At the end of March, the new concept of “non-working days” appeared in labor law without prior notice. The Partner of Capital Legal Services Irina Onikienko comments about the rights, obligations and legal difficulties that employers now have in this connection. 

At the end of March, Russian lawyers were surprised to find out that at the behest of the president the new term “non-working” days has appeared in labor law. It also turned out that there is no longer any difference between a working and non-working employee: they both are entitled to receive equal wages.

Employers were caught in the crossfire: most companies and organizations were banned from operation under the threat of fines, while they must maintain wages for all employees. It was a little easier for those who managed to arrange remote work, but they too had troubles with employees who refused to work remotely. How and why do they need to pay employees who took “non-working” days literally as weekends?

1. Who will work during non-working days

Initially, only those companies and organizations that could not stop operating (due to continuous production, urgent work, etc.) and whose products were essential (production and sale of food products, antiseptics, drugs, etc.) were allowed to operate. Quietly, without announcing it, lucky companies that were able to arrange remote work, for example, consultants, continued operating. In the early days, many business owners and managers decided whether to take risks or not: was it ok to continue operation of an outlet with assortment that includes both basic necessities and other goods outside this category, and what their proportions should be. After a month, it became clear that if an organization falls within such an exception only in part, it also would be entitled to continue operating. For instance, if a stationery store sells disposable masks and antibacterial wipes, it can continue its usual operation.

2. How can companies cut costs during the pandemic?

When employers became obliged to maintain wages for all employees, inevitably, each of them faced the question of whether they could save their company/business, and at what cost. Wages is the biggest expense item for companies, and employees are as the most valuable resource, accordingly, there is a need to retain both the company and the employees. There are several ways to do this.

Perhaps the most optimal way is to amend the employment contracts so as to change the work time duration and remuneration by agreement with employees, since both parties are interested in retaining companies and jobs during such a difficult period.

During the time restrictions on office work and visits are in effect, signing such agreements may be impeded. If it is impossible to exchange originals or documents signed electronically, there is an option to use courier services or exchange scans of signed documents (although this can be difficult, since not everyone has a printer at home). By law, scans are no substitute for an original signature, but taking into account the restrictions that exist during the pandemic, even such an information exchange between the parties can be taken into account by authorized bodies and a court in the event of a dispute. Nevertheless, the HR manager must remember to sign the originals in the future.

Another option is to introduce a downtime regime for a structural unit or particular employees. If a company is allowed to continue operating on non-working days, but due to the pandemic, its financial performance is impaired and the workload of its employees is decreasing, for example, because of a drop in the orders, the company will be entitled to introduce a downtime regime and cut wage expenses to 2/3 of employees’ wage. Using this method is possible when any structural unit or the entire organization actually suspends its operation. Accordingly, there need to be ready to confirm that grounds for invoking downtime actually existed.

Moreover, unpaid leave during non-working days is not officially banned, but it is left to the discretion of the employees. There is no mechanism to force an employee take such a leave, but agreeing with loyal employees can always be possible.

Finally, amending the terms of an employment contract unilaterally is one of the few cases in labor law that allows an employer to change working conditions, such as wage or working time, without the employee’s consent. Although the reason for such amendments must be appropriately justified (apparently, the pandemic may be such a reason), and an employee must be warned about the amendments two months in advance. Therefore, this measure is effective only if an employee gives their consent to amend the conditions of their work, but if they don’t, in the current situation requiring a quick response, this measure will be useless.

3. Is it possible to force someone to work on non-working days?

Of course, it is prohibited, unless your organization falls within the exception to the general rule concerning non-working days and has completely switched to remote work. It is prohibited to request that an employee work in the office (at a production facility), if the organization does not fall within the exception to the rule concerning non-working days.

4. How are wages calculated for non-working days?

The President promised all employees to maintain their wages during non-working days. The current position of the Ministry of Labor of the Russian Federation is that an employee must be paid for non-working days the same as if they had worked these days in full. Moreover, the Ministry of Labor commented that the wage for non-working days means not only salary, but also bonus if such is provided by an employment contract or corporate regulations.

