Receiving salary through another bank: new timeframes for employees, and employers’ liability

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Pepeliaev Group advises that laws have been passed which increase the period for employees to notify employers about receiving salary through another bank and which specify administrative liability for impeding employees’ rights when the latter choose a credit institution for their salary to be transferred to.

On 6 August 2019, Federal Law No. 231-FZ “On amending article 136 of the Labour Code of the Russian Federation” dated 26 July 2019 and Federal Law No. 221-FZ “On amending article 5.27 of the Russian Code of Administrative Offences” dated 26 July 2019 come into effect.

The amendment made to article 136 of the Labour Code increases, from 5 to 15 calendar days, the period during which an employee is to notify the employer of a change in the banking details for the salary to be transferred. The increased period is needed for employers to have enough time to process such applications of their employees and, if necessary, agree with credit institutions the conditions for remitting salary.

Part 6 of article 5.27 of the Code of Administrative Offences, which sets out the liability for offences in relation to the payment of salary, is updated with a new material element: the employer impeding the employees’ right to choose a bank for their salary. The amount of the fine is similar to that for other payroll-related offences:

  • for an officer of a company - between RUB 10,000 and RUB 20,000;
  • for an entity - between RUB 30,000 and RUB 50,000.

Комментарий ПГThe amendments to be enacted are not a new development in employment law. Employees were offered the right to receive salary through another bank as early as in 2014. Also, before the amendments in question enter into force, employers could have been held administratively liable for a refusal to change a payroll bank further to an application filed by the relevant employee. However, the amendments to be introduced and the ancillary advertising of banks may lead to an increased number of employees wishing to use their right to receive salary through another bank.

What to think about and what to do

Companies should take into account the upcoming changes and consider what internal procedures they will apply when receiving applications from employees to receive salary through another bank. If companies are still interested in retaining the same payroll bank, we recommend elaborating possible arguments for the employees to retain the same bank currently used for payroll by the company (e.g. free servicing of salary bank cards, the bank granting benefits in relation to banking products to clients who receive their salary through such bank, etc.).

Help from your adviser

Pepeliaev Group's experts are ready to provide the legal support needed on all matters relating to the potential new developments.

The firm's professionals have extensive experience of advising on all issues of employment law and migration law.

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