The Gaidar Institute's Center for Evidence-Based Expertise (CEBE) presented the findings of the study “Shadow Employment: The Role of Digital Platforms in Legalizing the Market”

Over the past five years, the number of people engaged in hidden leased labor has decreased by almost a quarter — from 17.9 mn in 2020 to 13.9 mn at present.

Hidden leased employees are the main part of shadow employment. Despite the restrictions, it masquerades as service contracts, labor contracts and agency agreements. Many people employed under civil law contracts are in fact in the position of employees without proper legal guarantees.

Digital employment platforms are now becoming the new intermediaries. They determine the cost of the order, select the contractor through algorithms and organize the execution of the contract. However, there is a risk of concealing the employment relationship, which can be mitigated by competent regulation.

DEPs can play a key role in formalizing the employment market. They “bring” the employed out of the shadows through easy entry, flexible schedules, self-selection of orders and the possibility of combining with the main job. Algorithms of digital platforms and their IT-technologies can effectively whitewash the self-employment regime by suppressing the practice of concealing labor relations. According to experts' forecasts, if the current trend to reduce the number of those employed in hidden contingent labor continues, their number may decrease by another 20% in the next five years. This shows the significant potential of digital platforms in legalizing the labor market.

This requires legislative regulation of DEPs. It is important to define the criteria of digital platforms, to protect them from qualification as employers, to establish a Council of Digital Platforms, and to assign responsibilities to DEPs to identify concealment of labor relations and to inform about insurance and pension benefits.

Vedomosti: “Experts have estimated the volume of the market of hidden hired labor”