Russia's Primorsky Krai cracks down on shadow employment practices
Crackdown on Shadow Employment Brings Over $11 Million to Primorye Budget in 2025
Authorities in Russia's Primorsky Krai generated an additional 1 billion rubles (over $11 million) for the regional budget in 2025 through efforts to combat illegal employment, according to the local branch of the Federal Tax Service. The agency attributed the results to the work of an interagency commission tasked with tackling the shadow labor market.
The commission was established in Primorye under a regional government decree that took effect in the summer of 2024. Its primary mandate is to swiftly respond to reports of off-the-books employment. Particular scrutiny is applied to employers who violate hiring regulations—such as replacing formal labor contracts with civil-law agreements—or underpay workers below the minimum wage or industry averages.
Authorities are also targeting businesses and self-employed individuals who engage in long-term collaborations with freelancers while avoiding proper employment contracts, a practice often used to reduce tax burdens. Over the past year, the commission reviewed more than 4,000 companies and individual entrepreneurs. As a result, many employers formalized their workers' status and adjusted wage levels, leading to increased personal income tax revenues and social security contributions.
The tax service emphasized that the benefits extend beyond budget gains. The additional contributions have been credited to employees' individual accounts in Russia's Social Fund, boosting their pension savings and social protections. Official employment, officials noted, ensures greater financial security for residents of the region.
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