Nepotism is a form of corruption in which individual personal interests based on kinship (property)are opposed to the public, the state and other interests through the abuse of official position. Thenegative influence of family relations on the objectivity and impartiality of job duties, and the quality ofperformance, as well as conflicts of interest and the availability of their settlement with the participationof employees are the reasons contributing to the need for legal regulation of counteraction to nepotismin the employment relationship. This legal institution had a long history of its existence. However, withthe introduction of the 2002 Labour Code of the Russian Federation it was eliminated from the area oflegal regulation. Meanwhile, nepotism continued its development in the relations connected with therendering of state and municipal services, and it has caused necessity and legal basis to meet urgentneeds arising in the recovery of the updated institute of counter-nepotism in labour relations. Therelevance of this legal institution is on the one hand due to the omnipresence of corruption offenses, inconnection with which all spheres of social relations, including labour relations, are prone to corruption,and require appropriate measures for its prevention and combating. On the other hand, it is in theframework of labour relations there are fertile soil for the emergence and development of nepotismas a form of corruption. However, the current legal regulation of counter-nepotism institute in sphereof labour relations seems fragmented, contradictory and contained conflict of laws, which createscauses for the existence of preconditions for rejecting its application in practice. These circumstanceshave a negative impact not only on the effectiveness of countering nepotism in labour relations, butalso in the overall quality and effectiveness of the work done to combat corruption as a whole. The research enables to come to a conclusion about the imperfection of the legislation in this sphere ofsocial relations and the need for its improvement.