New rules for monitoring foreign workers’ income: what will change for employers

Russia is introducing a new mechanism for monitoring the income of foreign citizens working in the country. Its main goal is to consolidate information already held by government agencies and use it when making decisions on issuing, extending, or revoking documents confirming a foreign citizen’s right to work.

In effect, the state is moving toward a model of automated interdepartmental control, in which information on the employment and income of foreign workers will be regularly compared without the need to send additional inquiries to employers or foreign citizens themselves.

For businesses, this means that information reflected in tax and personnel reports will be used not only for tax administration purposes, but also in the implementation of migration control.

Interdepartmental exchange of information

The new system provides for regular exchange of information between tax authorities, the Social Fund of Russia, and the Ministry of Internal Affairs.

As part of such interaction, the following information will be transferred:

• on accrued payments and other remuneration to foreign employees;
• on the income of foreign citizens applying the special tax regime for the self-employed;
• on the labor activities of foreign workers;
• on the facts of official employment and termination of employment relations.

Thus, migration control authorities will be able to almost automatically compare information about the right to work with information about actual income received and official employment.

This significantly reduces the volume of manual checks and allows for the faster identification of cases of fictitious employment, lack of official income, or the use of permits without actual employment.

Income sufficiency criterion

One of the key elements of the new system is a unified approach to assessing the sufficiency of income of foreign citizens.

When making certain migration decisions, not only the income received will be taken into account, but also its compliance with the established standard. This standard is calculated based on the subsistence minimum in the relevant region, using a regional coefficient.

In this case, the specific features of the specific situation are taken into account:

• If a foreign citizen works in several constituent entities of the Russian Federation, the highest rate is applied;
• the standard is calculated taking into account dependents located in Russia in cases provided for by law;
• if there are two parents, income can be assessed jointly;
• At the same time, a maximum calculation limit is provided, which cannot exceed the average salary level in the region.

Thus, it is not the minimum wage that is assessed, but the ability of a foreign citizen to independently provide for his own living and the support of his dependent family members.

How will this affect obtaining permits?

Beginning with the application of the new rules, income information will be used when considering issues related to the processing of documents granting the right to work in Russia.

In the absence of confirmed income or if the average income is below the established standard, this may be grounds for a negative decision.

In particular, the new rules provide for the possibility of:

• refusal to issue individual permits;
• refusal to extend or renew them;
• cancellation of previously issued documents.

In this case, the relevant decisions will be made on the basis of information received through interdepartmental exchange channels, without the need for the employer to submit additional documents if the required information is already available in state information systems.

The significance of the changes for employers

The new rules may have the most significant consequences for employers who hire foreign workers.

If, in relation to certain categories of foreign citizens, the results of an interdepartmental audit reveal the absence of confirmed income or its non-compliance with established requirements, this may affect not only the status of the employee themselves, but also existing employment relationships.

For certain categories of foreign citizens, the law provides that, upon confirmation of the relevant circumstances, an employment or civil law contract may be considered terminated from the moment the competent authority makes the relevant decision.

This means that employers need to pay significantly more attention to the correctness of personnel records, the timely reflection of payments, and the completeness of the submitted reports.

What businesses should pay attention to

The new rules do not introduce additional obligations to submit special reports. However, the quality of information already submitted to the state is significantly more important.

Employers are advised to check in advance:

• correctness of registration of labor relations with foreign workers;
• timely submission of tax and personnel reports;
• compliance of accrued payments with actual working conditions;
• absence of long periods when the employee is listed as employed, but there is no information on income;
• the correctness of reflecting payments to foreign workers in calculations of insurance premiums;
• the relevance of personnel information transferred to government information systems.

Particular attention should be paid to situations where foreign workers combine different types of activities, work in several regions, or use special tax regimes, since information from different government systems will be analyzed together.

The new procedure marks the further development of digital collaboration between government agencies. While tax, immigration, and personnel controls were previously handled primarily independently, information will now be used comprehensively.

For employers, this means that any discrepancies between personnel documents, tax reports, and actual payments will be identified significantly more quickly than before. At the same time, the importance of internal personnel and tax control procedures increases, as information already contained in government information systems will become the basis for migration decisions.

Overall, the changes are not intended to introduce new reporting obligations for businesses, but rather to improve the efficiency of using existing information. However, employers who actively employ foreign nationals would be well advised to evaluate their current personnel registration processes in advance and ensure that the information submitted to various government agencies is complete, consistent, and free of inconsistencies.