Russian law prevents homeless people earning an honest living
Legislation prevents homeless people from earning an honest living
22 November 2022
The “Noah House of Diligence” recently had their bank account blocked, so are unable to pay workers and provide for those who can’t work. How is employment organised at Noah, what does the 115-FZ law have to do with it, and what solutions are there?
In a recent YouTube video, the head of Noah, Emilian Sosinski, said that the organisation can no longer withdraw cash from their bank account.
On November 21, due to financial difficulties, Noah closed two centres in Moscow supporting people with disabilities. About 60 people lived in the shelters: 40 moved to a new location, but 15 went to live on the street.
How Noah’s aid system works
Noah is the largest charity network helping homeless individuals in the Moscow region. They house about 1,200 people in 22 shelters, or “houses of diligence.”
40% of Noah’s residents are able-bodied men. Some of these people are employed — they keep half their salaries for themselves, and give the rest to the organisation. These funds help Noah provide for those who are unable to work.
“The number of disabled individuals coming to us for help gradually grew, and it became impossible to survive solely on self-financing. Donations helped: we received about a million roubles each month. That was enough to keep us going. However, since the beginning of 2022, donations are only a third of what they were,” Sosinski says.
Noah had some reserves, so they were able to keep operating. With these savings, Sosinski predicts they would be able to exist for several more years.
115-FZ and blocked accounts
Noah’s client search for gainful employment on their own, without the organisation’s involvement. Most used to have their wages paid to them in cash, but gradually, employers switched to cashless payments.
“Employers are only willing to pay for work under a contract and cashlessly. To do that, there must be an organisation that is able to enter into those contracts and receive the money. So, we founded a sole proprietorship, through which all the contracts are made. Wages are transferred to the organisation’s bank account, where we withdraw funds, deduct taxes, and distribute them to the workers in cash,” explains Emilian Sosinski.
Russian banks are bound by Federal Law 115 (115-FZ) “On combating the legalisation (laundering) of criminal proceeds and terrorist financing” in order to monitor companies’ income and transactions. If a bank notices suspicious transactions, the account may be blocked — which is what happened to Noah.
What are “suspicious transactions”?
“They keep blocking and unblocking our account, but don’t let us withdraw money from it. All our houses are rented, and because the owners don’t want to associate their businesses with us, they won’t officially rent to us,” says Sosinski.
Noah contacted the management at a bank they work with. They checked the organisation’s spending and confirmed that all the funds go towards supporting industry homes. However, the bank still won’t allow Noah to work this way — it’s outside the legal scope.
The bank’s advice was that Noah officially employ their clients. But Sosinski said that arranging for the homeless to be self-employed is unrealistic. The main problem is alcohol and drug addiction: it’s forbidden to drink in the shelters, but at weekends residents can go out to drink.
“Suppose a person was drinking over the weekend and lost his or her ID,” says Sosinski, “it would take a month to get it replaced. All that time they won’t be able to work. And if they go on a bender, they need another person in his place who still wouldn’t be officially employed.”
Residents are often not ready to quit drinking. Noah tried to hold Alcoholics Anonymous meetings but had no results.
Sosinski also cites the example of the state adjustment centre. A few years ago, he says, they tried to start a formal employment programme for homeless individuals there.
“They phased out the programme after six months due to a lack of results. After only six months, they realised that the homeless could not work under our labour laws.”
How is it organised for others?
In order to understand how other organisations arrange employment for homeless individuals, ASI contacted Lana Zhurkina, director of the Moscow centre “Dom Druzei” (House of Friends).
The centre partners with companies that are willing to employ Dom Druzei’s clients. If all goes well during a probationary period, they are offered a position on the staff. For instance, a cleaning company turned to the centre in search of employees.
“Of course, no one will immediately and officially take on someone who has ‘come out of homelessness.’ We ourselves understand that this is because official employment imposes a lot of obligations on the employer and taking on someone you don’t know — that’s scary,” according to Lana Zhurkina.
In their case, relationships between prospective employers and the organisation’s clients are conducted directly between the two. Dom Druzei acts only as a guarantor of reliability — for both parties. Once the individual finds employment, they can stay at the centre until they have saved enough to rent an apartment or bed.
Dom Druzei’s residents have a “common pot.” As a rule, contributions to the shared fund are optional. The collected donations are spent on general needs — used if the centre runs out of food, or to buy something extra for dinner, for example.
“There are former clients who are now fully employed and have moved out, but still transfer as much as they can to our account as a sign of gratitude. There are also some who lived with us, left, but come for first aid treatment — they also contribute to the ‘common pot.’ They know who gets the money, and why they need it,” says Lara Zhurkina.
According to Sosinski, such a system would not suit Noah. Firstly, Dom Druzei’s clients do not have to provide for others — they can spend money on their own needs or save up. Meanwhile, Noah’s
residents must work for those who can’t provide for themselves.
In addition, other charities’ experiences are not applicable to Noah due to the scale of its work, says Sosinski.
Noah’s leader is confident that “there’s no question that it’s realistic to arrange employment for a few people in half a year. But we have more than a thousand residents, and any organisation that talks to us about finding official employees only needs a few people.”
Recently, Noah won a grant competition from the mayor of Moscow. But even this money is not enough to operate 22 houses of diligence.
“We work openly, ready to show where and on what we spend money. Yes, according to the letter of the law, this is a violation. But the laws are not tailored to the homeless. As a result, they are left to exist by simply reaching out — begging on the street,” explains Emilian Sosinski.
The director of the organisation believes that for now the only way to solve the problem is to develop new financial verification processes, then allow the organisation to work as before, taking people off the street.
The ideal solution is to change the general legislation concerning the homeless. According to Russian law, homeless individuals are recognised as persons in need of social services. They can receive medical and legal assistance, as well as other services.
“Our current legislation does not suit the homeless. It does not allow them to earn an honest salary because of their living situation,” concludes Sosinski.
Translated by: Spencer Michaels