Employers must detail employees' bonus award criteria

Amendments to Article 135 of the Labor Code of the Russian Federation came into force on September 1, 2025. 

They require employers to detail in their bonus schemes the employees' bonus award criteria, including amounts, grounds, and time limits, and taking into account whether the employee has received a disciplinary sanction. 

The amendments also give employers the right to specify in a local regulation that an employee's bonus will be reduced only for the month in which he/she received a disciplinary sanction, and also stipulate that the amount of such a reduction cannot result in a salary reduction of more than 20% for the month. 

However, this condition must be enshrined in the bonus award regulations adopted with due consideration to the opinion of the elected body of the primary trade union organization. Previously, courts often sided with employers, which led to injustice: bonuses were withheld without clear rules, and sometimes this served as a disguised fine. 

Currently, employers can establish bonuses either as a fixed amount of money or as a percentage of salary. The bonus award conditions, calculation method, amount, time limits, and payment indicators must be specified in local regulations or a collective bargaining agreement. 

It is also important to distinguish between bonuses that are part of the remuneration system and incentive payments. A bonus, as part of the salary, is guaranteed to the employee provided he/she performs targets and meets conditions specified. In contrast, an incentive bonus is paid solely at the employer's discretion for special achievements and is not a mandatory payment. 

Such payments are determined by internal work regulations, a collective bargaining agreement, or special disciplinary provisions. Employees who participate in projects or meet particular performance goals—economic indicators—can still receive special compensation regardless of any disciplinary action taken against them. 

— Taking into account the changes, employers must specify bonus award criteria in their local regulations, including the consideration and presence or absence of disciplinary action. An employee may be denied a bonus if the specific reasons and amount for deprivation are explicitly specified in a local regulation or collective bargaining agreement. The objective of these changes is to restrict the discretion of employers in determining bonuses - Svetlana Kolganova, a legal expert from the Seafarers' Union of Russia, outlined.