Harsher criminal liability for non-payment of salaries, allowances, etc.

25.01.2011

Legal Update No. 214.

Goltsblat BLP advises that Federal Law of 23 December 2010 No. 382-FZ “On Amendments to Article 1451 of the Criminal Code of the Russian Federation” (the Law) came into effect on 7 January 2011.

The Law has introduced harsher criminal liability for non-payment of salaries, pension, stipends, allowances and other payments established by law.

Liability now covers their partial non-payment (equal to at least half the sum due) for over three months for selfish or personal reasons. For this, the Law envisages a fine of up to 120 thousand roubles or the equivalent of the guilty party’s salary or other income for one year, or deprivation of the right to hold a particular position or engage in particular activities for one year, or imprisonment for up to one year.

Harsher criminal liability has also been introduced for failure to pay the full amount of such sums for over two months and liability in general for payment for over two months of a salary less than the minimum wage established by federal law (currently 4330 roubles). Such crimes entail a fine of from 100 thousand to 500 thousand roubles or the equivalent of the guilty party’s salary or other income for three years or imprisonment for three years, with or without deprivation of the right to hold specific positions or engage in specific activities for three years.

There has been an increase in the range of persons that can be held liable for all the crimes specified in the given article: in addition to the CEO of an organisation and individual employer, this now also applies to the head of a subsidiary, representative office or other detached structural subdivision of an organisation.

With respect to interpretation of “the minimum wage established by federal law”, please note that article 133.1 of the Labour Code of the Russian Federation allows a regional agreement to set the minimum wage in a constituent entity of the Russian Federation.

For instance, the Moscow Agreement of 2 December 2010 sets a minimum wage from 1 January 2011 of 10400 roubles and from 1 September 2011 of 10900 roubles. The Agreement applies to all organisations in Moscow apart from those that duly submit a reasoned, written refusal to accede to this.

It is quite possible that some entities with a vested interest will attempt to present the minimum wage set by federal law as a higher regional minimum wage.

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