Employment Relations Issues for Employees Who Have Left Russia
Many companies have recently had to deal with situations where their employees (including remote employees) have independently decided to leave Russia and continue working from abroad. We have been receiving numerous requests for consultations on how to properly handle such work legally. It’s crucial now more than ever to act strictly in accordance with the law.
The ALRUD team has compiled a summary of the issues and risks that need to be assessed in each specific case of work performed by an employee located outside of Russia:
- Risks associated with a lack of documentation for such work or its improper documentation;
- Risks associated with compliance with occupational health and safety requirements;
- Risks associated with the liability of employees (including for the failure to perform or improper performance of their job) and/or dismissal of employees;
- Tax risks and liabilities that may arise for an employer in a foreign state (due to work in a foreign state or the creation of a taxable permanent establishment, among other things);
- Tax risks associated with the calculation of personal income tax and insurance premiums;
- Migration risks associated with the work of foreign highly qualified specialists outside of Russia;
- Immigration issues related to an employee’s work/stay in another state;
- Issues related to the temporary stay of a company’s CEO abroad;
- How to properly register business trips;
- Risks associated with sanctions restrictions and counter-sanctions;
- Risks related to compliance with currency control requirements.
The ALRUD team has extensive experience with conducting thorough assessments of these risks and provides comprehensive legal support on all issues related to the presence of companies’ employees in other countries, including:
- Assistance in choosing the best legal way for documenting an employee’s temporary absence from the workplace at a company;
- Advising on the procedure for the taxation of payments to employees due to changes in their tax status or place of employment (the employer’s obligations as a tax agent, the procedure for adjusting tax liabilities in the event of a change in tax status, and the payment of insurance premiums, among other things);
- Advising employees on their tax and foreign exchange obligations in the event they work outside of Russia and the use of accounts opened at foreign banks;
- Assistance in preparing personal tax returns for employees;
- Preparation of a step-by-step action plan for the company - employer in the event that an employee (including a remote employee) leaves Russia without permission;
- Advising on issues related to remote work from abroad, including the documentation of business trips taking into account legal and tax implications;
- Advising on issues related to the military registration and partial mobilization of workers temporarily located in other states;
- Assistance in establishing communication with employees who refuse to comply with the terms of employment contracts they have signed;
- Legal support for personnel decisions that must be taken due to conflicts resulting from an employee’s refusal to comply with the terms of an employment contract;
- Advising on issues related to the liability of employees (including dismissal) in the event they fail to comply with the requirements of laws, employment contracts, or a company’s local regulations;
- Support for official investigations and labour disputes as well as interaction with trade unions;
- Interaction on issues concerning the laws of other states with foreign law firms in countries where employees are located.
Please note that all this information was obtained from open sources. The authors of this letter are not responsible for any consequences resulting from decisions taken based on this information.