Social mechanisms for regulating labor relations in the digital environment

Dekhanova Natalia Gennad'evna ORCID: 0009-0004-8784-4309 PhD in Sociology Associate professor, Department of Sociology of State Administration, M. V. Lomonosov Moscow State University 119234, Russia, Moscow, Leninskie Gory str., 1, p.33, office 503 ndehanova@mail.ru Other publications by this author

Kholodenko Yurii Aleksandrovich PhD in Economics Associate Professor; Department of Sociology of Public Administration; Lomonosov Moscow State University 119234, Russia, Moscow, Leninskie Gory str., 1, p.33, office 503 hol.u@mail.ru Other publications by this author

Introduction. A modern state is a social state whose main goal is to ensure a high standard and quality of life for its citizens, protect their social rights, and support vulnerable segments of the population. It is based on the principles of social cohesion, social solidarity, social equalization and social justice, which are implemented in a market-based economic system based on economic freedom and aimed at making a profit and achieving financial success. Their practical implementation is provided by a mechanism for implementing the active regulatory role of the state, which performs its functions in the context of profound, often contradictory, changes affecting the foundations of social reality and which we are witnessing.

One of the most important social functions of the modern state is the regulation of social and labor relations, ensuring effective employment and combating unemployment. The state, as a regulator, legitimizes the processes related to social and labor relations. It forms the "rules of the game" on the basis of which labor purchase and sale relations are built, and ensures control over their implementation. In addition to the state, there are numerous institutional regulators in the social and labor sphere, which have varying degrees of influence on social and labor relations.

In the context of digital transformation, the labor sector is developing dynamically. The structure of employment is changing, new types of work are emerging, and with them new risks of increasing unemployment, expanding the scale of shadow employment and its marginalization. In the digital environment, the mechanisms of institutional regulation of social and labor relations are being transformed taking into account new realities. The active introduction of modern digital technologies leads to changes in work processes, automation and robotization of production, professional structure, and the emergence of new forms of employment. It is obvious that the delay in the institutional regulation of new forms of labor activity is fraught with a deterioration in working conditions for such workers on the part of employers ^[1]. With the increase in the number of employees engaged in remote work, this problem is becoming more relevant. Accordingly, in the digital environment, the mechanisms of institutional regulation of social and labor relations are being transformed, taking into account profound social changes in the labor market.

Theoretical discourse. The formation of the information society and the transformation of knowledge and information into a leading force and the main resource of social development have had a serious impact on the labor market and the nature of social and labor relations, as well as regulatory institutions and mechanisms of social control over this sphere of human activity. The use of modern digital technologies and the formation of a digital environment adequate to the needs of society and the state have led to a change in the structure of demand for labor and the emergence of new forms of employment. Their features, advantages, and risks are increasingly being studied by Russian and foreign scientists^[2,3].

Special categories of workers have appeared on the labor market – freelancers and the self-employed. Most of them work using modern digital technologies. Such Russian scientists as T.O. Razumova and N.M. Kirsanova ^[4], E.S. Sadovaya ^[5], E.A. Sverdlikova and A.S. Selezneva ^[6] and others deal with the problems of the formation and development of this form of employment. Special attention is paid to platform employment and employment using mobile applications, as well as the regulatory role of digital platforms and services. Some aspects of this problem have been studied in the works of I.N. Myslyaeva ^[7], A.V. Markeeva and O.V. Gavrilenko ^[8,9], F.I. Mirzabalayeva and O.V. Zabelina ^[10], N.V. Chernykh ^[11] and others.

The digital transformation is exacerbating the problem of informal employment. A.N. Pokida and N.V. Zybunovskaya ^[12], D.M. Kamari ^[13], E.N. Sindyashkina ^[14], M.G. Khokhlova ^[15] focus on this aspect of changes in the social and labor sphere. The active introduction of modern digital technologies generates a new type of social inequality – digital inequality, which is becoming one of the social risks for the labor market in the digital environment. The works of K.N. Gorlov ^[16], N.G. Osipova^[17], and A.S. Smirnova^[18] are devoted to the influence of digital inequality on employment and its structure.

