Employment Contract in Russia: Basic Information

Russian employment law inherited a number of Soviet traits. It protects employees to the highest extent but sometimes only on paper. It is not uncommon that the employers do not respect some rules which puts them into vulnerable position and thus creates a room for negotiations at later stages of employment but in order to avoid getting into troubles, an employee shall pay a close attention to some basic rules when entering into employment relations:

  • Written form: an employment contract shall be signed with each employee and shall be in writing. However, if no contract was signed and if an employee started working de facto, the contract is deemed to be concluded.  

  • Trial (probation) period up to 3 months: if an employee is hired with a trial period, it should be directly mentioned in the contract. The maximum duration of the trial period is three months for all the employees except for managing director, deputy managing director, chief accountant and his deputies. For those categories a trial period of six months is envisaged. Although it is not mandatory to have a trial period, employers insist on including it. During “trial” period a person may be fired at any time (which is difficult to do after the trial period). In this case the employer has to notify about dismissal in three days with listing the reasons for this decision

  • Duration: in Russia employments contracts maybe with fixed or non-fixed duration. As a general rule, the contracts shall be non-fixed. In a limited number of cases the contract could be of a fixed duration, i.e. to replace an employee on a maternity leave, or if in the company there are less than 35 employees (however, in this case an employee may refuse to sign). The maximum duration of the fixed term contract is five years. 

  • No-competition: The Russian law does not allow imposing restrictions on the employee’s rights to employment either during contract or after its termination. It means that no-competition provisions will be declared not valid by the courts.  

  • Taxation: a foreign employee who spends less than 183 days per year in Russia is considered a non-resident for tax purposes. Such employee has to pay a personal income tax amounting to 30%. This rule is not applicable to highly qualified employees who pay 13% income tax. If an employee spends more than 183 days per year in Russia, then the rate for personal income tax equals to 13%.  

  • Working time: 40 hours per week with usually five work days usually but could be up to six (if number of the working hours does not exceed 40 per week). A mandatory day-off is Sunday.

  • Annual leave: Annual leave should be no less than 28 calendar days. The annual leave could be taken six months after commencement of employment. The annual leave shall be taken in portions, but at least one portion must be no less than 14 calendar days.