PFR Board Chairman Anton Drozdov on benefits of electronic employment record book

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05 december 2019

The federal law on electronic employment record book takes effect in Russia on January 1, 2020. Russian Pension Fund head Anton Drozdov told TASS about advantages of the electronic employment record book, the possibility to continue using paper-based employment record books, employee information to be provided by employers, and security of personal data.

Anton Viktorovich, the federal law on the electronic employment record book will take effect on January 1, 2020. The PFR will be keeping record of citizens’ employment history. Please tell what information employers will be providing to the PFR starting next year?

Starting January 1, 2020, employers will be submitting monthly electronic reports on the history and length of employment of every employee to the Pension Fund. Reports will include information about recruitment and dismissal, place of work, occupation, position and any change that occurs at the organization, such as transition from one position to another, from one structural division to another, and the organization’s renaming. The Pension Fund had no such information before, but now everything available in the employment record book will be received by us in the electronic form consistent with the Labor Code.

Are employers ready for change?

We launched a pilot project involving 15 major insurance companies and accounting software developers in August of this year. We have been testing our interaction since September, and developers have been upgrading their programs. The testing is about to end, and we are expecting the software to be presented to insurance companies after December 15.

Will there be any drastic change for employers?

Starting from 2020, employers will be monthly supplying us with information about their employees. We will receive the first employee report for January by February 15.

Starting from 2021, the provision of information will be expedited. For instance, we will learn about recruitments and dismissals on the next working day. As a result, employees will instantly have access to such information for the purpose of their next recruitment. The rest of information will still be provided by employers on the monthly basis.      

Will employers bear any extra costs?  

All processes will be based on standard procedures and upgraded accounting software, so all employers need to do is learn how to use the new version.

Employees who want to keep their paper-based employment record books should submit the relevant statement in 2020. Who is compelled to issue such notifications to employees? Are there any notification deadlines? What should be done in the event an employee leaves the place of employment where the statement was filed and takes a job with another company? 

By law, employers must inform employees about modifications of labor laws by July 1, 2020. A citizen is supposed to make a choice during 2020 and to submit a statement, which says whether he/she keeps paper-based employment record book or shifts to the electronic one. Employees who choose the electronic format will receive their paper-based employment record books for keeping. At the time of dismissal, the employer will provide the employee with employment information in a special format or in the form of an electronic document signed with the qualified digital signature. That is the employee’s choice. But if the employee loses this information, it can always be restored from the PFR database.

If employees choose paper-based employment record books, employers will keep filling them and will present them to employers at the moment of dismissal. Following recruitment by the next employer, the employee will also have a choice between paper-based employment record book and the electronic one.

Employees who start their career in 2021 will have their employment record books in the electronic format only.

If a person does not make the statement in 2020, for instance, because of a long business trip, vacation, sick leave or lack of employment, the right to choose between paper-based and electronic employment record book remains after 2020. Until then the employer will be keeping his/her employment record book in the paper format.

Will electronic employment record books indicate the reason for dismissal? Will the next employer be able to see why the employee has been dismissed?  

Yes, the number of the dismissal order and reasons for the dismissal will be indicated.

Will the employer see this information without the employee’s consent?

No, of course, not. That’s personal data.

Is there any chance that the electronic employment record book might be lost?

No. Employment information is stored in the Pension Fund’s databank, which meets every requirement for collection, storage and processing of personal data. State-of-the-art equipment approved and recommended by information security regulators is being used for that purpose. Loss of paper-based employment record books is much more common.

What if information included in the electronic employment record book is wrong?

If the wrong information appears through the employer’s fault, the employer must correct reports at the employee’s request.

Is there any punishment for employers providing wrong information about their employees to the Pension Fund?

Yes, relevant amendments to the Russian Code of Administrative Offenses have been submitted to the State Duma. Employers will bear responsibility for late, incomplete, and incorrect information about work of its employees. In the case of late, incomplete and incorrect information, the Pension Fund notifies Rostrud, which imposes administrative penalties on such employers. The bill submitted to the State Duma says that employers will be penalized with a warning.

Will employers provide information about awards and certificates of appreciation from ministries and agencies, as well as letters of commendation and honorary distinctions? It is possible to add such information to the employment record book nowadays.  

It is not planned to provide information about awards for the purposes of the electronic employment record book. The thing is that various benefits related to awards are not based on information from the employment record book. Their provision requires presentation of the state award and its certificate to the social security service, the Pension Fund, or another authority.

Hence, there is no need to add such information to the employment record book. Besides, that would additionally burden employers. The employment record book is an instrument for recording the length of employment, while awards are the basis for receiving benefits.

Did the State Duma add anything new to the bill in the course of debates?

In the first edition of the bill, employers were mandated to inform us only about recruitments, dismissals and staff changes. The second reading endorsed the norm, which compels employers to report the latest occupied position of their employees. This is necessary for market analysis; the information shows the exact number of working people, areas of their employment, and occupations. For instance, colleges and universities need to know which of their graduates are working consistent with the training and which are not.

Anton Viktorovich, the Pension Fund is keeping records of working citizens. How many people are there in your database?

The personal insurance policy number, SNILS, is assigned to all citizens of the Russian Federation, as well as persons who come to Russia and start working here.

There are about 156 million SNILS at the moment, i.e. the Pension Fund is keeping records of working and non-working citizens.  

How many citizens are employed?

We receive information about 63 million working citizens over the year. These are people who worked for at least one day during the past 12 months.

If a person loses the employment certificate or needs to present this information to who it may concern, where should the information be taken from?

The information can be provided in the prescribed form by the employer, the Pension Fund, and the multifunctional center. It is also available in the employee’s account on the Pension Fund website or the Gosuslugi portal. The information could be printed or emailed. Such documents do not need certification, they already carry an electronic signature.

We have done the same for maternity capital. There is no need to receive your certificate on paper: you can file an application and receive the approval of your maternity capital online, via the account on the Pension Fund’s website, or from the multifunctional center.

Now that you have mentioned maternity capital… The government has recently allowed to build dachas with maternity capital funds. Is it a new area of the program?

Actually, the norm has been clarified. Such cases existed but the norm was unclear. Hence, the norm was clarified at the government’s proposal and legalized current practices.

Is it relevant, in your opinion?

I think it is, since such practices exist.

Anton Viktorovich, will you keep your paper-based employment record book?

I will choose the electronic employment record book. This is more convenient for me.