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Understanding the Russian Labor Market: A Practical Guide

Brought to you by the School of Russian and Asian Studies (www.sras.org),


specializing in educational and internship opportunities in Russia since 1991.

This article may be printed, distributed, and/or quoted for academic purposes if www.sras.org is given
credit for its authorship. Use of this material in any form for commercial purposes is strictly forbidden.

Originally, this article about Russian labor law was to be written twice, once from the perspective of the employee
and again from that of the employer. However, rather than repeat ourselves, we have simply created a map of sorts
for the Russian labor market both in terms of official and unofficial labor practices and with general commentary
inserted from both perspectives where applicable.

We have also tried to provide, wherever possible, commentary on Russian terminology and slang about the
workplace. You will notice that the translations here are not exact. We have tried to provide the commonly used
terms for expressing the concepts in American English and Russian and sometimes the terms do not always exactly
match, but they do refer to the same concept.

This resource has been compiled to give a wide picture for those parties interested in the day-to-day lives of
Russians. If you have commentary, we would love to hear it at jwilson@sras.org.

For More Information

An English-language synopsis of the Labor Code of the Russian Federation (Трудовой Кодекс Российской
Федерации) is available from BakerNet.com (click on "Doing Business in Russia" from their website).
For a massive database of commentary on the Labor Code (in Russian), we recommend www.zarplata.ru.
If you are having trouble reading Cyrillic font on your computer click here.

Special Thanks to:


Alexey Panteleev, Artem A. Babamuratov, Chet Bowling and
especially to the employees of Alinga Consulting Group, a business
consulting and audit firm with offices in Moscow and Boston, for
their help in compiling and verifying this information. ACG is a
sister company to SRAS.

Part I. Types of Employment (занятость) in the Russian Federation

1. Full Time (полный рабочий день)


Most positions in Russia are full time: 40 hours a week. However, since all salaries are figured monthly (not hourly),
the actual number of hours worked is not always an important factor, so long as all job duties are completed (and the
amount of hours does not go over 40).

2. Shortened Full Time (укороченный рабочий день)


Workers under 16, students under 18, the disabled, workers in hazardous conditions, pregnant women, primary
caretakers of young children, and others are entitled to shortened workweeks. Often these weeks are not paid the
same as full workweeks, although in some instances the worker can collect additional funds from the Russian State
Social Insurance Fund (see "Taxes" in Part III of this text).

3. Part Time (неполный рабочий день)


If the employee already has a primary job, the hours of their second job are restricted to 20 per week. Sometimes, in
special circumstances, an employee will be hired specifically for part-time work (is pregnant, disabled, etc). Salary is
still figured monthly.

4. Temporary Work (временная робота)


An employee may be hired for a term not to exceed five years to fulfill a special duty such as: a handyman hired to
remodel an apartment, a marketing rep hired to work abroad, a creative sphere employee hired to develop a new
company logo, etc.

Commentary: Temp agencies are growing in popularity in Russia. Much as in America, companies can lease
employees for a definite or indefinite period of time. Companies sometimes prefer this arrangement because it
makes hiring a temporary employee easier and makes "firing" the employee much easier (since the employee is not
actually fired as his/her primary employment with the temp agency is retained).

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II. Equal Opportunity (Равные возможности)

1. Equal Opportunity in Sex and Age (равные возможности по полу и возрасту)


While Russian courts will treat any employee as equal, employers can establish almost any criteria they wish
for positions. For example, it is very common to see ads for secretarial positions advertising specifically for a
"woman, age 18-24" or for a construction worker advertising for a "man, age 18-34," etc.

2. Equal Opportunity in Race and Nationality (равные возможности по национальным признакам и расовой
принадлежности)

It is legally forbidden to discriminate on the basis of race and nationality in Russia, a country that contains hundreds
of such differentiations and a handful cosmopolitan centers. One never sees job advertisements for "Russians only."
However, informally it seems that this type of discrimination is still fairly commonly practiced.

Commentary: For a handful of stories from Russian workers about how they are treated in the workplace, see the
following article.

