Salaries in foreign currency to employees working abroad
Pepeliaev Group advises that on 18 March 2018 a Federal Law (“Law No. 44”)[1] came into effect allowing more options to employers for making payroll payments in foreign currency.
Allowing for salaries and other compensation amounts to be paid in foreign currency to employees of foreign diplomatic services, consulates, other Russian state authorities and institutions located abroad, the law now also allows for salaries (other compensation amounts) to be paid in foreign currency to Russian residents working abroad.
These changes to the currency legislation have been adopted in line with article 131 of the Russian Labour Code which allows the salary to be paid in foreign currency in cases stipulated by the currency legislation.[2]
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Before the said law was adopted, Russian residents working abroad had only been able to receive the salary from their employers (residents) in Russian roubles which created practical inconveniences for both employees and their employers. Now with Law No. 44 adopted this issue has been resolved. Please note that for companies to be able to pay salaries in foreign currency their employment agreements with the employees working abroad should contain special wording stipulated by Law No. 44. |
The law also lifts the restrictions in relation to salaries being paid to employees working in foreign branches of Russian companies from the accounts of such branches opened with foreign banks. A similar provision has been added with respect to payments and/or reimbursements of expenses relating to business trips outside Russia.
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Previously such transactions were allowed to be carried out without restrictions only with respect to the employees of foreign representative offices.
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What to think about and what to do
We recommend companies to review and amend (where necessary) their relevant employment agreements with the employees working in other countries.
Moreover, we recommend employers to decide whether it is prudent to revisit the way the payments to such employees are calculated (including, if this process is automated and performed using special software).
Help from your advisers
Pepeliaev Group's lawyers have vast experience in advising clients on all employment law matters and stand ready to provide the necessary legal support regarding any matters connected with the developments described above.