Increase in "budget"
According to statistics, about 1.6 million public sector workers received wages below the subsistence level.
Since May 1, their earnings have increased. Money for these purposes was taken from the reserve fund.
By Government Order No. 440-r dated March 16, 2018, allocations of 20 billion rubles were allocated to provide subsidies to the budgets of constituent entities of the Russian Federation to compensate for additional expenses for increasing wages for public sector workers in connection with the increase in the minimum wage from May 1.
In addition, by Order No. 780-r dated April 27, 2018, allocations in the amount of 16.3 billion rubles are allocated from the Government reserve fund to provide subsidies to the budgets of constituent entities of the Russian Federation for partial compensation of additional costs for the payment of regional wage coefficients and percentage bonuses established at the federal level and to increase wages for public sector employees in connection with an increase in the minimum wage.
“Never before in the Russian Federation has there been such an increase in wages for certain categories in the public sector,” said the head of the Ministry of Labor, Maxim Topilin.
Salary indexation
Labor legislation not only establishes the minimum wage, but also obliges the employer to periodically adjust salaries in connection with rising prices. Failure to index workers' wages in connection with rising consumer prices is equivalent to payment of wages incompletely, for which Part 1 of Art. 5.27 of the Code of Administrative Offenses provides for a fine of 30–50 thousand rubles.
In this case, not only the failure to index, but also the absence in the organization of documents regulating it is considered a violation. In accordance with Art. 134 of the Labor Code of the Russian Federation, an employer not related to the public sector cannot evade the establishment of indexation only because its mechanism is determined when concluding a collective or labor agreement or in a local regulatory act. However, as an analysis of judicial practice shows, Rostrud does not always succeed in forcing employers to publish such documents.
Thus, the Moscow City Court recognized that the evidence presented by the organization confirms an increase in staff salaries over the year by 7.2%, which is more than the inflation rate. This means that the employer fulfilled its obligation to index and the fact that this happened without being stipulated in the relevant local act is not an offense. Since the Labor Code of the Russian Federation does not contain a direct requirement for the publication of such a document (appeal ruling of the Moscow City Court dated August 28, 2014 in case No. 33-34136). In another case, the Moscow City Court rejected the attempt of the labor inspectorate to force the employer to issue an act regulating indexation, even when the organization not only did not have the document, but also did not carry out indexation. Here the judges refer to Art. 134 of the Labor Code of the Russian Federation indicated that issues of salary indexation fall within the exclusive competence of the employer (appeal ruling of the Moscow City Court dated July 6, 2017 in case No. 33-22702/2017).
On the obligation to carry out indexing and the publication of documents regulating it, see:
- determination of the Constitutional Court of the Russian Federation dated July 17, 2014 No. 1707-O;
- letter of the Ministry of Labor dated December 26, 2017 No. 14-3/B-1135;
- “Report with guidance on compliance with mandatory requirements... for the 3rd quarter of 2021”, news on the website rostrud.ru dated 03/15/2018;
- appeal rulings of the Moscow City Court dated August 28, 2014 in case No. 33-34136 and July 6, 2017 in case No. 33-22702/2017; dated September 14, 2017 in case No. 33-32808/17 and dated April 10, 2017 in case No. 33-13548/2017.
Promotion in commerce
Commercial firms must independently find funds to bring the salaries of their employees up to the federal minimum wage.
Note that employers from some regions will not have to fuss because of the new federal minimum wage. They need to focus on the regional “minimum wage”, which is higher than the federal one. For example, in Moscow the minimum wage is 18,742 rubles, in the Moscow region - 13,750, in St. Petersburg - 17,000, in the Leningrad region - 11,400 rubles. In addition, the regional minimum wage is higher than the all-Russian minimum wage in such regions as the Tula region, the Magadan region, and the Kamchatka Territory.
Let us remind you that in the northern regions the “minimum wage” should be increased by the regional coefficient.
Those employers who paid employees less than the minimum wage before May 1 need to review payments and make changes to employment contracts.
As the preliminary results of a survey conducted on our website show, 30% of employers carried out an increase. By the way, the majority (45%) already paid their employees more than 11,163 rubles.
What is a living wage
Federal Law No. 134 considers the concept of a subsistence minimum (LM) as an expression of the cost of goods that are consumed by the population. This cost includes all types of taxes and payments that must be paid by citizens. An important point is that only amounts calculated for able-bodied people are taken into account.
The cost of living indicator helps determine how much government agencies will spend next year. Also, when using this indicator, payments of social significance are calculated. The minimum considered depends on the complexity of the economy. It is established individually for different groups of citizens.
Legislative acts indicate that the cost of living is established by federal authorities. This is necessary so that they can subsequently give recommendations to regional authorities regarding the establishment of their own standards. It is stipulated that the minimum wage indicator is also determined depending on the subsistence level.