The results of the study. In the digital environment, companies with rigid hierarchical management systems and limited horizontal connections between departments and specialists are finding it increasingly difficult to adapt to the demands of the modern market. They are required to be much more flexible and able to respond quickly to new development trends, including in the field of social and labor relations. The use of modern digital technologies allows them to collect, accumulate, store and process large amounts of information in a relatively short time. This, in turn, has opened up opportunities for businesses to actively introduce new ways of organizing work that allow them to quickly respond to market demands and respond effectively to them.

The digital transformation of socio–economic processes is expanding the use of the Internet for the development of new forms of employment, including using mobile applications, for remote work (at home, on the client's territory, in any other place, including even in another country). This allows an employee to perform their work duties outside the organization using the Internet. In 2024, 86% of Russian households had access to broadband Internet ^[19]. This expands the scope of new labor practices, including the transition to remote work and subcontracting for multiple customers. Internet usage often transforms a favorite hobby into an effective and highly profitable business project.

There are various labor practices that are associated with the use of the Internet space and modern information and computer technologies. These include remote work, platform employment and mobile employment, and freelancing. In addition, shared forms of employment, as well as outsourcing and outstaffing, are becoming more widespread.

Remote employment is understood as a work activity carried out by an employee outside the office. Its peculiarity lies in the fact that it does not always involve the widespread use of modern digital technologies and the possession of appropriate competencies. In some cases, the Internet is used only as a means of communication. However, the active development of distance employment is primarily due to progress in the field of ICT. In the context of the COVID-19 pandemic, it was those structures that actively used digital technologies in production and logistics processes during the pre-pandemic period, using the potential of remote work, that acted most effectively.

Remote employment has a number of advantages for both employees and employers. These include reducing the time employees spend traveling to their place of work, saving on transportation costs, and allowing employees to allocate working hours at their discretion and work in a comfortable environment. In turn, companies have the opportunity to reduce the cost of renting office space, paying staff and cleaning services.

Remote work carried out using the Internet often acts as a form of traditional social and labor relations (full, incomplete, shadow). In turn, platform and mobile employment refer to innovative methods of organizing work activities that allow performing various tasks through specialized digital platforms. The emergence of digital platforms opens up opportunities for the organization of work in the virtual space, leaving a wide field of issues of regulation of relations between subjects. A digital platform is a special organizational structure built on a network principle and providing mutually beneficial interaction between autonomous producers and consumers of goods and services. Its purpose is to organize communication between users and facilitate the exchange of goods and services in a digital environment. The digital platform minimizes the costs associated with the location of partners, their number and communication time, increases the efficiency of economic activity by reducing logistical costs and establishing direct business links between producers and consumers of goods and services. Platform employment is an important area of employment, which, being flexible, performs many important functions in the context of the digital transformation of the labor market. Thus, I.N. Myslyaeva highlights such advantages as easy entry, which does not require investments; access to a wide audience of customers; flexible employment, the ability to quickly earn "live money"; lack of strict government regulation; relative economic freedom; free schedule; the ability to choose clients and orders yourself; the ability to quickly receive payment ^{[7, p. 30]}.

At the same time, a number of researchers note the contradictory consequences of the activities of digital platforms that destroy traditional business practices, including in the social and labor sphere ^[20]. O.V. Gavrilenko and A.V. Markeeva emphasize that "the result of the lack of an effective system of state regulation and public control over digital platforms may be their transformation into an independent instance of social control with virtually unlimited power over the modern mediatized world" ^{[8, pp.30-31]}. In turn, N.V. Chernykh draws attention to the tendency towards the gradual erosion of the standard model of labor relations and the externalization of employment, when an increasing amount of work is moving beyond the formal boundaries of the employing organization ^{[11, p.106]}.

Digital platforms are used in various fields of economic activity and for various purposes: for communication; to sell goods and provide services; to find a client or customer; to mediate in the field of labor. Due to the increasing socio–economic dynamics and constant changes in market conditions, as well as the need to ensure continuous access to up-to-date information, platform owners are developing mobile applications that allow the platform to be used at any time, regardless of location. This gave an impetus to the development of remote work using mobile applications, when an employee is away from the office and is ready to start work at any time. An example is the YandexGo application, which combines many services from Yandex. One of them is the Yandex Taxi service, which is a platform for interaction between a taxi driver and a customer. The taxi driver, having constant access to the platform through the mobile application, independently determines the schedule and intensity of work, and his income will depend on the number of completed orders.

