick leave policies to address a pandemic situation (for the employee and to take care of sick family members).

As you can see, there are many things to consider in developing a plan to address a global pandemic.  I hope this article provides you with a good start in developing a plan for your company.  Don’t forget that any global plan must be carefully prepared and reviewed by local or international counsel to avoid any liabilities for the company and risks for the employees.

Have you already developed a plan for responding to a pandemic?  Share your comments to enrich the information in this post!

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Guidelines on Dangerous Assignments – When Your Employee is Risking His Life for the Company

Mariana Villa da Costa – Littler  Mendelson

It is a big and dangerous world we live in today.  There are many “hotspots” around the world where the personal safety and security of staff can be in jeopardy unless the proper precautions are taken.  Expatriate employees assigned to high-risk locations are especially vulnerable.  Companies need to become familiar with the actual in-country conditions, work with security experts to do a risk assessment, and evaluate and update their assignment policies to minimize the risk to assignees and company alike.

What’s Dangerous?
Assignments may be considered dangerous in locations that have some of the following characteristics:

  • Countries where war, civil insurrection, or terrorism exists and presents physical harm or imminent danger to the health or well-being of an employee.
  • Widespread, uncontrolled violence or disease.
  • Lack of infrastructure (limited availability of basic goods and medications, for example).
  • Lack of family support services, such as schools, health care, etc.
  • Extreme physical conditions (sub-freezing temperatures, remote locations, etc.).

Companies often have a difficult time attracting and retaining people for these assignments, as the assignment is likely to be very stressful on the employee and family.  A proactive approach helps to address the problem.

Steps to Manage Extreme Hardship Assignments
There are several measures that can be taken by employers to address the unique challenges of extreme hardship assignments.  Here is a checklist to follow:

  1. Should the assignment include family members, or is an unaccompanied status required?
  2. Expatriate package should be reviewed to consider extra allowances and other benefits, as appropriate.  Some examples are:
    • Hardship Pay – Usually 10% to 25% of base salary, to compensate employees for extreme living conditions.
    • Danger Pay – Typically 15% to 25% of base salary, in addition to all other compensation.
    • Travel Benefits – Extra trips, or allowance to make trips for R&R (rest and relaxation) on a periodic basis, in a safe and secure location.
    • Assignment Letter – Update to include details on all extra benefits and explain the conditions the employee will find in the location.
  3. Safety and Personal Security precautions should be followed and training and information provided to each assignee (and family members), including:
    • Security Briefing and Training – Ensure every assignee is informed about the security risks in-country, knows how to address them, knows where to go in an emergency and whom to call (in the company, and perhaps outside security consultants as well).
    • Bodyguards (if required).
    • Secure Housing – Limitations on where assignees can live, to eliminate situations that are particularly risky.  Apartment complexes, gated communities or compounds many be appropriate.  Armed guards and security systems are typical.
    • Legal Representation Abroad
    • Kidnap/Emergency Response
    • Emergency Evacuation Procedures – Each assignee must understand the company’s procedure for evacuation, how it affects family members, etc., in the event of natural or man-made disaster, war or other catastrophe.
  4. Health issues are another important consideration.  Are there adequate medical facilities available in-country?  If not, what sort of arrangements can be made?  You also need to consider contagious diseases, insect-borne illnesses, HIV and other sexually-transmitted diseases, extreme pollution, blood supply, treatments for chronic illness, availability of prescription drugs, and applicability of health insurance.  There are health experts that specialize in assisting companies and families in health assessments, medical evacuations and similar challenges.Don’t forget the basics, such as up-to-date vaccinations!
  5. Other insurance (beyond health insurance) is often required.  Typical examples:
    • Life and Disability Insurance – Make sure coverage is valid in the assignment country.
    • Kidnap and ransom insurance
    • Burglary and other household effects insurance
    • War risk insurance – Often needed in countries designated as war zones.
  6. Cross-Cultural Training should be provided to ensure a relatively smooth transition for the employee, and a realistic preview of what daily living is like.  Companies often view such training as “too soft,” but experience shows that it is extremely helpful to prepare assignees well for many contingencies.
  7. Crisis Management Protocols should be defined in each organization.  Some suggestions:
    • Define a protocol for assigning “critical” status to disaster or crisis situations. It is important that companies have informed local sources to ensure that their assessment of the situation is valid and current.
    • Formalize and communicate country or regional contact points and phone numbers.
    • Set up a procedure for the employee in the event of an emergency.
    • Ensure that employee emergency contact numbers, as well as home and office phone numbers, are on record with the home office and the country contact person.
    • Conduct emergency evacuation briefings or updates upon assignment and at periodic points during assignments, particularly in areas of potential risk or conflict.
    • Plan for financial and travel contingencies.

Other Resources
There are many other resources to assist employers in managing extreme hardship assignments.  Start with the US Department of State Travel Warnings.  The UK Border Agency provides a listing of current conditions in many countries, as does the US Central Intelligence Agency World Factbook.  Forbes Magazine publishes a list of the World’s Most Dangerous Countries, which offers some useful information.  Check with security consultants and health care experts as well.

Managing assignments to dangerous places is a challenge for employers and stressful for employees.  Careful planning, sound policies, advance preparation and of course, a sense of adventure, are all steps to mitigating the risks and ensuring a successful assignment for your company.

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Россия – Questions and Answers on Labor and Employment Law in Russia

Mariana Villa da Costa – Littler Mendelson

Are you doing business in Russia?  Need help to understand the basics of Russian Labor and Employment Law?  This post will provide you with a basic understanding of how to employee staff and operate your business in Russia.  I will also highlight some key requirements that every employer needs to know.

