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Soviet Influence Remains in Eastern European HR, Payroll

By Kerry Cole

HR and payroll methods in Ukraine, Kazakhstan, and Russia are similar because they are inherited from legislation in the former Soviet Union, a Schneider Group executive explained in the GPMI webinar “Payroll in Russia, Ukraine, and Kazakhstan–How to be Compliant.”

“Despite the fact that during the past 25 years, these countries have made a lot of steps toward unification of their own principles and legislation, quite a lot of things in Ukraine will have similarities to Kazakhstan and Russia,” Yuri Donets, Director of the Schneider Group, Kiev, said as he presented his segment on Ukraine.

He and four of his Schneider Group counterparts explained labor and payroll regulations in their countries during a six-hour presentation over three days that is available on demand. The webinar explores in detail the HR and payroll practices and labor laws of each country.

Kazakhstan

HR Team Leader Olga Nezgovorova and Senior Accounting Expert Vladimir Smirnov of Kazakhstan led the discussion and shared information about the Eastern European country. They said 80% of its 18 million citizens speak Russian as well as the state language of Kazakh. The nation’s currency is the tenge.

“In case a foreign company would like to enter our market, it has several advantages,” Nezgovorova said. “The first is an investment-friendly atmosphere, a quite attractive business environment. We are concentrated on consumers. We have quite a high level of employment. Politically we are quite stable.”

As for its downside, she noted a poorly developed transportation system and no international banking landscape.

Ukraine

Ukraine, a nation of 44.5 million people, has an emerging free market, rich farmlands, a well-developed industrial base, a highly trained and cheap labor force, and a good education system, Donets said. He called it one of the best markets for IT development. Its currency is the Ukrainian hryvnia.

He said a new HR code awaits legislative approval in Ukraine.

“If adopted, it will include best practices of the United States and other western countries and increase the responsibilities of employees,” he said. “Generally, the labor legislation valid in Ukraine at the moment protects the rights of employees more than the rights of employers.”

Donets added that international companies can easily hire motivated employees for call-center operations at less expense than in China or India, and the Ukrainian workers can speak English without an accent after a few months of training.

Russia

Associate HR Director Irina Krasheninnikova of Saint Petersburg and Finance Director Tatiana Danilova of Moscow explained payroll and HR concepts in the vast nation of Russia, which covers nine time zones and is home to about 140 million people. Its currency is the ruble.

“In general, it is important for employers in Russia to follow the rules,” Krasheninnikova said. “Otherwise, the breach may cost quite some money and other resources for the company in terms of illegal termination, breach of labor safety, and wrong payments.”

She said the liability of the general manager in a Russian organization is crucial because the general manager is responsible for any breach.

“This is not all about a lot of guidelines that are difficult to be fulfilled,” she said. “This is just about existing rules that are not so strict, not all that complicated as they seem to be from the first time. It is just about the Russian labor laws that are mainly to protect employees’ rights, not the employer, and this is shown by the legislative practice.”


Webinar Poll Question

Taking into account the topics covered by the entire presentation, what do you consider to be the most challenging?

Implementation 50%

Explaining to foreign/U.S. clients 50%

Divergence in comparison to what is paid to U.S. employees 0%