Russia: New Protections for Back Wages Owed by Insolvent Employers

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By Sergei Blagov

July 7—Wages owed employees of insolvent businesses will have new protections under Federal Law No. 186-FZ signed by President Vladimir Putin June 29, the presidential press service reported July 1, the day the law became effective.

The new law:

• requires CEOs of insolvent businesses to file for bankruptcy if their companies have owed back salaries or employment termination payments (ETP) to employees for more than three months,

• allows employees owed back wages and ETPs to petition arbitration courts to seek bankruptcy of their former employers and

• requires insolvent employers to first make payments of back wages and ETPs of 30,000 rubles ($537) per employee per month and only afterwards make other back payments, including payments for intellectual property rights.

 

To contact the reporter on this story: Sergei Blagov in Moscow at correspondents@bna.com

To contact the editor responsible for this story: Rick Vollmar at rvollmar@bna.com

Full text of the press service statement is available at http://www.kremlin.ru/acts/news/49848, Federal Law No. 186-FZ at http://static.kremlin.ru/media/events/files/ru/Fpjc0NKYRNM766n6mcnz7v6zRbr4ZyAU.pdf, both in Russian.

For more information on Russian HR law and regulation, see the Russia primer.