Russia : Employers must increase the wages of employees from February 1. As the Ministry of Labor recalled, enterprises are obliged to increase the wages of employees in accordance with the growth in consumer prices – this is stated in Article 134 of the Labor Code of the Russian Federation. In addition, the frequency and procedure for increasing the income of personnel is fixed in labor and collective agreements, as well as in local regulations of the organization. The state labor inspectorate monitors the timely indexation of salaries – violations lead to fines for employers. However, judging by the latest opinion polls, a real increase is planned, at best, by a third of employers.
When it comes to a massive increase in salaries, most often it concerns state employees. Employed in the private sector are less frequently mentioned. However, for them, the legislation also provides for a periodic increase in wages – the employer has no right to refuse this and is obliged to raise wages to the level of inflation.
So from February 1, 2022, employers are required to index the wages of employees. Rosstat published the indexation of wages – 8.39%. According to the law, the indexation of employees’ salaries is a duty, not a whim of the employer. The process of increasing the income of the staff is fixed in the labor and collective agreements. Rostrud inspectors during inspections have the right to request from the employer documents on salary indexation – in accordance with the Labor Code.
If such documents are not available, the employer will be held liable. A fine also threatens if there are indexation documents, but in fact the employer does not increase wages.
If all companies and entrepreneurs follow the law, salaries in 2022 will have to increase by about 8%. But in fact, the situation is more complicated – some private structures raise them quarterly (and in fact they have already partially “caught up” with the price increase in 2021), others will raise them only by the end of the year.
The problem is that in the private sector, each employer plans salary increases individually – based on revenue and profit forecasts, market conditions, free cash flow and many other factors. No one reports on this centrally, so only the results of surveys and independent studies show the real picture. And they give mixed results.
Thus, according to a recent PwC survey, almost 64% of surveyed companies are ready to index salaries in 2022 for most of their employees, about 22% – only for a number of categories of workers. But the statistics of the Center for Strategic Research (CSR) on 10 thousand companies from different segments of small and medium-sized businesses are less optimistic. Only 33% of companies intend to raise salaries in 2022, the average increase will be about 11%; 44% of the surveyed companies will leave salaries unchanged, and 4% of companies intend to even reduce salaries.
To comment on the prospects for the February salary increase, “MK” asked the experts.
Natalia MILCHAKOVA, Deputy Head of IAC “Alpari”:
“Of course, the salaries of public sector employees will be indexed. But in the private sector, things are not so clear. The fact is that, unlike the indexation of salaries for state employees, the Labor Code of the Russian Federation and Russian laws do not establish a specific procedure or mechanism for indexing salaries for private sector employees, and thus our legislation makes a certain “curtsy” towards employers, and not employees, which the issue of wage indexation concerns in the first place.
That is, employers have the right to index simply in the form of wage increases or bonus payments. True, in the latter case, employers are required to record in a corporate position or other document on bonuses that the payment of bonuses is a form of indexation (increase in purchasing power) of employees’ income, rather than a form of reward for achievement at work. And if the enterprise has a trade union body or, for example, a collective agreement, employees through these institutions have the right to ensure that the employer does not mix bonuses with mandatory wage indexation.
And in those private firms where there are no such institutions, questions about indexation, as a rule, are decided by the employer at his own discretion. Not to mention the fact that about 30% of employees receive salaries in an envelope, and their employers simply ignore the issue of “state” indexation or very freely interpret it in their own interests, of course. So there will be “buns” in the form of wage indexation from February 1 for employees, but not for everyone the same – some will have to rely solely on the decency and generosity of their bosses.
And if the enterprise has a trade union body or, for example, a collective agreement, employees through these institutions have the right to ensure that the employer does not mix bonuses with mandatory wage indexation. And in those private firms where there are no such institutions, questions about indexation, as a rule, are decided by the employer at his own discretion. Not to mention the fact that about 30% of employees receive salaries in an envelope, and their employers simply ignore the issue of “state” indexation or very freely interpret it in their own interests, of course.
