Adecco Russia Q&A Handbook

Property of Adecco Group Russia. Not for distribution.1

The Legal Aspects of the Federal Law regulating the employee leasing in Russia

Q&A

"Should we be afraid of the changes? Time to do business with new opportunities!"

Russia, Moscow2014

2Property of Adecco Group Russia. Not for distribution.

As a company №1 in the World, Adecco Group is always one step forward, as we care about our clients. It is in our highest interest to be updated with the trends of the market and give the best solutions to you. We always follow the latest news regarding the changes in the Federal Law regulating the employee leasing in Russia. We have reviewed legal practice on this case and we are pleased to offer you a couple of recommendations that might help to avoid difficulties with the law even before January 1, 2016, when the Federal Law as of 05.05.2014 N 116-FZ «On Amendments to Certain Legislative Acts of the Russian Federation» regulated employee leasing in Russia, comes into force.

Adecco Group gives the positive assessment to the adoption of the new law. We are sure that it will contribute to the brushing up of the market from dishonest and unprofessional companies providing employee with breach of law. It will also lead to the improvement of working conditions for employees already engaged in employee leasing.

We would be glad if this material reaches your interest and answers to your concerns.

Best regards,

Francisco RibeiroCEO of Adecco Group Russia

Francisco RibeiroCEO of Adecco Group Russia


Q. What is the concept of the new law? A. The new law is focused on regulating of labour activity of employees

who are sent to individuals or legal entities under the temporary contracts on staff providing.

Q. Does it mean that the staff providing under the temporary contracts and outstaffing will be forbidden?

A. It doesn’t mean that the staff providing under the temporary or outstaffing contracts will stop. All the business will continue but with some new rules.

Q. What is the definition of Staff Providing? A. Staff providing activity - means sending of an employee by an

employer (hereinafter referred to as the Sending Party) to an individual or legal entity (hereinafter referred to as the Host Party) who is not the employer of the employee to carry out work activity determined by his/her labor contract on behalf of and under the management and control of the Host Party.

Q. Who has the right to execute activity on staff providing? A. According to the new law, only two categories of legal entities will have

the right to execute activity on staff providing, they are:• Private employment (recruiting) agencies - legal entities registered

in Russia. Such agencies are obliged to go through the special accreditation procedure;

• Other legal entities, including foreign legal entities and their affiliates.

Q. What is the criteria for the Private Employement Agencies to execute their activities?

A. Private employment agencies will have the right to execute activity on staff providing only within the following cases:

> Employees under their consent are sent to an individual or legal entity who is not their employer by organization which has the right to execute activity on staff providing;

> Employment contract with an employee sent to an individual or legal entity who is not his/ her employer, includes terms and conditions on execution of work activity on individual or legal entity;


> Employees are sent for temporary work for:• individual, who is not an entrepreneur, in order to provide private

services or assistance in householding;• individual entrepreneur or legal entity for temporary replacement of

absent employees. Work places of the absent employees have to be retained;

• individual entrepreneur or legal entity for temporary work (up to 9 months) connected with expansion of production or increase of sales volume.

In case an employee is sent for temporary work on a Host Party, an employee and an employer have to conclude additional agreement with information about the Host Party, place and date of the contract conclusion, number and period of validity of the staff providing agreement.

Q. What is the maximum length of contract limitation of the agency worker?

A. The limitation of the maximum length of contract is up to 9 month (For projects only, i. e. for increase of business. No that restriction for expats and for replacement of temporarily absent employees).

Q. Is there any exclusion? A. Yes, for example, students of the full-time courses, single mothers,

large families (many kids) and persons, released from jail can be the non-limit agency workers.

Q. Do agencies need to receive the accreditation license? A. Yes, all agencies should receive the accreditation.

Q. What requirements the Private Employment Agencies must meet to receive the license?A. The PEA should meet the following requirements:• First of all, the charter capital of the legal entity must be not less than

1.000.000 RUR;• No debts to the budget and off-budget funds;• The head of the private employment agency must have higher

education as well as work experience in the field of employment or employment assistance in the Russia for at least 2 years during the last 3 years;


• The head of a private employment agency must not have previous convictions of committing crimes against the person or economic crimes.

Q. In which cases the staff providing activity is not allowed?A. Staff providing activity is not allowed in the following cases:• replacement of striking workers of the Host Party;• work in case of downtime (temporary delay of work of the Host

Party),bankruptcy of the Host Party, the introduction by the Host party of part-time work in order to keep workplaces at threat of mass dismissals of workers;

• replacement of workers of the Host Party, refusing to work in the cases statutory by the labor legislation, as well as replacement of workers temporarily stopped their work due to salary delay for a period exceeding 15 days;

• execution of appropriate types of works at dangerous industrial object (EIO) of I and II risk classes;

• work implementation at the workplace with harmful working conditions of III and IV risk classes or other dangerous working conditions;

• replacement of certain positions in accordance with the staff schedule of the Host Party, if the presence of such employees is the condition of receiving license or other permit for activity implementation and the condition of membership in a self-regulatory organization or receiving a certificate permitting activity implementation by a self-regulatory organization;

• work as crew members of ships and mixed vessels (river - sea).

Q. Will the work on a Host Party enter into the employement history of the employee?

A. Yes, it will be Information about the work on a Host Party shall be entered into the work-book of the employee.

Q. Is it necessary to take into account the opinion of the elected body of the primary trade union of the organization while making a decision on hiring employees?

