Workers without an employment contract: is it worth the risk or not?

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An employment contract is a written agreement between an employee and an employer, which specifies the rights and obligations of each party. The employer guarantees the employee a place to work, timely salary and conditions that comply with the Labor Code of the Russian Federation. And the employee, in return, fulfills his direct work responsibilities and follows the company’s rules.

GPC agreement (decoding - civil law) - an agreement between the contractor and the customer, under which they do not enter into an employment relationship. This agreement defines the work and its result, for which the performer receives remuneration. Examples of a GPC agreement: contract, provision of services, author's agreement.

What points should a contract with an employee include?

There is currently no unified form of the document in the legislation, however, a well-drafted and legally significant employment contract must include a number of mandatory clauses. The document must contain:

• all data from the employee’s passport and his full name;
• TIN of the entrepreneur and his last name, first name and patronymic;
• date of conclusion of the contract;
• date of the employee's first working day;
• the position for which he is hired;
• work schedule and rest schedule;
• payroll system;
• the possibility of financial compensation for work in difficult or hazardous conditions;
• all social guarantees required by law.

Pay close attention to the clause that describes the rights and obligations of each party: this will protect the entrepreneur and employee from labor disputes.

A universal employment contract, which contains all the necessary clauses, can easily be adapted to any situation. Therefore, it can be used as a basis for both entrepreneurs and companies. The format of the standard agreement allows the use of language that meets the requirements of Russian legislation.

Temporary contracts are usually drawn up in cases where personnel are required for a short period, for example, 1–2 months. They are often concluded by seasonal workers, agricultural workers, forestry workers, and construction workers.

When drawing up a fixed-term contract, special attention should be paid to the clause that stipulates the duration of the employment relationship. It is necessary to indicate the date of entry into force of the contract and the day of its end.

In addition, it is recommended to include a clause in the contract prohibiting the automatic extension of the employment relationship. Otherwise, it may happen that the contract has ended, the employee continues to perform his work function, and the entrepreneur does not conclude a new contract with him. In this case, it is considered that the fixed-term employment contract with the individual entrepreneur has turned into an open-ended one.

Subject of the contract: labor function / result

The subject of labor relations is the personal performance by an employee of his direct work duties for a salary . The labor function is defined in job descriptions in accordance with the qualifications and specialty of the employee. This is a workflow that runs every working day.

The subject of civil law relations is the result of the work or service of the performer . The customer must receive and accept the result within the period specified in the contract. In this case, the work process itself is not important for the customer, although, if desired, he can establish intermediate control.

The contract specifies a list of works that the contractor must complete within the agreed period. The contractor may involve other performers in the task if the contract does not provide for independent execution.

The basis on which the contractor receives remuneration is a bilateral act of work performed.

3. Documentation: work book or contract

To begin an employment relationship with an employee, you need to prepare a number of documents :

• employment contract;
• employment history;
• personal card;
• hiring order.

To work with a contractor, you only need to enter into a written GPC agreement . Each party leaves signatures on it. After the end of cooperation, the contract is closed with an act of completion of work (services rendered).

Sample civil contract

The Civil Code of the Russian Federation offers another version of the document regulating labor relations: a civil law contract (CLA). (Article 420 of the Civil Code of the Russian Federation) In such an agreement, the parties are the customer and the contractor. The task, terms of payment and deadlines for completing the work are clearly stated.

Consists in the following cases:

• contract;
• carrying out research, development and technological work;
• Paid provision of services;
• transportation, transport expeditions;
• agency;

Sample civil contract with an employee: in .doc format (Word file).

According to the GPA, the employee is engaged exclusively in the activities and the amount of work that are prescribed in the GPA, he cannot be subject to disciplinary liability, does not obey the work schedule, does not endure a probationary period, but immediately starts work. If an employee has doubts about the fairness of remuneration, his interests can be appealed in court, based on the terms of the document signed by both parties.

Mutual responsibility of the parties: employer and employee, customer and contractor

The employer is obliged to make the following payments in favor of the employee:

• average earnings for the period during which he was illegally deprived of the opportunity to work;
• compensation for damage to health and property;
• compensation for moral damage
• interest for late wages.

The employee, in turn, bears financial responsibility to the organization within the framework of his monthly earnings. For violation of discipline, he may be subject to a reprimand, reprimand or dismissal.

The customer of work or services is obliged to compensate the contractor for losses caused by improper performance of duties. The performer is responsible to the customer in the same way.

The contractor cannot be brought to disciplinary liability.

