New Forms of Employment in Russia: Institutional Challenges

The labor market has undergone profound transformation in recent decades. The traditional employment model—permanent contracts, full-time hours, fixed workplace—is gradually giving way to more flexible work arrangements. Driven by automation and digitalization, the rise of platforms, and shifting social norms, new configurations of labor relations are emerging: remote and hybrid work, platform employment, freelancing, project-based work, and self-employment. What unites these forms is the use of digital technologies both for finding work and orders, and for communication, management, and payments. Researchers and experts increasingly speak of "digital employment" as an umbrella term characterizing these new forms.

Digital technologies have made it possible to perform work outside the office, at any time, in any place, using digital tools. But the technological "maturity" of the labor market is only one side of the coin. The institutional environment—laws, regulations, social protection mechanisms—often lags behind market dynamics.

Why are new forms of employment growing?

A whole complex of factors influences the emergence and spread of new forms of employment.

The digital economy and development of digital technologies are the key drivers of change. Widespread adoption of the Internet, cloud technologies, artificial intelligence, and platform solutions have created the technical foundation for remote work and instant connection between clients and contractors.

Changing employer needs. Amid intensifying competition, companies are seeking flexible solutions for workforce management: temporary workers, project teams, outstaffing. According to survey data from 2024, 39% of companies are already implementing employment forms beyond standard arrangements. Among these, the most common are secondary employment (73%), temporary or seasonal employment (65%), part-time work (54%), and civil contracts with freelancers (50%).

Social and demographic changes. Workers increasingly seek work-life balance, which according to data Workmonitor, for the first time in its 22-year history of observations, showed in 2025 that work-life balance has surpassed salary expectations in importance. Work is no longer merely an instrumental value (a source of income and means of survival)—it's becoming a way of self-fulfillment. At the same time, employment among people of retirement and pre-retirement age is growing. In OECD countries, the number of employed people aged 55–64 increased from 101,400 in 2018 to 111,500 in 2023. In Russia over the same period, the employment rate in the 60–64 age group rose from 31.8% to 41.2%.

Finally, the COVID-19 pandemic became a powerful accelerator of all processes taking place in the labor market. At its peak, the share of remote work in the U.S. soared from 3% to 35%, and after restrictions were lifted, the market not only retained but further developed new formats. In Russia, the number of remote workers grew from 30,000 in 2019 to 1.9 million in 2022, and this trend continues to strengthen.

The Scale of the New Reality

Assessing the scale of new forms of employment is quite challenging due to the lack of unified approaches. Nevertheless, available data provide insight into the dynamics of platform-based employment in Russia. According to HSE University, it grew from 4.6% in 2022 to 14.6% in 2024; the Ministry of Labor of the Russian Federation forecasts more than 15 million people employed on digital labor platforms by 2030—roughly a quarter of the working-age population. The number of self-employed is also increasing every year, and according to the Federal Tax Service as of July 31, 2026, it stands at over 17 million people. 

Meanwhile, freelancing remains the least measurable segment, with no precise data available. The Kwork platform publishes an annual open report summarizing user activity on its freelance marketplace. Among the major trends of 2024 that significantly impacted freelancers' work, Kwork analysts highlighted the development of neural networks and artificial intelligence (AI). Freelancers are actively using AI and neural networks in their work, especially for text-related tasks, design, video generation, and voiceovers (Figure 1). Entirely new services have also emerged, such as: creating presentations using neural networks, visualizing interiors and landscape design with neural networks, and generating music with neural networks.

According to Kwork specialists, the appeal of AI and neural networks and their integration into work processes can be explained by several factors:

• Lower service costs through process automation. Kwork compared prices for services using AI with similar services where freelancers don't use neural networks. They found that in many categories, the price of AI-enabled services differs significantly. For example, in the "Marketplaces and Classifieds" category, services are 2.58 times cheaper; "Presentations and Infographics" are 2.26 times cheaper; and "Personal Assistant" services are 2.11 times cheaper.
• Reduced completion time. Artificial intelligence accelerates the completion of various tasks, as it can process large volumes of information and data in a short time. For instance, in the "Text Typing" category, work completed with AI is on average 2.94 times faster; in the "Video" category it's 2.16 times faster; and in the "Art and Illustrations" category it's 1.97 times faster.

