Member Article

Legislative regulation of platform employment and implications for business

****Platform employment**** is a relatively new sphere, which is just beginning to be regulated. In December 2023, Federal Law No. 565-FZ “On the Employment of the Population” was adopted, which for the first time introduced the concepts of ****“platform employment”**** and ****“self-employment”**** into the ****legal field****. In addition, the law ensured that self-employed individuals and specialists working through ****online platforms**** enjoy much of the same rights as ****employees**** and ****contractors**** working under a ****civil law contract****. Self-employed individuals and specialists working through online platforms are entitled to ****unemployment benefits**** as long as they pay ****taxes**** and ****contributions****.

Now the State Duma is drafting a separate bill “On Platform Employment”. The bill is expected to approve the ****rights**** and ****obligations**** of ****platform specialists**** and ****platforms****. In particular, the Duma deputies are discussing the creation of a unified ****register of digital platforms**** under the control of a supervisory agency – most likely ****Roskomnadzor**** (the Russian personal data protection authority). They also want to require platforms to notify specialists about the possibility of ****voluntary medical and pension insurance****. We will track the progress of this bill.

When hiring specialists who work through platforms, we already recommend taking into account ****labour and tax risks****, such as the risks of ****reclassifying relations**** with such specialists as labour relations, recognizing a client as a ****tax agent**** in relation to a self-employed contractor, and the risks of violating ****legislation on personal data**** when information about such specialists is transmitted to third parties. In order to mitigate possible risks, we recommend ****analysing agreements with providers of digital platforms**** for provisions that may lead to the materialization of these risks.

Assessing the degree of harm caused by leaks of personal data

The ****Ministry of Economic Development**** has proposed establishing the following criteria for determining the ****degree of harm**** caused by ****leaks of personal data****, from the least to the most critical, including to determine the amount of compensation for such a violation:

• Causing harm to a citizen's ****life or health**** as a result of a leak of personal data that identifies a person by ****biological characteristics**** (scans of identity documents, photo and video materials, or residence and work addresses)

• Causing damage to a citizen's ****property**** (account data, passwords, or logins of property-related accounts)

• Causing ****moral damage**** (data on health or personal data) and ****personalized marketing**** (data on purchase history or spam calls)

Harm caused on the grounds of gender, race, nationality, language, origin, property status, attitude to religion, or beliefs should be an ****additional aggravating factor**** when determining the degree of harm caused.

Extension of the tax secrecy regime to include information on employment

The ****State Duma**** has passed in the ****second**** and ****third readings**** a bill that would extend the ****tax secrecy regime**** to information transmitted by the tax authorities to ****regional interagency commissions**** in charge of combatting ****illegal employment**** and to regional bodies of the ****Federal Labour and Employment Service**** (Rostrud).

On ****1 January 2024****, a new federal law on ****employment**** came into force, which stipulates that ****interagency commissions**** in charge of combatting illegal employment shall be established in all regions of the Russian Federation. These commissions will be ****entitled to receive**** various information, including ****personal data**** and information constituting a tax secret, from state bodies, including the ****Federal Tax Service****.

The Ministry of Labour and the Federal Tax Service will approve a ****list of information**** that the tax authorities will transmit to such commissions. The information on this list will have to be transmitted ****automatically by the tax authorities**** without a request from these agencies. Rostrud, in turn, will maintain a publicly accessible ****register of employers**** that have been found to have engaged in illegal employment.

 

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