Concise and to the point with ALRUD: HR & DIGITAL (№14)

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.