Employers alerted on potential penalties for illegally withholding employee benefit contributions
A significant update to the Russian Labor Code, signed by President Vladimir Putin on June 7, aims to protect employees from unreasonable bonus reduction in case of disciplinary action. The new regulations, set to come into force on September 1, 20XX, establish a clear limit for the reduction of bonuses by employers.
Key points of these regulations include:
- Employers are restricted to reducing bonuses only up to a maximum of 20% relative to the employee's salary.
- Exceeding this limit can result in administrative penalties (a fine of 50,000 rubles).
- These amendments are part of efforts to regulate bonus payments in employment contracts and safeguard some minimum level of bonus compensation.
The new law requires employers to thoroughly regulate bonus systems in employment contracts, agreements, and local regulatory acts. There are many grounds for deprivation of bonuses, including the presence of a disciplinary penalty during the bonus period, dismissal during the bonus period, incomplete work during the bonus period, failure to meet the plan or task, receiving a complaint from a client, and missing deadlines.
Deprivation of bonuses does not constitute a fine or disciplinary penalty. However, it can be a form of punishment for disciplinary offenses such as tardiness or violating the dress code, but only if established in the organization's regulatory act. The reduction of bonuses for employees with disciplinary penalties is now limited to the month when the disciplinary offense occurred.
For individuals engaging in entrepreneurial activity without forming a legal entity, the fine for illegal bonus deprivation ranges from 1,000 to 5,000 rubles. For legal entities, the fine for illegal bonus deprivation ranges from 30,000 to 50,000 rubles. An employer can be held administratively responsible for unlawfully depriving an employee of a bonus, according to article 5.27 of the CoA RF.
Employees who believe they were unlawfully deprived of a bonus can appeal the decision by contacting the employer or filing a complaint with the labor inspectorate. The new law aims to provide a fair and transparent system for bonus reduction, ensuring that employees receive a reasonable level of bonus compensation.
[1] These details are based on the available recent sources and may be subject to further clarification or changes as the new regulations are implemented.
- The new regulations in the Russian Labor Code, effective from September 1, 20XX, establish limitations for employers in the finance sector when reducing bonuses, with a maximum limit of 20% relative to an employee's salary to avoid administrative penalties.
- In the context of business, the new law requires employers to thoroughly regulate their bonus systems, ensuring a fair and transparent system for bonus reduction, with the aim of providing a reasonable level of bonus compensation to employees.