According to statistics, the number of freelancers on the platform has been increasing each year and in 2024 reached nearly 9.2 million people, with growth of 10.3% compared to the previous year (Figure 2).

To create an up-to-date portrait of service sellers on the platform, Kwork conducted a large-scale survey among contractors. The questions covered users' age, income, as well as their attitude toward the platform. The results showed that 36% of service sellers on the platform are young people aged 18 to 24, with users in the 25-30 and 31-35 age categories also accounting for a large share (17% and 19% respectively). People over 41 years old represent the smallest group on the platform (Figure 3).

When asked about income, 47% responded that freelancing is their only source of income. This means that for nearly half of the platform's users, freelance income is their primary source. 29% of respondents said that freelancing is a supplementary income source, and nearly the same number—24% of those surveyed—indicated that freelancing is their main but not sole source of income (Figure 4).

Looking at the customer profile on the freelance services marketplace, Kwork notes that 49% of all orders are placed by entrepreneurs, who use the platform to quickly and efficiently address pressing business needs. Additionally, nearly half of 2024 customers are repeat buyers of services on the marketplace. 

When asked about the main advantages of freelance services, buyers highlighted the following aspects: simplicity in solving tasks; speed and time savings; money-back guarantee for incomplete work; wide selection of services; trust in the platform; cost savings; contractor organization; minimal negotiations with contractors.

The Institutional Gap

However, the main problem isn't the pace of growth, but rather that the institutional environment can't keep up. Traditional labor market institutions—labor legislation, social insurance systems, collective bargaining mechanisms—were designed for the standard employment model. Under new conditions, they often prove ineffective or entirely inapplicable.

Institutional dysfunction manifests in several ways:

• Unregulated Legal Status of new workers (freelancers, platform workers).
• Lack of social protections or insufficient coverage by them.
• Weakening of collective representation and bargaining functions (unions have weak coverage of new categories of workers).
• Difficulties in administering taxes and contributions.

All these issues are particularly acute for platform workers and freelancers. Russia has no special regulation in this area, and employment relationships are often formalized as civil contracts, which deprives workers of labor protections. Meanwhile, disputes over algorithmic management—where platforms control workers through digital tools but bear no responsibility as employers—remain a legal gray zone.

How other countries regulate new forms of employment

International experience shows that countries are taking different paths, but a common vector is emerging—from reactive judicial settlement toward proactive creation of adaptive legal statuses—noted as a general trend (countries are gradually moving toward creating hybrid social protection systems and social dialogue mechanisms that allow legitimizing new forms of employment without stifling their flexibility). The European Union has adopted a directive aimed at improving working conditions for platform workers, and is consistently expanding their rights (contracts, transparency, predictability). France through judicial practice recognized Uber drivers as employees. Spain introduced the "Riders Law" (2021), requiring companies to hire couriers under employment contracts. United Kingdom introduced the "worker" category in labor law—an intermediate status between employee and self-employed that provides minimum guarantees (vacation, minimum wage) but not the full set of rights. Germany developed a code of conduct for crowdsourcing platforms focused on fair pay, respect, constructive feedback, and data protection. In the United States (California), law AB5 (2019) recognized gig workers as employees, but this was followed by attempts to overturn it through referendums (and currently the battle between states and platforms continues).

A telling recent case is Australia. The essence of the Australian solution comes down to introducing an hourly minimum payment for so-called "active time"—the period from when a courier accepts an order until its completion. The established rates vary depending on the type of transport, but in any case significantly exceed the national minimum wage. Importantly, this is actual law, not a recommendation: platforms are required to make supplementary payments if, over a 21-day period, a courier's average income falls below the established threshold. Equally significant is the second component of the reform—the insurance element. Now platforms are required to provide their couriers with a "reasonable minimum level" of insurance protection against workplace accidents. This is a direct response to a longstanding challenge, when gig workers found themselves outside the compensation system. Interestingly, this solution was not imposed "from above" and did not result from litigation. It emerged as the result of a joint proposal submitted by the transport workers' union and the platforms Uber Eats and DoorDash. This is an important precedent demonstrating the possibility of constructive dialogue and finding mutually acceptable solutions. Key players negotiate the "rules of the game," and the state arbiter gives these agreements institutional form. The next important aspect is the hybrid nature of the established norms. Instead of classifying couriers under the classic employee status, the Australian regulator introduced an intermediate category—"employee-like worker." This approach allowed for targeted regulation of the most acute problems (minimum income and injury insurance) while preserving the flexibility that constitutes the essence of platform employment. However, the law itself is designated as interim, and many of its details remain unspecified (exact amounts of insurance payments, waiting periods, and insurance policy structure have not been determined). 