In respect of employees doing work for hire, as well as employees whose bonus part of the wage is calculated based on performance indicators, a regular wage must be paid, even if the work is not actually performed. At the same time, it is proposed to pay equal wages to employees, regardless of whether they work or not.

Having read such explanations, many managers experience despair: how can it be that during the crisis the company must pay employees more than during non-crisis times, after all, usually bonuses and variable parts of wages directly depend on employee performance.

If an organization is unable to continue paying wages in the same amount due to an objective drop in income, it should be ready to prove such inability for each specific period.

5. What if an employee’s vacation falls on non-working days?

If an employee is on vacation from March 30 to May 11, then their vacation will not be extended by these days. At the employee’s request, the employer has the right to provide a vacation for this period. Transferring vacations previously planned for this period shall be made by mutual agreement of the employer and employee.

6. How to organize document exchange between an employee and an employer?

Everyone knows how important it is not only to adopt a lawful decision regarding employees, but also to properly document it. Given the current circumstances, it is possible to enter into and terminate an employment contract during the non-working days remotely, and using an enhanced encrypted and certified digital signature is recommended, if possible.

An alternative method for documents requiring signatures of both parties may be through a courier service. In extreme cases, the parties can also exchange scans of signed agreements. Scans do not usually replace original documents, but can be used under current conditions.

Often, an employer only needs to notify an employee, and such an appropriate notification may be through: sending a notification by mail with a description of the contents and a return receipt; or corporate email notification.

7. Is staff reduction allowed during the pandemic?

If a company is not included in the list of companies that continue operating, during the non-working days employees cannot be dismissed against their will. Accordingly, staff reductions are also unlawful.

However, we assume that such a ban could further on be mitigated. For example, if during remote work an employer and employee clearly agreed on the scope of work to be performed and the manner in which the employee reports on the work done, then dismissing the employee due to repeated failure to fulfill such obligations, in our opinion, should not be recognized unlawful.

8. What assistance can the state provide to an employer?

Pursuant to instructions of the Russian President, as well as based on the statement by the Russian Prime Minister, representatives of small and medium-sized businesses of affected industries will be able to receive free budget funds for paying wages for April and May

To qualify for this assistance an employer must retain 90% of its employees, but the assistance itself will be calculated at the rate of RUB 12,130 per employee per month in April and May. To receive the funds, an employer needs to apply to the Federal Tax Service (expected to be available starting from May 1). The business will receive the first payments starting from May 18.

The Prime Minister also noted that companies could use these funds not only to pay wages as such, but also to solve the most critical tasks of the organization.

9. Can an employee file a claim against the employer and in what timeframes?

If an employee considers their labor rights violated, they are entitled to file a claim with the prosecutor’s office, labor inspectorate or court within three months from the date the employee found out or should have found out about such violation, and one year if it concerns disputes about non-payment or incomplete payment of their wages. As a rule, the court denies a claim if the timeframes are missed, but due to COVID-19, the situation will apparently be different: the timeframes will be restored by a court if an employee proves that, for instance, due to self-isolation, they were unable to go to court.

10. What liability can an employer be subjected to?

The Ministry of Labor stated that it is planning to monitor unlawful actions of employers during the pandemic. This will not be difficult, given the new requirement for organizations that continue to operate to provide the Ministry of Labor with information on employees transferred to remote work, on reducing working hours, on employees who endured downtime, on employees on unpaid leave, as well as on employees dismissed or expected to be dismissed due to restrictive measures introduced.

Forcing employees to continue working on non-working days, non-payment of wages and other violations of labor rights of employees can be qualified in accordance with Article 5.27 of the Russian Code of Administrative Offenses. The penalty for this offense is a fine of from 30,000 to 50,000 rubles for each offense revealed.

If actions of an employer who has not ceased operating due to sanitary and epidemiological restrictions cause a mass infection or death of employees or other persons, this may serve as a ground for holding officials criminally liable pursuant to Article 236 of the Russian Criminal Code.

You can read the article at Forbes in Russian here.