Commentary: The phrase "Равные возможности" worked its way into the Russian language around 1990, as the
economy was being revamped along western lines and hence the phrase's close similarity to the English. Below are a
handful of other phrases using the phrase and concept:

наниматель, предоставляющий равные возможности (Equal Opportunity Employer)


равные возможности между лицами разного пола
равные возможности между мужчиной и женщиной
Равные возможности в труде
One may also use the word "Равенство:"
Равенство в труде
Равенство на работе
Равенство при трудоустройстве

III. Looking for a job? (Ищете новую работу?)

1. Where to look for a job (где искать новую работу)


The most famous Russian want ads are Из рук в руки, a newspaper published daily in a format very much like The
Thrifty Nickel in America. However, much like want ads in the states, those in Russia are not generally considered
effective. Websites are better (see below), particularly since companies know that if a candidate applies through
the Internet, they probably know how to work a computer and computer skills are still a fair rarity in Russia. The
most effective means to find a job, of course, is through personal contacts. In Russian there is are phrases for this
including: "пошарить по своим каналам," "пошарить по своим знакомым," "пошарить по старам каналам,"
"продавить по своим каналам." All of these phrases mean "to pull strings," although they are more formal in use.

Commentary: The following are the top five most popular Russian sites for searching for a job (as listed by
Rambler.ru): www.job.ru; www.rabota.ru; www.joblist.ru; www.superjob.ru; www.zarplata.ru.

2. How to apply for a job (как подавать заявление о приеме на работу)

A. The application (форма заявления)


Applications are not particularly common in Russia, save for in some international companies. Often, when an
application is used, it is "short and sweet," not the monsters one usually encounters in America. We have included
here an example application from McDonald's (as a zipped pdf file).

B. The resume (резюме)


The resume is considered the primary document with which one applies for a job. They look much like they do in
English, although often a photo is included, as one is usually kept with employee records anyway. For an example of
a resume in Russian, click here.

C. The job interview (собеседование при приеме на работу)


Usually begins with a short telephone interview (собеседование по телефону), to determine the candidate's basic
qualifications including, for example, availability for the job/workday, education, past work history, friendliness,
certifications and knowledge of a foreign language. This interview is often conducted by the human resources
manager.

If the telephone interview goes well, the candidate is called in for a face-to-face interview (личное собеседование).
This interview is often conducted with several people, including the company director, the head of the
department and sometimes even a company psychologist. Part of this interview may be conducted in a foreign

www.sras.org 2 © 2002-2005 SRAS


language, if that is a requirement for the job. English is the most important foreign language in Russia but depending
on the nationality of the company or clientele, German, Chinese, Swedish, etc. may also be the make-or-break issue
to getting hired.

IV. Getting Hired (найм на работу)

1. The Job Contract (Трудовой договор; контракт)


ALL employment in Russia must be by contract. The contract stipulates what the employee’s job description and
compensation will be. Generally the job description is very broadly defined, since an employer may not ask an
employee to perform a duty not defined in the job contract without providing extra compensation. This job contract
may stipulate any requirement or condition, but may not impinge upon a worker's rights as set forth by the Labor
Code of the Russian Federation (Трудовой Кодекс Российской Федерации).

2. Documentation (документация)

A. Passport (паспорт)
A copy of the employee's passport is made for company records. National passports are the major means of
ID in Russia and must be carried by all persons over the age of 16 at all times. Russian police may stop any
person at any time without cause and if that person does not have proper identification, they are subject to
heavy fines and detention. Separate international passports are used for foreign travel.

B. The “Work Book” (трудовая книжка)


Roughly equivalent to the American
Social Security Card, this passport-
sized document provides proof of
where, when, and how long an
employee worked in a given position
and location, though no remark is
made to the exact duties performed
or performance quality. The work
book is required to claim retirement
funds from the state. The
employer must keep the book for the
Soviet Issue duration of employment and return Federation Issue
it, updated, signed and stamped, on
the last day of employment.

C. Photographs (фотографии)
Most employers will also collect several passport-sized photographs of their employees. These are standard
in company records and are often needed to make a special pass (пропуск) for the employee. Russia is
awash with security guards, a holdover from the soviet era, and most employees must show a пропуск as
special identification to access their work places.

D. Other information (другая информация)


Employers have the right to collect other personal identification as required by company policy and/or the
law, with certain restrictions (information about religious and political beliefs, for example, is forbidden).

3. The "Work Order" (приказ о назначении на должность)


By Russian law, the employer must issue an executive order saying that the employee has been hired no less than
three days after the contract takes effect. This order must be counter-signed by the employee. Similar orders
(приказы) document any change in the employee’s status with the company (raises, vacations, promotions,
disciplinary actions, etc.)

