Еxpert methodologist BDO Unicon Outsourcing
On December 16, 2019, the law on maintaining electronic books (Article 2 of Federal Law No. 439-FZ On Amending the Labor Code of the Russian Federation as regards compiling employment data in electronic form dated December 16, 2019 (hereinafter referred to as the “Law No. 439-FZ”) was adopted.
The whole next year will be a transitional period during which employers and employees must prepare for new realities. Below we explain how employers can switch to the new format of work.
1. Designate an employee within the team to be responsible for providing the Pension Fund with information about the labor activities of your employees, generating documents in electronic form therefor.
2. Information on the employees’ labor activities will be generated in the database of the Pension Fund of the Russian Federation. Check the information system in which the personnel records of your company are kept. If reports to the Pension Fund of the Russian Federation are generated in these databases, then the names of positions and structural units therein must exactly correspond to those in employment contracts and hiring orders. The names of positions and structural units may not have any Latin letters.
This work must start in January 2020, since the new SZV-TD report will have to be submitted no later than February 15, 2020. When hiring employees in January 2020, transferring to another job or dismissing them, you need to make sure that the name of the position and/or structural unit matches the data indicated in the employee’s employment contract and hiring order so that incorrect information is not automatically unloaded into the report data.
Check if the order numbers in the 1C database correspond to those in the original orders on paper.
If the surname of the employee according to the passport contains letter “Ё”, while in SNILS (Individual Insurance Account Number) (and in the information base respectively) his/her surname is written with letter “E”, then such discrepancy needs to be corrected. Otherwise, the individual account in the Pension Fund of the Russian Federation and the employee’s employment record book along with the passport will result to be issued for two different people.
If the company has preferential positions (for example, providing for early pension), then their names must strictly correspond to those in qualification manuals/professional standards.
3. Remember to register foreign employees – highly qualified specialists in the system of the Pension Fund of the Russian Federation. As of today, such foreign employees are not subject to insurance with the Pension Fund of the Russian Federation in order to provide old-age labor pensions, but their employment record books are maintained, and they also have the right of option.
4. Make records of hiring in January 2020 (and further), as well as transfers and dismissals in a timely manner. It is now hardly possible to hire an employee retroactively (ex post facto). Starting 2021, this information will have to be transmitted the day after the corresponding event.
5. Prepare notices for employees about changes in the labor legislation regarding the maintenance of electronic employment record books. Explain to them their rights, explain that they may have their employment record books further maintained in paper form. The law requires the notices to be in writing. The law does not require to acknowledge the notice service by signature. However, it is safer to familiarize each employee with the notice against his/her signature. The notices can be made for each employee individually, or you can compose a single information letter and familiarize your employees with it per the list.
6. Start, as part of the audit of local regulations, preparing amendments to the Internal Labor Regulations. In the paragraphs where the employment record book is mentioned, it is necessary to add to the appropriate sentence “... and information on labor activities.” As a rule, employment record books in Internal Labor Regulations are discussed in the sections “Hiring”, “Transfer to Another Job”, “Dismissal”, “Employee Bonuses and Disciplinary Sanctions”. Define the procedure for electronic interaction between the employee and the employer (if necessary) in the Internal Labor Regulations. The legislative body provided employers with the opportunity to make changes to their Internal Labor Regulations within 2020. Therefore, there’s no need to rush and do it at the beginning of the year.
7. Make a decision to obtain an enhanced certified digital signature. If you write in your Internal Labor Regulations that information on labor activities may be provided to employees in the form of an electronic document, then the employer must sign such a document with enhanced certified digital signature.
8. Serve the notices to employees by June 30, 2020. The legislative body has established such period for the employer to have time to understand all the intricacies associated with electronic employment record books, to provide employees with verified reliable information about the changes. Therefore, there is no need to rush to serve the notices to employees.
9. After receiving notices, employees must make an informed decision whether to keep up or abolish their paper employment record books. They must make such decision from July 1 to December 31, 2020. Employees must notify the employer of their decision in any form at their choice. It is recommended that the employer prepares a sample application for its employees in advance. The employer will have to notify the Pension Fund in the SZV-TD report of the application submitted by the employee. If an employee decides to keep up the paper employment record book, such employee may abolish it in the future. While if the employee chooses an electronic employment record book, then such employee will not be able to return to the paper version.
In January 2021, paper employment record books will need to be handed over to the employees who have applied for abolishment thereof.
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