So there will be “buns” in the form of wage indexation from February 1 for employees, but not for everyone the same – some will have to rely solely on the decency and generosity of their bosses. And if the enterprise has a trade union body or, for example, a collective agreement, employees through these institutions have the right to ensure that the employer does not mix bonuses with mandatory wage indexation.
And in those private firms where there are no such institutions, questions about indexation, as a rule, are decided by the employer at his own discretion. Not to mention the fact that about 30% of employees receive salaries in an envelope, and their employers simply ignore the issue of “state” indexation or very freely interpret it in their own interests, of course.
So there will be “buns” in the form of wage indexation from February 1 for employees, but not for everyone the same – some will have to rely solely on the decency and generosity of their bosses. so that the employer does not mix bonuses with mandatory wage indexation. And in those private firms where there are no such institutions, questions about indexation, as a rule, are decided by the employer at his own discretion. Not to mention the fact that about 30% of employees receive salaries in an envelope, and their employers simply ignore the issue of “state” indexation or very freely interpret it in their own interests, of course.
So there will be “buns” in the form of wage indexation from February 1 for employees, but not for everyone the same – some will have to rely solely on the decency and generosity of their bosses. so that the employer does not mix bonuses with mandatory wage indexation. And in those private firms where there are no such institutions, questions about indexation, as a rule, are decided by the employer at his own discretion.
Not to mention the fact that about 30% of employees receive salaries in an envelope, and their employers simply ignore the issue of “state” indexation or very freely interpret it in their own interests, of course. So there will be “buns” in the form of wage indexation from February 1 for employees, but not for everyone the same – some will have to rely solely on the decency and generosity of their bosses. that about 30% of employees receive salaries in an envelope, and their employers simply ignore the issue of “state” indexation or interpret it very freely in their own interests, of course.
So there will be “buns” in the form of wage indexation from February 1 for employees, but not for everyone the same – some will have to rely solely on the decency and generosity of their bosses. that about 30% of employees receive salaries in an envelope, and their employers simply ignore the issue of “state” indexation or interpret it very freely in their own interests, of course. So there will be “buns” in the form of wage indexation from February 1 for employees, but not for everyone the same – some will have to rely solely on the decency and generosity of their bosses.
Andrey LOBODA, director of external relations at BitRiver:
“Today, an interesting situation is developing in Russia – the “tops” want to help the people not in words, but in deeds, they give the right message to employers. But here’s the interesting thing: almost all public and private institutions are in no hurry to share news about the relying indexation of 8.39%.
Over the past eight years, an amazing situation has developed in Russia: against the backdrop of economic turbulence, business managed to maintain high profitability, but workers suffered, they turned out to be, in fact, marginal and their salaries were not actually indexed. The low level of business responsibility in Russia still manifests itself in the discrimination of employees in the so-called tariff scales of companies by region. Salaries of employees of the same company may vary significantly in different regions of presence. Businesses should be ahead of the curve and rethink their payroll policy.”
Mark GOIKHMAN, chief analyst at TeleTrade:
“Indexation of wages for inflation is provided for by Art. 134 of the Labor Code of the Russian Federation. It should be carried out by both state organizations and private employers. For state employees, it is provided for in the relevant budget items. For state corporations and private companies, the indexation procedure should be established by labor contracts, agreements, and local regulations.
At the same time, it should be taken into account that a huge number of enterprises, in the face of falling revenues due to the persistence of post-crisis phenomena, will not have financial opportunities for indexation. In such cases, partial indexation is possible – by a smaller amount compared to inflation.
However, in practice, even maintaining the current level of salaries in many companies will be extremely difficult. Therefore, a massive refusal from indexing is likely for businesses. Well, the possible payment of a fine is a “lesser evil” for the company compared to the cost of indexing salaries to employees.”
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