Every Fifth Russian Works for Free

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Every Fifth Russian Works for Free

Pravda.ru news
October 24, 2003

20 per cent of Russia's population is paid a "black" wage which means that 100 per cent of the income is illegal
This is the information obtained after sending notifications about the status of pension accounts to the population. Eight million people, obviously those who are paid "black" wages, have received the notifications informing the pension account status is zero for them. To be paid normal pensions, these people will have to be at law with their employees. But if these workers do institute legal proceedings against their employers they may lose not only their prospective pensions but also the present-day positions.

Last week, the RF Pension Fund finished printing of 42 million notifications to the citizens of Russia to inform them of the pension accounts status. Eight million of the notifications stated the pension account status was zero. Thus, the official statistics says that every fifth Russian is working for free. At that, the reported information is not final at all. Yesterday, RF Labor and Social Development Minister Alexander Pochinok said that as soon as the information on the status of pension accounts provided by the Pension Fund is analyzed, the number of people having actual "zero" pension accounts may even increase. The minister says these are going to be "huge figures". What is more, the RF Pension Fund does not have complete information because "many employers do not register their employees as workers."

The "zero" pension account means that citizens do not have savings to invest with a view of increasing prospective pensions at he expense of the savings and the investment. This situation may have drastically sad consequences for the youth: those who are to become pensioners in 30 years could have accumulated monthly pensions at the rate of 40 per cent of their wages if the wages were legally paid.

Yesterday Alexander Pochinok said that he hoped that as soon as people realize what they are losing they will have a stimulus to defend their rights.

According to the RF legislation, employers must pay at least the minimum wage to workers (last year it made up 450 rubles) and make deductions from the minimum wage for the Pension Fund. Otherwise it turns out that employers use free labor (which is prohibited by the law) and informs the Pension Fund about the fact himself. Lawyer Pavel Astakhov told GAZETA: "This is absolutely impossible according to the legislation. Employers must declare at least minimum wages of their employees. So, if 8 million people in Russia are officially working "for free", this is flagrant violation of the constitutional rights."

However, lawyers from the Consumer Associations Confederation say that the information about employers' deductions to the Pension Fund was lost through the fault of revenue inspections or the Pension Fund itself. But it is hardly likely that the trouble could have happened to 8 million people. In any case, it is necessary to appeal to local departments of the Pension Fund and present the income record over 2002 from all positions where people have worked legally, the information about the recent deductions made by employers to the Pension Fund and any other documents that may help prove the actual amount of income.
This may be a contract or a labor contract concluded between an employer and an employee, the document where the wage amount is fixed.

At the same time, lawyers do not expect that lots of employees will appeal to the Pension Fund and to court to find out the exact amounts of their accumulations on pension accounts. It is rather risky to institute legal proceedings against employers as in this case people may lose not only their prospective pensions but also the present-day wages, even those "black" ones. Pavel Astakhov comments: "According to the RF Labor Code institution of legal proceedings against employers cannot be used as the ground for dismissal. But it is perfectly clear that employers may invent lots of other reasons to dismiss those who are at law with them."

But the lawyer emphasizes that employees must choose the priority themselves: whether they prefer adequate pensions or job that cannot guarantee even the minimum of social guarantees. What is more, unfair employers will hardly go unpunished if at least one employee manages to go to court and proves that employer concealed the information about wages and did not pay the single social tax. If this happens, the court will oblige the employer to make all necessary payments from the concealed wages; the fact itself will attract attention of the Fiscal Police to the employer.