In the digital environment, platform employment is becoming more widespread. Research shows that interaction through platforms is already very popular. Thus, according to estimates by the International Labor Organization, the number of digital platforms has increased many times over the past decade. At the beginning of 2021, there were about 800 platforms operating in the world ^[21]. They are increasingly being used for work. The scale of employment on digital platforms is growing rapidly. For example, in Russia, in two years, from 2021 to 2023, platform employment increased by about 2 times ^[22].

A form of work activity such as freelancing is closely related to platform employment. Freelancing is a relatively new form of employment, the distinguishing feature of which is that in the labor market a freelancer acts as a private individual who is not a full-time employee of the company he works for. At the same time, his employment relationship with the employer can be both systematic and temporary. They are based not on an employment agreement, but on a civil contract. But first of all, it is a relationship of trust based on the principle of "trusted client/customer". Therefore, a freelancer must have not only a high level of professional training, but also qualities such as adaptability, openness, and discipline. In addition, the results of a number of studies show that freelancers have the necessary competencies to work with modern computer technologies ^{[4, p.66]}.

Freelancers, being highly qualified specialists, usually work in such sectors of the economy as education, management, advertising, marketing. A significant number of them are directly employed in the information sphere. They are engaged in data processing, programming, design, and work with audio and video using modern digital technologies. According to the World Bank, there were over 1.5 billion freelancers in the world in 2023. Almost 70% of them were young people between the ages of 18 and 35. Most of them have university degrees^[23]. In Russia, freelancers are increasingly registering as self-employed; by the end of 2024, their number exceeded 12 million people ^[24].

New to the Russian labor market are such types of employment as outsourcing and outstaffing. They are increasingly used in business relations between organizations. In both cases, we are talking about attracting specialists external to the customer to perform specific tasks. Outsourcing is used in various fields of economic activity, mainly in the service sector: catering, accounting and auditing, cleaning of premises, legal services. Active implementation ICT has led to an expansion in the use of outsourcing in the IT sector: the company assigns the creation and maintenance of computer and digital systems to third-party organizations specializing in this field. This is rational, as it does not require large-scale investments from the company in measures to maintain its digital infrastructure.

The difference between outsourcing and outstaffing is that in the first case, the customer assigns another organization to solve a specific task within a certain time frame, and it doesn't matter who performs it or how; the main thing is a high-quality and timely result. In the second case, it is assumed that employees working in the same company and specializing in solving certain tasks will be transferred to the staff of the partner company. Outsourcing also assumes that the customer can "borrow" employees from another company for the duration of a specific task. However, with outstaffing, the contract is usually concluded for a long time, and sometimes it can be indefinite.

Like freelancers, companies need constant access to up-to-date information about the state of markets, including the labor market, in order to maintain effective contacts with partners and respond in a timely manner to their needs and fluctuations in market conditions. Modern digital technologies contribute to these processes. Therefore, this direction in the development of employment in the modern information society should be considered as promising.

Sharing forms of employment include ways to organize work together. The most common are job sharing and staff sharing. Job sharing involves dividing one workplace between several employees. It is used primarily as a measure to create flexible working hours for employees, and in some cases, to increase employment and improve the company's performance. In countries where this form of employment is not identified as a separate type, it is referred to in the employment contract as part-time work. Its advantage is the creation of conditions for the exchange of knowledge and experience between employees, and ultimately – the accumulation of human capital of the company and the growth of its competitiveness.

Employee labor sharing, or staff sharing, implies the joint use of labor by companies. This means that several firms hire the same employees and use them to solve certain tasks. At the same time, employers are equally responsible for employees, as employees are responsible to each employer. Staff sharing allows companies to reduce employee costs and be more flexible in planning and allocating work responsibilities when implementing specific projects. For employees, this form of employment creates an opportunity to maintain income when problems arise for one of the companies, and in some cases, if one task is divided among several employees, reduce working hours and establish a more comfortable work schedule. The use of advanced information technologies in labor practices is expanding the scope and scale of use of shared forms of employment.

