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Workforce Flexibility and Government Incentives in times of Covid-19 - Russian Federation

Short-term State Aid

Covid-19 Questionnaire

Are there any regulations in place providing an employer with possibility for flexible workforce planning such as part-time work/temporary leave which are triggered in a situation similar to a pandemic outbreak as Covid-19?

Furthermore, the period from 25 March – 11 May (inclusively) was announced by the Russian President as the ‘non-working days’ period; the employees, however, were subject to full payment of salary.

The organizations which continued to work within this period included:

  • medical organizations and pharmacies;
  • grocery stores and outlets selling essential goods;
  • banks;
  • organizations performing emergency repair and handling operations;
  • organizations that work to counter the spread of Covid-19;
  • as well as “continuously operating organizations”. These include enterprises with a continuous technological process that ensure the life of the city: housing and communal services, transport, builders, energy, logistics, etc. However, even such organizations should have switched to remote work to the maximum extent possible within ‘non-working days’ period.

Are there any regulations in place providing an employer with possibility for flexible workforce planning such as part-time/ temporary leave which would be triggered in a situation similar to a virus outbreak as Covid-19?

‘Non-working days’ should have been paid in full.

Generally, reduction of working time (and accordingly proportional reduction of salary) is subject to the employee’s consent, since change of any substantial conditions of employment is possible only by mutual agreement of the employer and employee. As an alternative to agreement on part-time an employer and employee may also reach an agreement on (unpaid) vacation.

In exceptional cases, in situations where due to changes in working conditions (organizational or technological), there is a threat of dismissal of a large number of company employees, the employer may switch to the "reduced working hours regime".

If YES on question 7, please describe which type of regulation. Please confirm if and to what extent such leave can be supported by state aid (incl. sick pay or similar) and/or other extra ordinary governmental support?

The "reduced working hours regime" is an exceptional measure. Such a reduction could be introduced for no longer than six months; the respective decision should be adopted after consultations with the employees’ representative body (labor union organization) (if any); the employment service should be notified thereof.

Are there any governmental programs if a company needs to close totally or partially for a certain time period?

There are governmental programs to help business to recover (however, they are applicable to those companies that have not closed down).

Thus, starting 1 June 2020, a credit program to support employment will be launched for all enterprises in the affected sectors and socially oriented NGOs. The rate will be preferential - 2%. 85% of the loan will be secured by state guarantees. If the company will maintain employment at the level of 90%, then the loan and interest on it will be written off completely. The loan repayment period is 1 April 2021.

Companies that have retained at least 90% of the personnel from 1 April, will receive a direct subsidy for employee benefits for April and May.

If state aid and/or other extra-ordinary governmental support is available, please describe the necessary prerequisites to qualify for such state aid.

The aid mentioned in Q2 applies to the enterprises that belong to the affected sectors (a special list is adopted by the government) or socially oriented non-commercial organizations.

Direct subsidies for employees benefits (12,130 RUR per employee) apply to small and medium enterprises in the affected sectors.

If state aid and/or other extra-ordinary governmental support is available, please describe the application procedure for such state aid (e.g. how and when is the application filed with the government etcetera; what shall such application include).

Direct subsidies are provided upon application to the tax authorities, which check whether the applicant satisfies the established criteria. The form of the application is established; the application could be filed by post or electronically via ‘taxpayer’s personal account’ .

Please note that the COVID-19 scenario is constantly changing and that this information is current as of 04 June 2020. This publication should not be regarded as offering a complete explanation of the legal matters referred to and is subject to changes in the law and other applicable rules.