What's Holding Back Institutionalization in Russia

To understand the depth of the problem, the authors conducted a series of structured academic-expert seminars in 2025 with two key groups participating: labor market professionals (HR specialists, regulators, lawyers) and young people directly engaged in new forms of work (on digital labor platforms, freelancers).

Both groups agreed on one thing: the level of institutionalization of new forms of employment in Russia is assessed as low or, at best, moderate. Professionals gave more conservative assessments—65% defined the level as "low." Young people were somewhat more optimistic: 30% low, 50% moderate [Nedospasova O.P., Nekhoda E.V., Gevorgyan O.I., Demidova D.K. (2026). New Forms of Employment in Russia: From Legal Uncertainty to Systemic Regulation // Economic and Social Changes: Facts, Trends, Forecast. Vol. 19. No. 2. Pp. 199–214].

But the main point isn't in the numbers—it's in how each group sees the problem.

Professionals perceive institutionalization as a "project": strategic, resource-intensive, requiring macro-level regulation. They identify criteria related to the share of employment contracts, legislative coverage, government investment, and the contribution of digital employment to GDP.

Young people see institutionalization as an "outcome": practical guarantees, accessible benefits, effective protection of rights, technological capacity. Their criteria are the percentage of benefits, the percentage of won court cases, and whether employers have modern technology.

This divergence is no accident. Professionals look at the system from above, young people from within. The former are concerned with architecture, the latter with working services. Key barriers, according to both groups, are legal uncertainty and a crisis of trust in the state. The state is perceived simultaneously as the main agent of change and as a source of systemic obstacles (bureaucracy, slow approval of laws, the gap between declarations and reality). Professionals add to the list the high speed of change, the difficulty of identifying all forms of employment, corruption, and the absence of a common vision of the market. Young people cite the lack of demand for institutionalization from workers themselves, fear of change, employers' unwillingness to take risks, and low digital literacy.

What to Do: From Uncertainty to System

The institutionalization of new forms of employment is a nonlinear process requiring simultaneous work both on creating formal rules and on ensuring their legitimacy in everyday practices.

At the strategic level, the following are necessary:

• legislative establishment of legal status for "new" forms of employment;
• adaptation of social insurance and pension systems;
• development of new methodology for labor market accounting and monitoring;
• stable and predictable taxation rules.

At the operational level:

• digital services for formalizing employment relationships and accessing benefits;
• consultation centers and educational campaigns;
• mechanisms for legal protection and dispute resolution;
• programs for improving digital literacy and retraining.

The issue of trust requires special attention. As long as the state is perceived simultaneously as both a source of rules and a source of barriers, any reforms will stall. To build trust, feedback mechanisms are needed—monitoring stakeholder opinions, crowdsourcing platforms for collecting proposals, and regular dialogue among regulators, businesses, and workers.

New forms of employment are not a temporary phenomenon or a deviation from the norm. The essence of new employment forms lies not in the "disappearance of standard employment," but in the labor market's transition from "a single stable state of standard employment" to "a dynamic equilibrium of multi-format employment combinations" and, accordingly, workers. This is therefore a persistent trend that will only intensify. The question is whether the institutional environment can adapt quickly enough to turn this challenge into opportunities—for workers, businesses, the economy, and the country as a whole.

This research was supported by the Russian Science Foundation (RSF), research project 25-28-00799 "Institutionalization of New Forms of Employment in the Context of Digital Economic Transformation," National Research Tomsk State University.