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B2B: recent changes to Russia’s laws on leased labour

By Anna Berlina

On 5 May 2014, the president signed Federal Law No. 116-FZ on Amendments to Certain Legislative Acts of the Russian Federation regulating leased labour. The corresponding draft law went through its first reading in the State Duma as far back as May 2011, and many had thought it was dormant, but in 2014 the draft came back to life, passing second and third readings and receiving approval of the Federation Council in April, before being signed by the president in May.

The law adds articles to the Labor Code expressly prohibiting leased labour, which is defined as ‘work carried out by a worker at the instruction of his/her employer in the interests and under the direction and supervision of an individual or legal entity that is not the employer of the said worker’. However, the law permits the temporary supply of workers to another person under a staff supply agreement (albeit subject to a number of conditions).

First, only certain employers are able to supply their employees to other persons for ‘temporary use’. Only two categories of employers are permitted to supply staff: private employment agencies holding special accreditation or legal entities affiliated with the host company using the temporary staff (the regulation of temporary staff supplied by affiliates will be governed by a separate federal law that has yet to be drafted and adopted)…

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