Ekaterina Papchenkova: “The draft law on platform employment does not solve the problem of ‘'grey’' employment”

"In its current wording, the draft law on platform economy changes little, as it consolidates the status quo that has already been established. In principle, it prescribes the already established best practices of large platforms working with platform workers. At the same time, the problem of abuse of the self-employment regime, substitution of labor relations and grey outstaffing — that is, in general, the problem of grey employment, which has historically developed outside the platforms — remains outside of regulation. Platforms have precisely the potential to whitewash and formalize employment through work transparency and digital footprints. However, the draft law does not fully take into account this potential and regulates relations that are already formalized, without creating special advantages for them," the expert highlighted.

"Different groups of citizens turn to platforms, but in general they can be divided into two categories: micro-entrepreneurs, freelancers, who consider the platform as a platform for attracting clients; citizens looking for part-time work to raise their current income or as a temporary solution. Also, citizens not initially involved in the labor market — students, retirees, mothers in maternity leave — go to platforms. In this respect, platforms play a big role in reducing unemployment," Ekaterina Papchenkova added.

Speaking about ways to increase the transparency of the labor market and reduce illegal employment, the expert noted the possibilities of digital platforms. "In general, shadow employment is difficult to eradicate, it can simply be made inconvenient and risky for all parties, giving a flexible and legal alternative. Digital platforms can become such an alternative, but provided that they also control the risks of gray employment and substitution of labor relations and are transparent to the state," said Ekaterina Papchenkova.

"The structure of shadow employment includes, in particular, unofficially employed, leased employees in hidden forms (”grey outstaffing"). In 2025, the volume of the hidden leased employees market is estimated at Rb 11.4 trillion, while the number of employed persons has decreased and is estimated at 13.9 mn people. Conclusion of civil law contracts with taxpayers of the self-employment tax is not considered shadow employment, provided that there are actually no signs of labor relations," the expert added.