Social policy

We strive to maintain an attractive employee remuneration system so as to facilitate social stability and to enhance the quality of life of our employees and their families. Company obligations which supplement those of the laws of the Russian Federation and international standards are set out in the Social Code of PJSC LUKOIL. Services under employee social programs are provided in both Russian and foreign entities, and employees can participate in these programs irrespective of whether they are employed full or part-time.

LUKOIL Group staff costs, RUB million
2017 2018 2019
Total, including: 142,141 145,706 147,284
  • payroll
132,022 136,475 138,180
  • social benefits and payments, social support for employees
9,294 8,403 8,125
  • training
825 828 979

Note. For a definition of payroll see Appendix 7.

Scope of services provided under LUKOIL Group social programs
Indicator 2017 2018 2019
Total for LUKOIL Group, including: 468,150 430,323 456,495
  • Health protection, services
325,711 286,746 322,795
  • Social support for families with children, services
65,311 62,241 59,480
  • Non-state pension coverage, people
12,453 12,263 12,115
  • Support for pensioners, people
43,281 44,990 42,825
  • Other, services
21,394 24,083 19,280
Specifically for Russian entities, including: 402,709 357,277 387,154
  • Health protection, services
276,063 229,781 267,830
  • Social support for families with children, services
61,461 58,664 55,308
  • Non-state pension coverage, people
5,795 6,363 6,345
  • Support for pensioners, people
43,116 44,884 42,689
  • Other, services
16,274 17,585 14,982

Note. A service provided to an employee under a social programs constitutes the provision of various types of social assistance and support at the employee’s request in kind (e.g. vaccinations) or in cash, to pay for the service or to compensate for its cost.

Wages and salary

In Russia, the minimum subsistence level is regulated by law, as is the minimum wage and how often it is paid. LUKOIL enters into voluntary collective agreements governing minimum wage rates, bonuses, and other types of remuneration. Such contracts cover 96% of employees in the Group’s Russian entities.

Under an agreement between PJSC LUKOIL and trade unions, the minimum rate of pay is at least equal to the minimum subsistence level for the working population. Rates of pay depend on performed duties, the complexity of work tasks and level of responsibility, and are established for each employee taking into account their education and practical experience.

In 2019 the minimum rate of pay in significant regions of operation in Russia was in line with or exceeded the regional minimum wage. Minimum rates of pay are the same for men and women.

The initial salary at LUKOIL Group foreign entities is at least equal to the minimum wage rate established by the labor laws of a country where LUKOIL Group operates, collective agreements, and/or local regulations.

Average salary in 2019 in Russia, RUB
Significant regions of operation Average salary at LUKOIL Group’s entities in Russia Average salary in the region (Jan–Dec 2019)
Astrakhan Region 63,877 35,792
Volgograd Region 74,919 32,737
Kaliningrad Region 89,645 34,357
Krasnodar Territory 61,633 36,155
Nizhny Novgorod Region 82,664 35,692
Perm Territory 83,730 38,562
Komi Republic 112,556 53,162
Saratov Region 57,996 28,503
Stavropol Territory 60,614 31,867
Khanty-Mansi Autonomous Area – Yugra 114,185 74,525

The employee incentive system in Russian entities also includes benefits and compensation established under an agreement between the employer and the trade union, collective agreements, and other local regulations. A significant part of benefits and compensations is geared towards enhancing the quality of life of our employees through maintaining their health, providing support to them and their families, and offering them housing assistance. Social support is also provided to former employees who have retired from the Company.

Voluntary health insurance

Voluntary health insurance programs cover over 90% of employees at Russian entities. Employees can at their own expense widen the coverage of health insurance programs to meet their specific needs.

Housing program

The housing program is implemented in accordance with the Basic Housing Policy of LUKOIL Group and is aimed at providing housing to production personnel (coming from other regions with a job offer and young professionals). The Company also helps employees in this area by partial payment of interest on bank loans. In 2019, 1.4 thousand employees participated in the program.

Pension benefits

Russian entities finance a corporate-defined pension plan that covers the majority of employees. One type of plan is based on the number years of service to the Company, the salary level as of the end of 2003, and any awards received during the entire period of employment. The other type of pension plan is calculated in proportion to the salary level. These plans are financed solely by LUKOIL Group entities. Also, employees have an opportunity to make pension savings with the Company’s participation (up to 4% of employees’ annual salary). JSC Non-State Pension Fund Otkritie manages the pension plan assets of LUKOIL Group entities and makes pension payments.

Employees of foreign entities are provided pension benefits in line with the laws of the country of operation as well as the local regulations of entities. Some pension plans are financed solely by employers, while others are based on contributions from both employees and employers.

Pension benefits and pension plans
2017 2018 2019
Pension liabilities, LUKOIL Group, RUB million 10,367 8,910 12,544
Number of former employees receiving a corporate pension, in Russia, people 46,294 49,441 52,854
Average non-state pension level in Russia, RUB 2,240 2,272 2,134