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Labor law inspections

By Inna Krivoborskaya, Lawyer at Accountor

State authorities have tightened control over compliance with labor laws.

To minimize risks for your business, we suggest monitoring Russian laws which are regularly updated.

What kind of inspections are they?

The General Labor Inspectorate conducts two types of inspection: scheduled and unscheduled inspections.

You can find out whether your company is listed in the inspection schedule on the website of the General Procurator’s Office of the Russian Federation, of the Federal Service for Labor and Employment (Rostrud) or of the local labor inspection.

The grounds for unscheduled inspections are set out in Article 360 of the Russian Labor Code. Although not the only one, complaint from employees is the most popular ground.

Inspections can be conducted on a desk or field basis.

In case of desk inspections, inspectors send an inspection order to companies that will be subject to such inspection.

In case of scheduled field inspection, inspectors visit companies in person and hand over inspection orders to employers’ representatives upon such visit.  

What does the labor inspection check?

During scheduled and unscheduled inspections, inspectors check:

  • compliance with labor law requirements;
  • compliance with labor inspection regulations;
  • whether measures have been taken to prevent personal injury, environmental damage, etc.

Labor authorities are not entitled to warn employers that they will be subject to an unscheduled inspection. Moreover, such inspections may be conducted immediately upon notice of the general procurator’s office.

Labor regulations have changed significantly and regularly over the past few years so we recommend conducting an internal verification of compliance with labor laws and other regulations containing labor rules.

Labor authorities verify the following typical labor situations and regulations:

  • Recruitment
  • Amendment and termination of employment contract. Liability of the parties to employment contract
  • Personal data protection
  • Working hours and time off
  • Salary
  • Guarantees and compensations
  • Health and safety
  • Labor regulation of certain categories of employees

HR documents that are checked first:

  • Pay related documentation
  • Internal work regulations
  • Employment contracts
  • Staffing table
  • Timesheets
  • Timesheets for employees working in hazardous conditions
  • Payroll timesheets
  • Sick leave notes
  • Vacation schedule
  • Personal record card
  • Appointment orders, personnel orders
  • Employment record books
  • Log of employment record books and their inserts
  • Pay and bonus policy
  • Personal data protection policy and documents

We recommend reviewing these documents for compliance with applicable regulations and bring them in line with current regulations if necessary.

Checklists – basis for scheduled inspection

In case of scheduled inspections, companies may find out exactly what will be checked in advance. A risk-based approach is now applied when conducting inspections. Certain risk categories are assigned to companies “depending on an indicator of potential harm to labor values protected by law (life and health of employees, labor rights of employees related to non-payment or late payments of wages and other payments made under employment relationships).” 

Rostrud has prepared 132 types of checklist. Some of them have been compiled to check compliance with general mandatory labor requirements. Such checklists apply to all companies. Examples of general checklists:

  • Content of employment contracts
  • Establishment and payment of salaries
  • Special assessment of working conditions

The remaining checklists have been prepared to check compliance with health and safety requirementsdepending on the type of activity. Such checklists apply to companies that meet certain specific criteria.

It is possible to find out the checklists relevant to your company using the service known as Electronic Inspector.

It is advised to use these checklists to prepare for scheduled labor inspections and check whether all questions will be answered.

What are the typical violations usually identified by labor authorities?

Salary

Companies are most often brought to liability for violation of salary payment.

For example, companies often forget that it has been required since 2017 to pay salaries in 2 instalments per month. This rule also applies not only to 40% of fixed salary but also to additional payment for overtime, night shifts, work in hazardous conditions, etc. The use of the concepts of “advance payment” and “final settlement” is a violation of the Labor Code.

The rules for provision and payment of vacation are also often violated as outlined below.

1. Vacation schedule not approved by employers

The law requires to get vacation schedules approved no later than two weeks prior to the beginning of the calendar year.

Employers are brought to liability if they:

  • Fail to approve the vacation schedule
  • Approve the vacation schedule late
  • Approve the vacation schedule but did not take into account the opinion of the company’s trade union

Sanctions for violation: a warning or a fine from RUB 1,000 to RUB 5,000 for company director and from RUB 30,000 to RUB 50,000 for companies.

Sanctions are sometimes imposed on employers for failing to familiarize their employees with the vacation schedule. If your company is fined for such violation, do not agree. Such approach is indeed not right as the vacation schedule is not an internal regulation. However, to avoid disputes with labor authorities, we recommend bringing the vacation schedule to the employees’ attention with signed acknowledgment.

2. Employers fail to notify employees 2 weeks prior to vacation start

Employees must be notified of their vacation two weeks prior to their vacation start.

Employers violate the law if they do not notify their employees or notify them late.

Sanctions for violation: a warning or a fine from RUB 1,000 to RUB 5,000 for company director and from RUB 30,000 to RUB 50,000 for companies.

3. Late payment of vacation

The law requires to pay vacation at least 3 days prior to the vacation. If employers fail to pay vacation by the due date, labor authorities see such failure as a violation. Employees often submit their vacation application late so employers are unable to pay in time.

Since there are no rules in labor laws specifying when employees should submit their vacation applications, we recommend drawing up internal regulations specifying a deadline for submission of vacation applications, providing, for example, that employees should submit their vacation application at least 2 weeks prior to the vacation start. This way, the accounting department will manage to make payments in due time.

Vacation payments are verified as follows:

  1. Labor inspectors review vacation orders and compare the date of order issuance and the date of provision of vacation. If the date of order issuance is the 1stof the month, and the date of vacation start is the 25thof the month, then payment documents confirming the payment for such vacation are, as a rule, not requested from employers.
  2. If the date of order issuance is the 1stof the month, and the date of vacation start is the 2ndor 3rdof the month, then documents confirming timely payment are requested.

When employees request vacation too late, the only way to avoid violation is to request employees to resubmit their application later so that payment can be made in due time as required by law.

Fine for employersfor late payment of vacation and any other payments owed under employment relationships – from RUB 30,000 to RUB 50,000.

4. Employees do not take vacation for years

Employees must go on vacation every year. If going on vacation may adversely affect the regular course of work in the organization, then vacation may be postponed with the employee’s consent to the next year.

If vacation is postponed to the next year by agreement of the parties, employees must use up their vacation within 12 months of the end of the working year for which it is provided.

If employers do not provide annual paid leave for two consecutive years, then a fine from RUB 1,000 to RUB 5,000 could be imposed on the company director, and a fine from RUB 30,000 to RUB 50,000 on companies.

Documents and conditions for employment contract

A common violation is when employers provide in their internal regulations that employees are to provide certain documents upon recruitment which are not provided by the Labor Code (for example, INN, personal income tax statement for previous workplace, salary statement for the current year and two previous years).

Sanctions for violation: a warning or a fine from RUB 1,000 to RUB 5,000 for company director and from RUB 30,000 to RUB 50,000 for companies.

If a candidate is rejected for non-submission of documents not provided by the Russian Labor Code, such rejection may be deemed unreasonable, and in such case, a fine from RUB 1,000 to RUB 5,000 may be imposed on company director, and a fine from RUB 30,000 to RUB 50,000 on companies.  

How may we help?

Our lawyers have been assisting clients with HR audits and labor regulation drafting since 1992.

We look forward to advising you and sharing our experience of support in labor inspections of companies, as well as reviewing documents for compliance and bringing them in line with current regulations or even preparing missing documents that you may require.

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