On May 19, 2025, Ekaterina Papchenkova, Director of Center for Evidence-Based Expertise at the Gaidar Institute, took part in the 13th St. Petersburg International Legal Forum (SPILF) in St. Petersburg. The largest platform united representatives of legal, business and law enforcement communities to discuss the law for the benefit of citizens, business, improvement of law enforcement practice, promotion of legislative initiatives with the aim of developing legal culture and regulation of social and economic sphere in modern environment.
During the session “New employment: challenges and opportunities of the platform economy” Ekaterina Papchenkova spoke about the significant role of the platform component in the national economy. Speaking about platform employment it is necessary to take into account that modern labor market in Russia faces a severe challenge, i.e. high share of shadow employment. The structure of shadow employment includes, in particular, the unofficially employed, latent hired labor (i.e. registration of workers through intermediary companies that are not registered as private employment agency (PEA). In 2025, the volume of the hidden labor market is estimated at Rb 11.4 trillion with the number of employed people amounting to 13.9 mn.
As noted in OECD and International Labor Organization reports, platform employment has great capacity to formalize employment, if those employed on platforms register as self-employed and are thus part of the formal sector. Transactional digital platforms demonstrate transparent transactions between customers and performers and digital footprints that help track every transaction on the platform and reduce shadow employment. Platforms also use IT algorithms in their work to exclude risks of labor relations and timely signal their presence. Platforms can also create incentives and conditions for voluntary social security of the self-employed. As such, platforms can act not just as an object of regulation, but as a co-regulator and partner of the state in whitewashing the labor market and creating a transparent legal environment. Regulation of platform employment should take into account this capacity of digital platforms. On the one hand, create incentives for the platform to move to a transactional model (i.e. payments between performers and customers). On the other hand, as the platform’s control over the performer increases, it should impose additional restrictions and obligations to address risks of employment cover-up.