Currently in Russia the minimum wage has been established at approximately 15-20% higher than the minimum wage. This rule is spelled out in federal law No. 82. After the minimum wage indicator is indicated, the wage level is calculated.
Non-promotion in "commerce"
Meanwhile, 25% of the employers we surveyed took a different route.
They raised wages without raising them. As is known, according to Art. 133 of the Labor Code should be paid no less than the minimum wage to those employees who have fully worked their normal working hours. If an employee works part-time, then his salary is paid proportionally.
For example, until May 1, 2021, employee Ivanov received a salary in the amount of the minimum wage in the amount of 9,489 rubles.
From May 1, with an 8-hour working day on a standard five-day week, his salary cannot be lower than 11,163 rubles. However, the employer, simultaneously with increasing the salary to the new minimum wage, transfers the employee to part-time work, formally complying with the Labor Code norms.9489/11163*8=6.8 hours or 0.85 rate.
Thus, if you shorten an employee’s working day by 1 hour, making it 7 hours, then you can pay Ivanov not 11163, but 9767.63 (11163/8*7).
Let us note that the reasons for such a change in working hours at the initiative of the employer are limited by the provisions of Art.
74 TK. However, the employee himself can take the initiative. If employees suddenly decide to switch to part-time work starting in May 2021, declaring this in writing, the employer has the right to satisfy their request.
Can wages be below the subsistence level?
Labor legislation indicates that wages should not be less than the subsistence minimum. However, these provisions can be called theoretical. Due to the fact that the PM value is subject to change every quarter, it is necessary to establish the dependence of wages on the minimum wage. At the same time, this value is determined taking into account the cost of living.
For this reason, it may happen that a citizen’s earnings will be lower than the minimum monthly wage for a certain period. It is worth pointing out that when taking into account the amount of earnings, it is necessary to sum up all parts of the salary, and not take any of them separately. This suggests that if a citizen has different bonus payments and allowances, it is quite possible that the salary will be less than the minimum wage.
What threatens employers
For paying wages below the minimum wage, those who have worked the monthly norm are subject to a fine.
Fines for this case are prescribed in Part 6 of Art. 5.27 of the Administrative Code and are:
- for legal entities – from 30 to 50 thousand rubles;
- for officials - from 10 to 20 thousand rubles;
- for individual entrepreneurs – from 1 to 5 thousand rubles.
It should be noted that recently regulatory authorities have been paying a lot of attention to the work on legalizing wages.
Under the leadership of the Ministry of Labor, interdepartmental commissions have been created in each subject of the Russian Federation to coordinate activities and monitor the situation to reduce informal employment, legalize “gray” wages and increase the collection of insurance premiums. In addition, for example, the Social Insurance Fund “leaks” to labor inspectors data on employers who charge contributions from a salary calculated below the minimum wage.
The Pension Fund calls on citizens to provide information about employers who offer to receive part of their salary “in an envelope.”
Tax officials use a number of criteria to identify companies with shady salaries. For example, their attention will be sharpened if they notice that an employee’s salary at a new place of work is lower than at the previous one (according to 2-NDFL certificates), that is, he changed jobs on less favorable conditions.
The Criminal Code provides for the following types of punishment:
- Monetary fine: 100,000 - 500,000 rubles in ordinary cases, 200,000 -500,000 in case of serious consequences;
- A fine in the amount of the convicted person’s income for a period of up to 3 years in ordinary cases, or from 1 to 3 years in cases involving grave consequences;
- Forced labor for up to three years (can be applied with or without deprivation of the right to hold certain positions);
- Restriction of freedom for a period of up to 3 years or for a period of 2 to 5 years (with grave consequences), can also be applied in conjunction with deprivation of the right to work in certain positions.
The guilty person can avoid criminal liability if, within two months from the date of initiation of the criminal case, he pays wages in the required amount and compensates employees for penalties, moral compensation and other payments provided for by law (provided that this offense was committed by him for the first time).
Paying wages less than the minimum wage entails administrative or criminal liability. It is important to understand that both types of liability can apply simultaneously.
Arbitrage practice
The court should be considered as the only authorized body to make a decision on which the company is liable to pay fines. It is worth pointing out that funds not paid to the citizen as wages may also be requested. The employee has the right to demand compensation for underpayment.
To file a claim, you will first need to collect all the acts that are aimed at confirming the position of an individual employee whose powers have been violated. The best option is to have pay slips in a person’s hands, which indicate the accrued amounts and how much money is withheld and on what basis.
Currently, there is quite an extensive practice of judicial authorities on this issue. Almost every time, proceedings in this instance end with the person winning. The company's management will not be able to write off their guilt in paying low wages due to the fact that there is not enough money.
Often, controversial situations occur regarding the procedure for calculating wages, taking into account the coefficients for northern areas. It is for this reason that the management of enterprises calculates the level of earnings in such a way that it is no less than the monthly minimum.
