10.07.2015 — FMS Can Prohibit Employment of Foreign Citizens

According to the Regulation adopted by the Federal Migration Service (hereinafter, the FMS) that entered into force on 21 June 2015, the FMS is now entitled to prohibit employing foreign workers for two years, if a company violates the migration laws or its obligations under a contract with a foreign highly qualified specialist. The Regulation does not indicate the particular obligations companies shall not violate. There are two obligations directly envisaged in Art. 13.2 of the Federal Law “On the Status of Foreign Citizens Within the Territory of the Russian Federation”:

  • Payment of a salary in the amount prescribed in laws;

  • Obtaining medical insurance for employees.

Highly qualified specialists usually obtain work permits under a summary procedure, and no quotas are set for them. However, according to Art. 13.2(1)(3) of the Federal Law “On the Status of Foreign Citizens Within the Territory of the Russian Federation”, the employer, as a general rule, shall pay them salary in the amount of not less than RUB 2,000,000 annually. Many employers have used this procedure for employing foreign citizens, although they did not pay salaries in the stipulated amount. Presumably, the FMS intends to prevent this practice and has imposed an enhanced punishment to that end.

Currently, the FMS Regulation is unclear as to whether the enhanced punishment shall apply only to the obligation to pay salary, or to other duties of employers as well, such as, for example, the failure to obtain medical insurance. 

Please also note, that the FMS is entitled to commence the procedure of holding employers liable based on the information received from any legal entity or individual. After that, the FMS officials shall issue a decision based on the analysis of such information. Like any other decision of an administrative body, it can be reviewed by a higher authority or a court; however, appeal procedures usually take a lot of time and require additional costs.

Hopefully, a clarification is issued soon to enable interpretation of these vague provisions. The new regulation affects all companies employing foreign citizens including representative offices and branches of foreign companies, operating within the territory of Russia and employing highly qualified specialists.

Nevertheless, certain positive amendments have been introduced into the migration law. It used to be obligatory to provide the FMS with information on unpaid vacations of highly qualified specialists and the termination of their labor contracts. Starting from the 1st of January 2015, this obligation has been abolished.

These amendments are aimed at decreasing the administrative burden of employers.