The employment record is one of the most important HR documents in Russia containing the entire employment history of an individual (incl. positions, dates of hiring and termination, as well as any disciplinary sanctions). According to the Labor Code of the Russian Federation, an employer is obliged to maintain the employment record for every employee employed for more than 5 days. The employment records are held by the employer during the employment. Upon termination of the labor contract, the employment record must be handed over to the employee on the last working day.

On December 16, 2019 Russian President signed two laws passed by the Russian parliament aimed at a gradual transition to electronic employment records.

Federal Law 439-FZ introduces the necessary changes into the Labor Code of the Russian Federation by adding Article 66.1 Information of the Employee’s Employment History from January 1, 2020, which provides the basis for maintaining the employment history for the employees in electronic form.

By June 30, 2020, all employers must notify the employees of the law changes related to the electronic employment records. By December 31, 2020, each employee must decide and notify the employer whether he/she wants to continue using a hard copy employment record or not. In the former case, the employer will have to duplicate the information in both the hard copy and electronic versions of the employment record.

An exception is made for the employees who begin their career after January 1, 2021 – information on their employment history will be recorded only in electronic form.

If an employee has not informed the employer about his/her choice by December 31, 2020, the employer will be obliged to continue to maintain a hard copy employment record. An application for a full transition to an electronic employment record can be submitted later at any time. In this case, the original hard copy employment record will be handed over to the employee.

When starting at a new job, the employee will have to present the hard copy employment record only if it exists. If the employee has previously applied for a transition to an electronic employment record, an excerpt from it will have to be provided. The excerpt can be obtained in hard copy either from the last employer or at any office of the Pension Fund of the Russian Federation, at multifunctional centers, or on the Gosuslugi Public Services Portal (https://www.gosuslugi.ru/).

All information about the employment history of the employees will be kept by the Pension Fund. To record information on the employees’ employment history for subsequent transfer to the Pension Fund Federal Law No. 436-FZ, also signed by the President on December 16, 2019, introduces SZV-TD, a new mandatory report for all employers.

From January 1, 2020 the SZV-TD report will have to be submitted to the Pension Fund on a monthly basis no later than on the 15th of the month following the reporting month. If there are no changes in the information reflected in the SZV-TD report during the month, the report for that month is not required. If there are no changes throughout 2020, the first report as of January 1, 2020 must be submitted by February 15, 2021.

Starting from January 1, 2021, the SZV-TD report must be submitted no later than the working day following the day of a new hiring or termination.

If the staff consists of more than 25 people, the SZV-TD report may be submitted only in electronic form.

Draft Law No. 748758-7 amending the Code of Administrative Offences the Russian Federation was also adopted in the first reading on December 3. Until the final adoption of the law, we assume that violating the deadlines for submission of the above-mentioned information or failure to submit it will be penalized under Article 5.27 of the Code of Administrative Offences, which specifies a fine of 30,000 to 50,000 rubles for legal entities for a violation of the labor laws.

 

KBK Accounting Recommendations:

We recommend that you analyze all the transition steps to electronic employment records in advance, including:

  • Familiarizing yourself with the introduced changes and new obligations of the employers, e.g. obligation to provide information on an employee’s employment upon the employee’s request;
  • Adopting or adjusting the local regulations and agreements (if necessary) to comply with the updated legislation and reflect the use of electronic employment records;
  • Checking the technical readiness for submitting the SZV-TD report electronically;
  • Notifying each employee in writing about the changes in labor legislation by June 30, 2020.

We will be happy to assist you in the transition to electronic employment records, including the development of the necessary internal documentation.

/ December 19, 2019