Russian trade unions proposed to insure citizens against unemployment at the expense of personal income tax

The Federation of Independent Trade Unions of Russia (FNPR) has proposed to amend the principle of paying unemployment benefits, for which it is necessary to create a new type of compulsory insurance against loss of earnings, reports RBC.

The authors of the initiative propose to finance payments at the expense of personal income tax. A letter with a proposal was sent to Deputy Minister of Labor and Social Protection Elena Mukhtiyarova by Deputy Chairman of the FNPR Sergei Nekrasov.

It is assumed that the new type of insurance should be mandatory and valid for all types of employment. According to the unions’ proposal, it would extend to total or partial loss of income due to such causes as the employer’s wage arrears, job loss, part-time work or layoffs.

According to the proposal of the FNPR, the new model will not imply an increase in the fiscal burden on businesses and citizens and should be financed through the redistribution of existing tax payments.

“Financing of insurance costs can be carried out, for example, at the expense of funds paid by employees in the form of 1–1.5 percentage points of personal income tax (PIT),” the letter says.

Formerly Ministry of Labor and Social Protection of the Russian Federation statedthat by the fall of this year, the unemployment rate in the country will increase significantly due to seasonal and behavioral factors. As of August 2022, unemployment remains at a historically low level of 3.9%.

June 30 Alexey Mironov, President for Operational Management of ANCOR HR Company declaredthat unemployment in Russia will rise to 7.8% by the end of 2022. However, he clarified that, according to one of the scenarios, employment recovery could begin in 2023. Mironov associated the increase in the number of unemployed with the departure of many companies whose personnel will market.