After Putin ordered paid leave for all non-essential workers, half of Russian companies cut employee salaries

Russia’s unusual economic approach to the COVID-19 pandemic has centered on President Vladimir Putin’s order for all employers to grant non-essential workers paid leave at least until the end of this month. However, a new report from the Center for Strategic Research indicates that almost 30 percent of Russian companies mandated that at least some of their workers take unpaid leave instead. RBC reported on the new survey.

About 1,000 businesses took part in the Center’s polling between March 31 and April 2, during Russia’s first non-working week. Of those companies, 49 percent said they had cut some employees’ hours and decreased their salaries in lieu of instituting paid leave. More than 20 percent of companies cut salaries while maintaining the same number of hours for employees.

About 20 percent of companies transferred employees to remote work and simultaneously cut their salaries. Sixteen percent of companies have begun to lay off employees.

As Russia’s Labor Ministry reminded the country’s businesses at the end of March, employers do not have the legal right to mandate that their employees take unpaid leave.

While Russian employers have been asked to continue covering their employees’ salaries despite falling revenues due to COVID-19, the Russian government’s total outlays to cover business expenses have been equivalent to only about 215,000 times one month’s minimum wage. This means the overwhelming majority of businesses will likely lack the support to maintain their expenses.