- After these steps, the employee is legally hired.

V. Probation Period (Испытательный срок)

1. General Description
The job contract may stipulate a probationary period for up to three months. During this time, the employee may be
terminated with only three days written notice (приказ об увольнении). The notice must state the reasons for
dismissal and those reasons must be among those grounds for dismissal already approved in the labor code or job
contract. During this time an employee may quit with three days notice without giving reason.

2. Probation For Managers


Employees hired for top-level management positions may be subjected to a six-month probation period so as better
judge the employee’s work performance and moral.

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3. Probationary pay (Испытательная плата)
Pay during the probationary period is generally less, sometimes by as much as half.

Commentary: While the practice is illegal, it sometimes happens that employers will keep probationary employees on
staff and simply release them at the end of the probationary period for not meeting standards. This allows employers
to save on salaries and, since many workers do not know their rights or how to have their rights enforced, the
system is relatively safe.

Commentary: It is not at all uncommon (although illegal) for workers to agree to a one month probationary period
without a contract. Payment for this period is made under the table. Employees sometimes prefer this as they do
not want a one or two week employment period to appear in their work books as they fear this questionable blemish
may hinder their ability to find future employment.

VI. Work hours

1. Regular work hours (Нормативный рабочий день)


Unless their contract states otherwise, most employees may be required to work up to 40 hours a week for the
standard pay stipulated in the job contract.

2. Overtime (работать сверхурочно; оплата за сверхурочную работу)


Overtime is possible only with the employee’s written consent. The first two hours of overtime require time-and-half
pay (полуторной оплаты трудочаса). Double-time (двойная зарплата; двойной оплаты труда) must be paid
thereafter.

3. Holiday Pay (плата за работу в выходной день)


There are 12 official holidays in the Russian Federation. Time worked on these holidays must be paid double (in most
instances) and must be approved by the employee.

4. “Moonlighting" ("халтурить" - slang)


In Russia, earning extra money by doing extra jobs or work is an incredibly common practice and entails an
incredibly rich volume of jargon and slang.

A. "Work on the side" (работа по совместительству - standard Russian)


When an employee performs tasks or works hours outside of those indicated in their contracts as a
temporary event, this should be legally documented by an executive order from management (like
that issued when the employee was hired). The money earned from such an arrangement is
referred to in Russian slang as "шабашка," a word related to "башлать," which is slang for "to
pay." The act of working on the side is also often referred to with the phrase: "совмещать две
специальности" more specific cases can be referred to with the following example construction:
"совмещаешь в себе - программист и по совместительству переводчик" (where the employee is
primarily a programmer, but has been asked to perform translations).

B. Working a second job (подработать; подработать на стороне - standard Russian)


While it is of course possible to work two official jobs, secondary employment for most Russians is
kept under the table. This arrangement provides an incredible amount of taxi drivers (who drive
unmarked cabs), teachers, tutors, and handymen in Russia. Very often, each profession has its
own slang to refer to itself, for example taxi drivers will often use the verbs "подбомбить" and
"бомбить" to refer to what they do. Literally, these verbs mean, "to drop bombs from an
airplane." The origins of this usage are unclear.

VII. Compensation (компенсация)

1. Forms of Compensation (Формы возмещения понесенных расходов; Виды компенсации)


As a rule, Russia does not use checks, personal or business. Nearly all employees are paid in cash delivered in
envelopes. Certain work places, such as government jobs, now offer direct deposit (прямое зачисление в депозит
по платежной ведомости). This is particularly popular for foreign employees working for foreign companies whose
primary bank account is far away. A small and federally regulated part of an employee's salary may be paid in kind
(таким же образом; подобным образом).

2. Minimum Wage (минимальный размер оплаты труда)


Minimum Wage is set at a ridiculously low 720 RU per month (US $26) and due to rise in increments to a still low
1100 RU (US $40) by May 1, 2005. However, virtually nobody pays minimum wage. An unofficial standard minimum
for undocumented (illegal) blue-collar employees seems to be around 300 RU per day in Moscow. The UN has
calculated a “living wage” (прожиточный минимум) for Moscow at around 8000 RU per month.

www.sras.org 4 © 2002-2005 SRAS


3. Unofficial and Official Income (Легальные и нелегальные доходы)
To save on taxes, many companies will insert one figure into the work contract but have verbal, unofficial
agreements with their employees for a higher sum (sometimes 50-100% more). This arrangement is illegal, but
common and can only be enforced on an honor system. In slang, these incomes are referred to as "Белый доход и
черный доход."

