Life on loan: Authorities expose illegal employment
According to the Ministry of Labor, employers who indulge in shadow employment deprive employees of social guarantees and responsibility for their safety. Also, periods of work without registration are not included in the retirement record. Employers who exploit shadow employment thereby avoid paying taxes and insurance premiums, which reduces budget revenues and undermines the social system. In this regard, the Government has approved a new plan to combat the vicious phenomenon. Meanwhile, experts believe that many citizens often choose a "gray" job for themselves in order to hide their income, avoid alimony or debts. Izvestia looked into the extent and causes of the growth of illegal employment in Russia and the real difficulties in overcoming it.
The new course: from monitoring to prevention
The Government of the Russian Federation has approved an action plan to combat illegal employment for 2025-2027. The document includes 18 measures aimed at identifying, suppressing and preventing informal labor, Irina Sattarova, Assistant Minister of Labor and Social Protection of Russia, told Izvestia.
Dmitry Platygin, Deputy Minister of Labor and Social Protection, explained that the main goal of the plan is the social protection of citizens. "Refusal to formalize an employment relationship leads to the loss of social guarantees, including vacations, sick leave and retirement experience, payments in connection with the birth and care of a child," he said.
One of the most important tasks is to prevent situations when a citizen, for one reason or another, is forced to accept a job without proper registration, the ministry notes. To do this, experts will analyze practices to prevent the substitution of civil law labor relations (GPH registration), and the best regional solutions will be replicated.
The authorities plan to conduct quarterly monitoring and strengthen interagency cooperation. The Ministry of Labor is responsible for the implementation, and the Federal Service for Labor and Employment (Rostrud) and regional authorities are responsible for the implementation.
Rostrud explained to Izvestia that interdepartmental commissions are currently operating in each region, including labor inspectors, tax and municipal representatives. They identify employers who shy away from registering employees and carry out explanatory work. In addition, preventive visits and campaigns to inform citizens and employers about labor rights and the consequences of violations are actively used.
According to Rostrud, over 2.2 million labor relations were legalized in 2022-2024, and more than 810 thousand in 2024 alone. In the first quarter of 2025, it was already 150 thousand. The new plan assumes that social services, as well as local personnel units, will be involved in this work.
Criticism and controversy
Despite the stated goals, some experts and lawmakers have expressed doubts about the effectiveness of the proposed plan. State Duma deputy and former Labor Minister Oksana Dmitrieva considers the document insufficiently specific: "There are no incentives for employers except to create a register of violators. The main focus is on monitoring and analysis." She also questioned the need for a tough fight against GPH contracts, since "personal income tax and contributions are paid from them, with the exception of social security."
Olga Epifanova, a senator and expert at the Agency for Strategic Initiatives, took the opposite position. She believes that the new rules are "a serious step towards legalizing relationships disguised as GPH." At the same time, she stressed that the effectiveness of innovations will depend on the practice of their application, the resources of Rostrud and the ability of the business to rebuild. Epifanova recalled that from September 1, 2025, labor inspectors will have the right to sue employers if they find a substitution of GPH employment contracts.
Alexander Safonov, professor at the Financial University under the Government of the Russian Federation, former Deputy Minister of Health and Social Development of the Russian Federation, identified another side of the problem - the economic motives of employers.: "Often, transferring to a GPH or registering as self—employed is a way to reduce the cost of taxes and contributions. But this deprives employees of their rights and undermines regional budgets."
According to his estimates, up to a million people in Russia today may be involved in such schemes.
At the same time, Safonov noted that "black" employment, when no contracts are drawn up at all, is an even more complicated problem, since it is more difficult to fix it. In his opinion, the Federal Tax Service should be more actively involved here, tracking cash flows and unregistered activities.
Estimates of the scale of shadow employment in Russia in 2024 range from about 6.5 million (Ministry of Labor) to almost 16 million (Rosstat), due to different calculation methodologies and criteria for determining shadow employment. The Ministry of Labor focuses on individuals with incomes without official confirmation, and Rosstat takes into account a wider range of informally employed, including the self-employed and employees of sole proprietors without registration of a legal entity.
"Informal employment is a necessary measure, especially in the regions"
Not all labor market participants are ready to discuss the topic openly. Some recruitment agencies, as it turned out, avoid comments. "Public statements on this topic can be perceived as justification of their own schemes or their recognition," the interviewed participants in the employment market explained to Izvestia. This only highlights, among other things, the lack of uniform standards for assessing the "illegality" of certain forms of employment.
Lyudmila Ivanova-Shvets, Associate Professor of the Basic Department of the Chamber of Commerce and Industry of the Russian Federation at Plekhanov Russian University of Economics, draws attention to the fact that the problem of illegal employment is not only the responsibility of employers: "Many citizens choose "gray" jobs themselves to hide income, avoid alimony or debts." At the same time, informal employment is often a necessary measure for those who cannot find formal work, especially in the regions, she admits.
The state should consider the possibility of increasing responsibility not only for employers, but also for employees who knowingly evade taxes, Ivanova-Shvets is sure. "Only if the demand for informal employment disappears in the labor market will employers be forced to come out of the shadows," the expert notes.
The interlocutor of the publication calls most of the measures in the new plan explanatory and monitoring. But it is precisely this kind of gradual and complex impact that can change the situation, she is convinced: "Everything must work together — punishments, training, and support."
Yulia Ramzenkova, a member of the Russian Bar Association, emphasizes that measures to combat the substitution of employment contracts include both inspections and fines, as well as the development of system solutions — plans and regulations. She considers it important to introduce a publicly accessible register of employers who violate the law (from January 1, 2025), as well as the need for public awareness.
"The low legal culture, the difficulty of finding employment and the flexibility of shadow schemes are the main reasons why citizens go to informal work," she is sure.
Raising the level of legal awareness of employees can play a key role. "The more citizens know their rights and protect them, the fewer employers will be able to abuse the situation," Ramzenkova concludes.
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