Employers Blacklist: Signs of Shadow employment

Legal Digest News
Employers who fall under the criteria of informal employment will be entered into the relevant registers. The presence in the registry will have consequences for the companies" - said Rostrud. More about the news in the text below.

Essence of the amendments

On January 1, 2024, a federal law came into force, which approved the creation and functioning of regional interdepartmental commissions to combat illegal employment. The commission consists of representatives of the Federal Tax Service, the Social Fund of Russia, the Prosecutor General’s Office, the Ministry of Internal Affairs, Rostrud and trade unions.

The purpose of the work of the commissions is to combat employers who commit violations in the field of labor and employment (for example, informal employment, avoidance of improper conclusion of employment contracts, etc.).

To achieve this goal, the commissions have the right to request information from government departments about all employers in whose activities certain factors of illegal employment are noticed.

Shadow employment signs

In the Order dated February 2, 2024, № 40n, the Ministry of Labor of the Russian Federation establishes the main signs of illegal employment. However, it is worth noting that this list is not exhaustive and the list of such factors may be broader if representatives of the regional commissions see such a need. The main signs of shadow employment can be distinguished:

  • the discrepancy between the information of the employment centers and the Social Fund of Russia about the work of a citizen (the availability of information about work, but the lack of data in the Social Fund of Russia);
  • non-conclusion of employment contracts or improper registration of employment relations (can be identified as part of unscheduled inspections);
  • the stated salary in the vacancy is below the minimum wage (can be tracked in open sources for vacancies and salaries);
  • payment of wages in an amount below the minimum wage for more than 10 employees, if the share of such employees is at least 10% of the total number of employees;
  • deviation of the average monthly salary paid to employees from the average industry salary in the region by more than 35%;
  • payment of insurance premiums from salaries is carried out below the regional minimum (revealed according to information from tax authorities);
  • a significant reduction in the average number of employees compared to the previous year and taking into account the financial and economic activities of the company (determined by comparing information from tax authorities and the social fund);
  • conclusion of civil law contracts with self-employed people who were previously full-time employees of the organization, or whose relationships are of an employment nature (you can check according to information from the Federal Tax Service);
  • the presence of more than 10 signed contracts with the self-employed, whose average monthly income exceeds 20,000 rubles, and whose average work duration is more than 3 months in one year;
  • Mass appeal of low-income workers for social benefits (determined on the basis of information from employment services).

Register of employers

If the company has signs of illegal employment, it will be included in the relevant register. Rostrud will keep such a register. Currently, the procedure for including and excluding companies from the register is under development, but it is assumed that:

  • in addition to the main reason, those companies that citizens have complained about or for which there are court decisions will also be included in the register
  • those companies that have never violated the requirements of labor legislation during 2 years of being on the register will be excluded from the register.

The new resource will start working on January 1, 2025, however, the commission began collecting information about companies in March of this year.

Responsibility of employers

If the facts of shadow employment are revealed, employers face administrative liability under the Code of Administrative Violations of the Russian Federation in the form of a fine.

For evasion or improper execution of employment contracts, the fine is:

  • for officials — a fine in the amount of 10 000 — 20 000 in case of repeated violation — disqualification for a period from 1 to 3 years
  • for legal entities — a fine in the amount of 50 000 — 100 000 in case of repeated violation, the amount of the fine will increase and amount to 100,000 — 200 000 rubles.

The following responsibilities are provided for the payment of wages below the minimum wage:

  • for officials — a fine in the amount of 10 000 — 20 000 rubles, in case of repeated violation — a fine in the amount of 20 000 — 30 000 rubles or disqualification for a period from 1 to 3 years
  • for legal entities — a fine in the amount of 30 000 — 50 000 rubles, if repeated if violated, the amount of the fine will increase and amount to 50 000 — 100 000 rubles.

In addition to fines, being blacklisted will face unscheduled inspections and other restrictions: on receiving subsidies, grants, preferential loans, tax preferences, participation in public procurement, and so on.

What should companies do?

In order to avoid fines and getting companies into the register, employers are advised to exclude all the above-mentioned signs of illegal employment from their activities.

First of all, it is necessary to take care of the proper and timely execution of employment contracts with those individuals with whom labor relations have developed.

In addition, when working with the self-employed under civil law contracts, it is recommended to check whether all the details are taken into account and the procedure for working with such a category of citizens is followed.

It is also required to conduct an audit of employee salaries and check whether there are those who receive salaries below the minimum wage. In addition to the minimum wage, employers should also focus on the average regional wage level operating in a particular area of the economy. Salaries paid to employees must at least correspond to this level and not deviate from it (downward) by more than 35%.

For compliance with the requirements of the labor legislation of the Russian Federation, as well as the organization of work with employees, please contact Acsour experts.