March 31, 2022

Erika Collins Talks to About Compensation Challenges Companies are Facing With Employees in Russia reported in a recent article how sanctions imposed on Russia’s largest banks have wreaked havoc on traditional electronic transfers and are leaving companies with the question of how they can pay their employees in Russia. The publication turned to international labor and employment partner Erika Collins for insight on the issue.

Collins noted that restrictions that ban transactions with Russia’s central bank—to which many taxes as well as routine registration and filing fees are due—have also complicated compensation matters.

While the Department of the Treasury’s Office of Foreign Assets Control issued a general license permitting these payments to the central bank until late June, “once the license runs out, it’s going to be difficult to make those tax payments,” Collins said.

“There is potential civil and even criminal liability for the managerial employees located in Russia, especially the ones in charge of payroll and tax payments,” she added.

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