4. Average Income (средний доход)


Officially, as of May, 2005, the average official wage for all of Russia was 6830 RU per month (240 US). The average
unofficial wage has been approximated, however, at around 350 US. Moscow is estimated to now have an average
income of 750 US.

5. Currency and Timing Restrictions


All salaries earned in Russia must be paid in rubles and paid in twice-a-month installments.

Commentary: These installments are not always equal. Because many businesses charge for their services by the
month, this is not always a convenient arrangement for the employer. To compensate for this, some employers will
pay a small sum (called an "аванс") in the middle of the month and a larger sum (referred to as simply "зарплата")
at the end.

Commentary: In many contracts, salary is stated in dollars or euros and a conversion applied each pay period using
the current exchange rate (курс). Thus, employees are relatively safe from inflation (which is still about four times
greater in Russia than it is the US). It also helps companies doing business internationally (and thus working in
dollars or euros) to keep their budgets tidier. This practice is perfectly legal, so long as the actual salary is paid in
rubles.

Commentary: Of course, many salaries come in currencies other than rubles. Since they are paid in cash, they can
be easily paid in one currency and recorded officially in other. Also, since according to some estimates Russia's black
market totals some 50% of its official economy, it would appear that Russia simply does not have enough rubles
in circulation to adequately fund its total economy. Russia is littered with exchanges (обмены) to handle all this
foreign currency (dollars and euros, mostly).

VIII. Taxes (налогы)

1. Personal Income Tax (Налог на доходы физических лиц - НДФЛ)


Russians pay a flat rate on their salaries of 13%.

2. Unified Social Tax (Единый социальный налог - ЕСН)


The Unified Social Tax is a regressive tax paid by employers on salaries. It ranges from 26-2% but since the
regression only begins for salaries of about 300,000 rubles, which is more than most Russians could ever dream of
receiving. 26% is thus a fairly flat rate across the board. Most social programs are funded by this tax and among
them, the Russian State Social Insurance Fund (Фонд социального страхования Российской Федерации), roughly
similar to America's Social Security Program.

Commentary: Avoiding the Unified Social Tax, which is fairly high, is probably the main reason that some employers
do not document their employees. This situation has improved since Russia lowered the tax and simplified its
structure, but the situation is still problematic.

IX. Vacation and Leave (отпуск)

1. Paid Vacation (оплачиваемый отпуск) (100% of regular pay)


All Russian employees are entitled to 28 paid vacation days per year. These days must be requested in advance and
approved by the employer by an official order. They need not be taken consecutively. If an employee holds two jobs,
the secondary job must grant paid vacation time concurrent with that granted by the primary job. The pay an
employee receives for this vacation is referred to as "отпускные" and is the employer's responsibility to pay.

2. Sick leave (отпуск по болезни) (60-100% of regular pay)


Sick leave is paid by the Russian State Social Insurance Fund but may not exceed 12,480 RU per month. Employees
are required to bring proof of illness (a note from the doctor) to their employers, but only after they are well enough
to return to work. An employee is not required to inform their employer that they require sick leave until this time.
An employee may not be fired during sick leave.

3. Maternity Leave (декретный отпуск) (60-100% of regular pay)


Maternity leave is paid as a percentage of regular wages by the Russian State Social Insurance Fund. Maternity leave
begins 70 days before the due date and extends to 70 days after the delivery date but can be extended in the event
of complications with the pregnancy.

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4. Child-care leave (Отпуск по уходу за ребёнком) (Sometimes paid)
A new mother or primary caregiver may request partially paid child-care leave. This is paid by the state (as
above) but must be honored by the employer. A mother has the right to unpaid leave and to reclaim her job until her
child is three years old.

Commentary: Child-care leave is obviously not an advantageous arrangement for the employer, as it can make a
female of child-bearing age a near permanent and non-present employee.

X. Disciplinary action (дисциплинарное взыскание)


Disciplinary action may occur only under set circumstances strictly defined in the Labor Code (such as drunkenness
on the job, failure to complete duties, etc.) and must be documented by an order signed by a council of at least three
employees.