Russia has a labor code that is extremely employee-friendly, as compared to other countries, such as the U.S.  For example, did you know:

  • Almost everything in Russia must be done formally and on paper;
  • Contracts are normally for an indeterminate term – fixed-duration employment contracts are almost unheard-of;
  • It is very difficult to terminate an employee; and
  • Any employee, without regard to seniority or nationality, is free to leave the company after just two weeks’ notice and has the right to work for a competitor immediately.

What is the main source of labor and employment law in Russia?

The Labor Code is the main codified statutory act and it governs the relationship between employees and employers of all types.

The parties to an employment relationship cannot contract differently from what is imposed by Russian labor law.  Therefore, if any provision of the employment agreement harms or makes the employee’s situation worse it will be considered invalid under the Labor Code.

Employees are entitled to minimum guarantees and protections that are mandatory and cannot be altered, even if the employee allows the employer to do so.  This allows the employees to have a bargaining power normally not found in the many countries.

Who is an employee? And an employer?

An employee is a natural person who enters into an employment relationship with a an entity/natural person for the personal execution of work, with an specific remuneration and under the employer’s subordination.

An employer is a natural person or a legal entity that is an employment relationship with an individual.  It must provide the employee with work specified in an agreement and it must ensure that the labor conditions are adequate and legal.  Furthermore, the employer pays remuneration on a regular basis.

Does a foreign employer need to have a local entity in Russia to employ local workers?

Russian law does not require a foreign employer to set up a local entity in order to employ workers in Russia.  Individuals can be employed by a company which is incorporated in a country other than Russia and has no representation in Russia. However, a signed employment contract between a local worker and an entity having no representation in Russia still will be guided by Russian law as the main place of work is Russia.  And, a foreign entity might be considered to have a Permanent Establishment (PE) in Russia, which could have profound corporate tax consequences.

Are employment contracts necessary in Russia?

Yes. Under Russian law, an employment contract is necessary and should be executed in writing.

However, if the company fails to have a contract, the employment relationship will still exist and be valid, and it will be considered to have existed upon the actual commencement of work.

In this case, the employer is obliged to conclude an employment agreement within three days of the employee’s actual commencement of work.  Therefore, an employment contract not executed in writing still is considered concluded and thus binding, effective and enforceable if the employee has commenced work with the employer’s knowledge.

In general, employment agreements in Russia are for an indefinite term.  A fixed-term employment agreement (for up to five years) may be concluded only in limited circumstances (for example, temporary positions, or temporary replacement of an employee).

Are there specific terms that every employment agreement should have?


Besides basic information for employee and employer, such as name and taxpayer identification number, every Russian employment agreement should include:

  • Employee job title; occupation; the specific type of work the employee is to perform;
  • The place of work, and whether the employee is hired to work in the organization’s branch, representative office or another detached structural unit located in another area;
  • Start date and, if the agreement is for a fixed-term, the effective term of the agreement and the circumstances serving as grounds for why having a fixed-term employment contract under the Labor Code or other federal law;
  • Compensation and benefits;
  • Working hours and leisure hours;
  • If necessary, the terms and conditions defining the nature of work (mobile, traveling, en route, or other kind of work); etc.

Can we prepare the contract in a different language than Russian?

Russian, as the official language of the Russian Federation, must be used by all companies in their employment agreements, regardless of their ownership structure.

However, if you are sending foreign employees to work in Russia,  in practice, the employment contract will also be signed in the fluent language of the foreign employee. That will guarantee that the individual has a clear understanding of rights and responsibilities under the agreement.

How must salary payments be made in Russia?

Salary in Russia must always be paid in Russian currency (rubles).  Employees should be paid not less than twice per month, and must receive at least the minimum monthly wage established by law.

Many foreign companies tend to pay the employees in a currency different than the Rubles.  This is considered a violation of Russian law which the authorities deem discriminatory.

What else do I need to know about employment regulations in Russia?

In addition to the specifics I mentioned above, you also should know about the following if you have employees in Russia:

  • Employment contracts may be terminated only for certain reasons. Dismissal should be effected in strict compliance with the procedures established by law; failure to follow these procedures may serve as grounds to prove the dismissal to be unfair.
  • Russian labor law is bureaucratic, and thus employers are required to keep a large amount of internal documents and closely follow the procedures stipulated by law which also require execution of various documents.
  • Background checks and medical examinations are mandatory for certain jobs, while for other jobs, requesting such information on the applicant or employee might constitute invasion of privacy.
  • Noncompetition agreements, and customer and employee nonsolicitation agreements, are generally not enforceable in Russia.
  • Discriminatory conduct may constitute a criminal offense;
  • The employer in most cases acts as taxpayer or a tax agent.
  • To obtain certain (extended) rights to the intellectual property created by the employee, the employer should undertake certain actions within a limited time span.
  • The employer should not impede employees meetings and strikes, and lockout is prohibited.
  • Workplace safety regulations require special training of employees, certification of workplaces, investigation of workplace accidents, etc.
  • The employer should not impede employees meetings and strikes, and lockout is prohibited.
  • Sale of business (shares, assets of the company) does not generally constitute ground for dismissal.
  • Maintain an ongoing dialogue with employees to build loyalty. The ethical and moral aspects of employment are considered very important in Russia.
  • Be aware that the Russian labor code applies to all types of employees from all nationalities.
  • Initial recruiting processes are crucial, since it is very complicated to dismiss an employee.

This posting is intended to provide a brief overview of labor and employment law in Russia.  It is not intended as a substitute for professional legal advice and counsel.  Please post your questions and comments!