‘Shadow employment’ will be added to the register: who will be on Mishustin’s blacklist
A register of unscrupulous employers is being created in Russia. Most likely, illegal migrants will be targeted
“The practice of paying salaries in envelopes has unfortunately taken root. But if the public register of the Russian Ministry of Labour also contains data on who does not pay or delays wages, then the service will be of interest to a wider range of workers,” says Yulia Kasilova, an expert in the field recruiting and HR, about measures to combat the gray labour market. Russian authorities have announced the creation of a register of unscrupulous employers who evade paying personal income tax when hiring workers, but the project has not yet been launched. As Realnoe Vremya has found out, 63 companies in Tatarstan may become potential candidates for the blacklist, although over 400,000 people work in the gray labour market.
A priority for 2025
“The fight against informal employment remains one of the state’s priorities in 2025,” said Deputy Minister of Labour and Social Protection of Russia Andrey Pudov in Kazan speaking at the reporting board of the Ministry of Labour and Employment of Tatarstan. He warned that pressure on the gray labour market in the regions will increase.
If until now the problem of legalising workers was dealt with only at the level of interdepartmental working groups of the subject, now federal bodies will additionally deal with this. From 1 January, the ministry has begun to form a register of unscrupulous employers throughout the country who resort to various methods of substituting labour relations with employees when hiring. The fight against informal employment remains one of the state’s priorities in 2025.
The vice minister of labour of the Russian Federation did not specify the details of the new mechanism for combating the shadow market in Kazan. But he noted that the task is to return a large army of semi-legal workers to enterprises. According to the authors of the initiative, the creation of a single registry will counter illegal employment at the federal level. Apparently, the effect of the work of interdepartmental regional commissions was not impressive — job vacancies in the regions are closing slowly, and the gray labour market, on the contrary, is expanding.
New Year's blow to gray employers
The idea of a new form of combating the shadow market appeared last summer. A draft resolution of the government of the Russian Federation on the rules and procedure for maintaining the registry was published on the federal portal of draft regulatory legal acts. The initiative was not particularly advertised, although the authors of the project promised that the registry would begin to function on 1 January 2025. Only at the end of the outgoing year did the project receive approval from the Government of the Russian Federation. On 27 December, Russian Prime Minister Mikhail Mishustin signed Resolution No. 1927 On Approval of the Rules for Maintaining the Register of Employers with Illegal Employment Cases.
The document approves three positions. Firstly, the ministry (and its regional divisions of labour inspections) is defined as the register operator. Secondly, the basis for being included in the “black list” is an administrative offense of evading the execution of an employment contract or concluding a civil contract, which must be secured by a court decision. Thirdly, the offender can be on the list for one year. And the most important thing that should scare offenders is that the register will be open for public viewing.
Timeout until March?
Formally, the document came into force on 1 January 2025, but in fact it remains inoperative until anyone is included in the register. It would seem that the rules are as simple and clear as possible. But Realnoe Vremya's sources claim that the regions are waiting for methodological instructions on who and for what offenses to include in the blacklist.
According to them, the main difficulty lies in building interdepartmental cooperation. The project involves many structures — from the interdepartmental regional commission, the Federation of Trade Unions, the State Labour Inspectorate to law enforcement agencies. Therefore, it is necessary to collect information together, and the inclusion of each “offender” must be agreed upon between them. Most likely, the register will start working in March of this year, the publication's interlocutors believe.
According to her, there is an unofficial register of dishonest workers in the republic employers, but its data is not disclosed: “Small and medium-sized businesses are guilty of this. Large enterprises do not indulge.” If we rely on the initial input data, then 63 companies in Tatarstan could be potential candidates for inclusion in the blacklist.
“The State Inspectorate in the Republic of Tatarstan issued 63 decisions on administrative liability under Part 4 of Article 5.27 of the Code of Administrative Offenses of the Russian Federation for failure to formalize labour relations,” the department told Realnoe Vremya, “The main criterion for including an employer in the register is both the substitution of labour relations with civil contracts, and the absence of an employment contract at all. Information about unscrupulous employers will be stored in the register for one year from the date of the last violation. The basis for early exclusion from the register may be the cancellation of a resolution on an administrative offence. If only a small number of employers in Tatarstan received administrative penalties, does this mean that there is almost no ‘shadow’ labour market in the republic?”
One in five people work unofficially
Meanwhile, the scale of informal employment in Tatarstan is large, experts note. According to a study by FinExpertiza audit and consulting group, in the first quarter of 2024, 419,000 workers, or a fifth of the economically active population, were in a semi-legal position in the republic. According to this indicator, Tatarstan is among the top 3 regions of the Volga region, which corresponds to the general trend in the country.
“The number of Russians employed in the informal sector in the first quarter of 2024 increased by 13.2% or 1.7 million people,” the review says. “There are 14.4 million unofficial workers in Russia, this is the maximum quarterly value. One in five workers in the country do not work officially.
“The practice of paying salaries in envelopes, unfortunately, has taken root, people have got used to it. But if the register contains information that the employer does not pay or delays payments, then it will affect the choice of place of work. The main thing is that employees receive this information earlier, before coming to the interview. And the gray salary itself is unlikely to stop anyone,” Yulia Kasilova reasons.
In her opinion, the blacklist of employers may be directed against those who attract illegal migrants to work. “Judging by the small number of those attracted, these measures are aimed against illegal migrants, and not against local residents. It is clear that they are expelled, controlled, but cannot be gotten rid of,” she suggests.
Replenish budget losses
Another reason for the fight against the gray market is to replenish the treasury. For 9 months of last year, personal income tax collections in Tatarstan amounted to 138.2 billion rubles. “The formation of blacklists of employers indicates new ways for the state to mobilize additional income through salary taxes,” Alexey Krylov, an expert of the Council for Financial, Industrial and Investment Policy of the Chamber of Commerce and Industry of the Russian Federation and tax consultant, noted in a conversation with Realnoe Vremya.
In his opinion, the obvious anti-leaders are the construction and logistics sectors with all their auxiliary satellite businesses. This is typical for both Tatarstan and the whole of Russia.
“If an employee is ready to enter into such labour relations that do not provide social guarantees for him, then this is most likely either an immigrant worker, a teenager, or an unskilled specialist. That is, temporary employment and no need to build a career are typical,” he explains.
In addition to the above-mentioned spheres, attempts to optimize personal income tax and insurance contributions are also typical for the “collar” sphere: consulting, advertising, marketing, PR and services in general. Here, small companies often hire full-time workers under the guise of self-employment. This is no longer typical for large businesses. “I emphasize that here we mean precisely gray employment in legal spheres, and not earnings in obviously illegal in the field,” Krylov specified. He recalled that, according to the latest data from the Russian Statistics Service, the number of people employed in the informal (gray, not black) sector reaches about 21.3% of the total employment level. The introduction of the register is intended to encourage organizations and individual entrepreneurs to maintain average industry salaries and refuse to enter into civil law contracts, the speaker concluded.