New forms of employment are closely related to the redistribution of working hours. They are characterized by flexibility and the ability to adapt to a dynamically developing labor market. Their active use is made possible by modern digital technologies that make it possible to collect and process large amounts of data, establish and develop partnerships with numerous market participants, and coordinate interactions with them regardless of location. At the same time, the role of informal factors such as partners' trust in each other and willingness to take on certain risks has increased. However, a number of problems still remain unresolved, so developments in the field of regulatory regulation of new forms of employment continue and are even being updated. Moreover, new ways of organizing work are quite attractive, and an increasing number of companies are introducing similar labor practices.

The profound changes taking place in the social and labor sphere as a result of the use of modern information technologies in the economy and everyday life, the emergence of new types of employment, require the development of new institutional mechanisms to regulate social and labor relations adequate to the dynamically developing digital environment. Digital transformation stimulates the development of non-standard forms of employment based on the Internet, the transition to remote work, to work based on a flexible schedule, enhances its creative, creative nature. At the same time, the digital transition complicates the situation on the labor market, creates new risks for the social and labor sphere and its regulatory institutions, primarily the state.

First of all, the digital transformation of the labor market is becoming one of the main factors contributing to the expansion of the field of application of informal labor practices and an increase in the scale of informal employment outside the sphere of state control. As M.G. Khokhlova notes, modern digital technologies "provide remote employment and make it possible to meet increasing human needs in a more comfortable environment not regulated by strict labor regulations" ^{[15, p. 139]}. Informal employment is constantly evolving and adapting to changes in the labor market. Recently, this process has accelerated significantly. Thus, according to Rosstat research, the growth dynamics of shadow employment in the Russian Federation tends to accelerate. The number of people employed in the informal sector increased from 11.6 million to 14.8 million, or by 15.6%, from 2006 to 2021 ^[25]. Being outside the sphere of the "sovereign's eye", informal employment creates additional social risks for government agencies, including criminalization of the social and labor sphere, reduction of state budget revenues, creation of additional difficulties for social insurance and pension systems, actualization of the "free rider problem".

We have already noted earlier: "Currently, institutions regulating social and labor relations are focused more on traditional forms of employment. They involve full-time employment, a clear schedule, as well as tightly regulated labor relations, including a contract between employers and employees, which contains the obligations and responsibilities of the parties related to pay and working conditions, labor duties, providing social guarantees to employees, etc. The state acts as a guarantor of the parties' fulfillment of the concluded agreement"^[26]. At the same time, one of the key problems of regulating and controlling new forms of employment using modern information and computer technologies, including those based on digital platforms, is the uncertain and unstable nature of the resulting labor relations. Regulation of new forms of employment occurs only within the framework of relations between direct participants. For example, Yandex Go offers a set of conditions under which a taxi driver has the opportunity to rent a car from the company's taxi company, a free work schedule, insurance during the trip, constant communication with customer support, access to a mobile application for tracking orders. For this, a commission of 18 to 24% is charged on each order. Social guarantees from the company are not provided. Since a taxi driver is responsible for his own income and work schedule, he is in no way immune from too low incomes and uncomfortable working conditions. At the same time, Yandex Go simply offers the driver a platform as a convenient way to communicate with customers, Should the platform provide him with additional social guarantees, because there is, in fact, no employment contract between an employee and an employer, and it is impossible to apply labor law norms to this relationship? The question is not an easy one, there is no definite answer to it.

It seems that the development of mechanisms for state regulation of platform employment is becoming an increasingly urgent problem. In addition to the interest in ensuring the tax base on the part of those employed on the platforms, the state, which implements its social functions, should be interested in reducing social tension and social inequality by providing social guarantees to all its citizens. Obviously, the rights and duties of an employee must be regulated and protected. Meanwhile, for many people employed on digital platforms, separate social guarantees are not available. This applies to medical and pension insurance, annual paid leave, etc. Companies that own digital platforms believe that their main task is only to provide a platform for work, and employees who use platforms for work must independently solve the problems they face. Therefore, they are unwilling to assume obligations to protect and insure the people who work on these platforms.