A. If the number of workers hired under the staff providing contracts to fulfill the temporary work (up to 9 months) connected with expansion of production or increase of sales volume, exceeds 10 % of the average


number of employees, the Host Party will have to take into account the opinion of the elected body of the primary trade union of the organization while making a decision on hiring employees.

AQ. Are there any time frames to receive the opinion?A. Yes, the opinion should be received within 5 working days.

Q. Is it stipulated the insurance premiums under the staff providing contracts?

A. Insurers who temporarily sent their employees under the staff providing contracts shall pay insurance premiums in accordance with tariffs for main economic activity of the Host Party, as well as extra charges and discounts to insurance tariff determined by special assessment of working conditions in the workplaces, where employees actually temporary work.

Q. What are the payment conditions for the temporary staff? A. Payment conditions under an employment contract with an employee,

sent to work for the Host Party, shall not be worse than the payment conditions of workers of the Host Party, performing the same work functions and having the same qualifications.

Q. Shall the employment contract contain any point regarding the conditions of work execution?

A. Yes, the contract concluded between a PEA and an employee sent for temporary work, shall include the condition of his work execution under the management and control of an individual or legal entity who is not the employer of the employee.

Q. In which case the Host party bears the subsidiary responsibility? A. The Host Party takes the full subsidiary responsibility for the following

issues: • salary payments and other compensations• for violation of terms of salary’s payment• vacation payments• discharge or other payments.


What is the Solution?It is our main goal to allow you to focus on your core activities while we take care of the rest.

Adecco will help you to manage the flexibility and competitiveness of the latest market demands.

We are presenting our new approach - Flexible Workforce, that easily converts your fixed costs to variable ones.

This is a perfect solution that adapts to the most claimed needs, whether is a short period of time or long - term project with length of more than 1 year.


Q. What are the Flexible Workforce models?

A. Short Term - Temporary Staffing Model, that goes in line with the law - when the contract shall not be longer than 9 months and the justification for the particular project should be provided.

B. On-Demand Project - BPO Model - Business Process Outsourcing, where Adecco takes full responsibility for contract staffing and results, i.e. all outcomes of service and client control the service.

C. Long Term Project - KPO Model - Knowledge Process Outsourcing, Adecco takes full responsibility for contract staffing and organization, Client has access to the operational control and productivity under Adecco management.

Q. What is the Flexible Workforce Solution?

• Labor Flexibility;• Head-Count and Salary Limitations;• Cost Savings;• Flexible cost instead of fixed;• Increase of productivity;• Access to experimented and technical HR;• Focus on core business;• Results oriented (SLA's and BBC's).

At

Bt

Ct

>

>High

Low

Up to 9 monthsFOCUS IN THESHORT TERM

FOCUS IN THE ON-DEMAND PROJECT

FOCUS IN THELONG TERM

Seasonality

No Restrictions


Q. What is the difference between Flexible Workforce Model of Adecco?• • • • • • • • • • • • • • • • • • • • • • • • • • Q. What should I know about Outsourcing?

A. It’s a service, provided to an entity by a third agent, whose purpose is to act as a perfect link, between those who use and those who serve. Means delegate the operational responsibility for a task or a set of tasks to a partner in is execution and performance inside or outside of the womb of the company itself. B. This Partner is responsible for fulfilling certain functions in the client organization, based on a contract that may involve hiring dimensions defining a level of service, KPI (Key Performing Indicators), BBC (Business Benefit Contract) or SLA (Service Level Agreement).

BPOKPO

Type of Contract Staff Providing

is limited to the terms of the contract

1 Day, 1 month up to 9 months



Service Service

no limit

Adecco

Adecco

Adecco

Adecco

AdeccoAdecco

no limit

Client

Client

Client

Client

Client

AdeccoClient

AdeccoClient

AdeccoClient

AdeccoClient

Period of service

Salary Definition

Social Benefits

Labour ContractLimitation

Management

Responsiblefor productivity

SubsidiaryResponsibility

TemporaryStaffing


C. A service contract between Adecco and Client is signed with appendixes to specify all requirements of service and measure of the parties’ responsibility.

Q. What is the difference between Outsourcing Models?

Adecco Outsourcing Models

Q. What should I remember about the Temporary Staffing Model? A. Making the resume of the first part of our Q&A there are some

provisions applicable to all models:

• Justification of increasing the workforce;• Limitation of maximum length of assignment to 9 months;• Introduction of a quota on the use of agency work (10% if there is a

Trade Union);• Equal pay ( agency workers earn the same as Client FTEs);• Subsidiary Responsibility - the client bears subsidiary responsibility for

the warranties of the agency ensuing from the labor relations with the employees.

BPO Model

Advantages: Advantages:

• Center in the service; • KPI + SLA (Penalties and

Rewards); • Focus in productivity;• Increase the cost efficiency;

• Cost Savings;• Flexible costs instead of fix; • Increase of productivity;• Access to experimented and

technical HR; • Focus on core business.

• Possibility to client have access the productivity;

• Labour Contract Flexibility;• Cost Savings;• Response to budgets and Head

Count Limitations;• Access to Technologies;

• Center in Human Resources;• KPI’s;• Focus in Process;• Increase the operational

efficiency;

KPO Model


Do you have questions regarding changes in the law?Ask Adecco!

> [email protected]

Connect with Adecco Russia to find the best solution for your business!

> Moscow, Russia, 115054 2/3, Paveletskaya sq.

Telephone +7 495 622 71 38Fax +7 495 622 71 39


Property of Adecco Group Russia. Not for distribution.Russia, Moscow

2014

Recruiting & HR

Adecco Russia Q&A Handbook