The Ministry of Labor discovered more than 663,000 informally working Russians

The Ministry of Labor identified 663,882 Russians who were employed in the shadow sector of the economy last year. About it reported Izvestia with reference to the department’s report.

To solve the problem, the Ministry of Labor plans to develop various options that will encourage companies to reduce the number of informal labor relations. It is clarified that such incentives will be primarily aimed at companies in industries with a high risk of shadow employment – trade, restaurant and hotel businesses, as well as construction, etc.

To speed up the process of legalizing labor relations in Russia, the authors of the report propose introducing legislative definitions of shadow and platform employment, as well as maintaining a publicly accessible register of employers who once had cases of illegal employment recorded.

According to Ekaterina Papchenkova, deputy director of the Center for Strategic Research (CSR) and director of the Center for Regulatory Policy, platform employment usually means performing one-time work for different customers; in this case, performers most often pay tax on professional income and are registered as self-employed. According to Rosstat, in the first quarter of 2023, almost 5 million Russians were registered in this way.

Unofficial registration of employees may be a way for companies to reduce costs against the backdrop of rising costs of borrowed funds for business, says Alexander Safonov, a professor at the Financial University under the Government of the Russian Federation.

According to Rosstat, in July the unemployment rate was a record low of 3%. The number of unemployed people totaled 2.3 million people, and the number of registered unemployed people (that is, those who applied to the employment service) amounted to about 509,000 people in the first half of 2023. Among them, the proportion of people over 50 years of age increased (from 27.4 to 30.5%) and those who are officially unemployed for one to eight months (from 68.7 to 70.1%). The increase in the latter category is associated with a deterioration in the qualitative composition of the unemployed in terms of education and professional qualifications.

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