Since insurance premiums are voluntary for those who work using digital platforms, most of them do not pay them. However, it should be borne in mind that often platform employment is not the main source of income for employees, but an additional source of income, therefore they are included in the compulsory social insurance system. Moreover, the results of a study conducted in 2022 by HSE specialists indicate a negative attitude of those employed on digital platforms towards government attempts to create mechanisms for legal regulation of this type of activity, noting "relative economic freedom" as a special value ^{[27, p.25]}.

In our opinion, certain government regulatory measures can be applied to platform employment. However, the question remains to what extent and to which digital platforms certain forms of regulation and control should be used. The experience of the European Union countries can be useful here, where if facts are discovered indicating the control and management of an employee by an employer, his relationship with the platform will automatically be recognized as labor. In this case, he gets access to basic social guarantees. In addition, he will not be able to be dismissed or suspended from work by decision of an algorithm or an automated system – "human control" in such cases will be mandatory ^[28].

The need to adopt such a regulatory legal act in our country is obvious. However, the work ahead is long and difficult. It requires the development of compromise and non-standard solutions. Currently, in our opinion, it is possible to ensure the regulation of platform employment by transferring performers to the category of individual entrepreneurs or self-employed. There is a generally positive experience in regulating self-employment in our country. At the moment, a special tax regime has been introduced for self–employed citizens - a tax on professional income. Individuals who have switched to a special tax regime can pay tax on income from independent activities at a preferential rate of 4 or 6% ^[29]. This measure made it possible to withdraw some citizens from the sphere of shadow labor and legalize their incomes. This tax system operates experimentally until 2028, but the positive effects of its introduction are already evident. First of all, budget revenues have increased: about half of the self-employed did not pay income taxes before switching to a special tax regime. In addition, obtaining official status creates additional economic opportunities for this category of employees. The income of professional income tax payers allows them to obtain loans and visas. They have the opportunity to work with large companies, as well as make contributions to the Social Fund of Russia ^{[10, p.591]}. So, in 2024, the amount of the pension insurance contribution for the self-employed amounted to 50,798.88 rubles ^[30]. However, there is no official data on the number of citizens who have used this mechanism for forming future pensions. Of course, some of the self-employed are officially employed as employees and employers pay mandatory insurance premiums for them. Nevertheless, the time will come when the Russian state will face the problem of increasing the scale of social pension payments and healthcare costs that are not supported by an appropriate financial base.

Thus, the tax regulation of self-employment allows freelancers registered as self-employed to fully participate in the economic life of society, and the benefits and guarantees provided by official status can attract even more citizens interested in legalizing their work in this area. However, tax accounting and official status do not solve other problems associated with this form of employment. We are talking about legalizing the relationships of the self-employed with customers, a significant part of whom prefer oral agreements. Partners are not always conscientious towards each other, unreasonably revise the deadlines for the implementation of projects and delay the payment of completed works. In these circumstances, reputation and trust begin to play a significant role in the relationship between the freelancer and the client, rather than a formal law.

As for outsourcing and outstaffing, the mechanisms of their institutional regulation in Russia are not so much regulatory as restrictive. These concepts are not fixed in regulatory legal acts; instead, the concept of borrowed labor is used, which characterizes outstaffing to a greater extent. For the legal implementation of borrowed labor, organizations must overcome high financial and administrative barriers. These include fairly high requirements for the company's authorized capital (at least 1 million rubles); the director general of the organization has the appropriate qualifications in the field of personnel management, as well as work experience in the field of employment or employment promotion for at least 2 of the last 3 years. In our opinion, the state should pay attention to these forms of work and propose regulatory measures adequate to the dynamics of changes in employment and social and labor relations.

Conclusion. Due to the imperfection of regulatory mechanisms for new forms of employment in the digital environment, they are in less stable conditions than traditional forms of work. The already mentioned disadvantages of platform and self-employment generate many social risks associated with lack of social guarantees, low level of social security and income instability. Despite the risks and some difficulties caused by digital dynamics, the government is trying to form institutional mechanisms for regulating new forms of employment related to the use of modern digital technologies. Given the opportunities offered by new forms of employment and the popularity they are gaining, it can be assumed that work on their formalization and attempts to place them under state control will continue. Finally, this activity is important from the point of view of implementing the principles of a welfare state that guarantees the provision of social rights and social security of citizens, including in the field of social and labor relations.