XI. To Fire and to Quit (увольнять; уволиться с работы)

1. Quitting
Quitting employees must give two weeks written notice.

2. Firing
To fire an employee for misconduct or poor work performance, the employer must provide proof of disciplinary action
(sometimes proof of several instances, depending on the infraction – see above). There are still greater restrictions
on firing certain groups such as minors and union members; women in particular are almost impossible to fire under
legal auspices. Plus, in order to officially fire an employee, the employee must be given advance notice in writing and
the final termination must be documented and co-signed by the employee.

3. Severence
An employee who loses his/her job is entitled to receive a severance payment equal to two months wages, according
to Russian law.

Commentary: The labor code is generally weighted in favor of the employee in this instance and employers who wish
to operate "by the book" often complain that it is almost impossible to fire an employee once hired.

XII. Unemployment – безработица

1. How to Apply for Unemployment (Как оформлять получение пособия по безработице)


If the employee had worked 26 fulltime weeks before being discharged on honorable grounds or quitting “with good
reason,” he/she may also register with their local Employment Service (биржа труда) and apply for unemployment
benefits (пособие по безработице). For the first three months of unemployment, the unemployed receive 75% of
their former wages, then 60% for another four, and 45% for the rest of the year. For an additional year, or if the
applicant does meet the work requirements, the unemployed may receive benefits in the sum of 30% of the
minimum subsistence level (размер прожиточного минимума) for their region. If the unemployed does not meet the
work requirement, they are still entitled to this 30% payment.

2. Funding and Administration (финансирование и администрация)


The Ministry of Health Services and Social Development (Министерство здравоохранения и социального развития)
provides general supervision, control, and partial financing for the program. Regional employment services are
charged with administering and financing the program.

Commentary: 8.3 percent of the Russian population was officially unemployed as of 2005. However, only about 3%
of all Russians have registered with the unemployment office and only about 1% receives benefits. Low registration
is due, in part, to the fact that benefits are very low. They are calculated by the employee’s official wages, which are
often much lower than an employee’s actual wages. (See section III).

Commentary: The official minimum subsistence level varies across Russia. In Moscow, it is calculated at 4101 RU
per month and in Irkutsk, at 2590 RU per month. In Moscow, a thirty percent payment would thus be equal about
$43 US.

Commentary: The official unemployment figure is approximate at best since many employees are unofficially
employed and many more are on company record books as being employed when they have really been released or
have left.

XIII. Retirement (отставка; выходя на пенсии)


Standard retirement age in Russia is 60 for men and 55 for women. Those who have worked in certain dangerous
conditions can retire early and teachers, nurses and doctors may retire after a set number of years (25-30).

www.sras.org 6 © 2002-2005 SRAS


1. State Pension (Пенсионный Фонд Российской Федерации - ПФР)
State pension is calculated as 55% of the retiree’s former salary. Retired government employees and military
personnel qualify for bonuses. If a worker chooses to remain in the labor force and not draw a pension, that worker
can add 1% to the base of 55% for each extra year worked, to a maximum of 75%. Theoretically, pensions are to be
indexed for inflation each year, although the government in crises years has withheld this index and crises years
have, unfortunately, not been few. The average pension is currently 2500 RU (90 US).

Commentary: Again, the presence of official and unofficial pay poses a problem, because the pension is figured
based on official pay. (See section III)

Commentary: One thing that President Putin is credited with is reform of the pension system. Most pensioners who
own their apartments now claim that they have barely enough to feed and clothe themselves (which is an
improvement from the nineties), although medications are still a heavy burden.

2. Private Pension Funds (негосударственные пенсионные фонды)


A handful of large, highly successful companies have retirement programs for their workers, but these are very rare.
There are some private investment firms that are now helping private individuals create personal retirement funds.
These pension funds will likely continue to grow in importance and perhaps eventually eclipse the state fund as
problems with earnings reporting compound.

Commentary: To find out a bit more about the growth of these funds, see the following interview with Bernard
Suchar, one of the founding leaders in the field for Russia.

Special Thanks to:


Alexey Panteleev, Artem Babamuratov, Chet Bowling and especially
to the employees of Alinga Consulting Group, a business consulting
and audit firm with offices in Moscow and Boston, for their help in
compiling and verifying this information. ACG is a sister company
to SRAS.

www.sras.org 7 © 2002-2005 SRAS

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