Internal labor regulations

Each full-time employee works at a time agreed with the operating hours of the organization itself . Therefore, he is obliged to work according to the company's rules. Come and leave work at the appointed time, have lunch and rest, and take technical breaks. Absence from work without a good reason is permitted only on non-working days: holidays and weekends established by the staffing schedule.

The full-time employee remains under the control of the employer throughout the working day.

Persons working under GPC agreements are not required to obey the customer’s internal rules . They do not obey the officials of the organization and its regulations.

The contractor can work at night, when the entire staff of the organization is resting, and sleep well during working hours. Weekends also do not affect the work process in any way. The main thing is to submit the result of the work on time.

Working conditions: workplace and materials

According to the employment contract, the employer provides the employee with proper working conditions . It highlights the work area, computer, tools, uniform, materials and instruments. Conducts safety training.

According to the GPC agreement, the customer is not responsible for the contractor’s workplace . The contractor himself selects and equips his workplace. The customer can transfer tools and materials for the work to the contractor, and then this is written in the contract. If there is no such clause in the contract, the contractor works with his own tools and materials.

Provision of services

Work under a contract or service contract is becoming more and more common. Typically, such an agreement indicates that someone provides a service and someone pays for it.

Typically, the employer will be the customer. The text of the document specifies all the conditions for the provision of the service, as well as the consequences that will occur if the agreement is violated.

The main advantage is high profits. Disadvantages include the difficulty of legalizing funds received and the need to pay taxes on your own.

Remuneration: regular or one-time

Employees on staff regularly receive salaries in the agreed amounts . According to the rules of the Labor Code of the Russian Federation, salaries must be transferred at least twice a month - an advance payment and the main part. For failure to comply with payment deadlines, the employer issues compensation to the employee. It is charged for each overdue day as 1/300 of the refinancing rate.

If an employee works properly and fully performs his functions, he cannot be paid a salary below the minimum wage. In 2020, the minimum wage increases to 12,130 rubles.

Employees under a GPC contract will receive remuneration when they provide the customer with the result of the work performed . So the contractor can receive payment even once every six months, if such a period was required to complete the order.

The GPA can include the delivery of work in stages or the payment of advances. Then the customer will pay regularly, after accepting part of the work performed.

pros

What are the advantages of working under a contract? The deadlines for completing certain tasks, providing services or labor are specified in the agreement. The citizen will know exactly how much and how exactly he will have to perform certain tasks.

Further, it is customary to highlight high wages as the main advantage. It is this point that often becomes the main motive for working without a work book. Workers want to receive decent wages, even without taking into account length of service.

https://www.youtube.com/watch?v=ytpressru

This concludes the description of the positive aspects of working without labor. The benefits of such work are called dubious.

Personal income tax and insurance premiums

The employer acts as a tax agent in both cases . He withholds and pays 13% to the tax office on a monthly basis from the salaries of employees working under any type of contract.

This does not apply to contracts concluded with individual entrepreneurs. Entrepreneurs pay taxes themselves. To avoid tax claims, ask the individual entrepreneur for documents about his status.

Both types of employees may qualify for tax deductions. True, contractors can apply to the customer for it only while the contract is in force.

For employees under an employment contract, the employer pays monthly insurance contributions in the amount of 30% of the salary - to the Pension Fund of the Russian Federation, the Social Insurance Fund and the Federal Compulsory Compulsory Medical Insurance Fund. Additionally, he is obliged to transfer contributions for insurance against accidents and occupational diseases at the rate applicable to the organization.

For employees under a GPC agreement, contributions must also be paid, but in a smaller amount . Contributions to the Social Insurance Fund in case of temporary disability or maternity are not accrued, and contributions for injuries are paid only if this is provided for in the contract. So 27.1% of the salary is transferred to the Federal Tax Service.

Contributions to the Pension Fund are paid in any case, and under any agreement, the pension savings of the employee or performer grow.

GPC and employment contract - the difference in the table

Here is a summary table: we have identified the parameters by which the two types of contracts differ from each other. Compare and decide when to enter into an employment contract and when to work according to the Civil Code.

Registration if the employer is an individual

The employee's record book is kept by the main employer throughout the entire period of employment. When concluding an agreement with a part-time worker, the new employer does not have the right to demand the presentation of the book, make entries in it and take it for storage. It is acceptable that the book contains no mention of a citizen’s part-time job.

According to the law, individuals who are not individual entrepreneurs have the right to become employers. But Article 66 of the Labor Code of the Russian Federation directly prohibits such employers from creating, maintaining and storing employee records. An individual employer is obliged to:

• make insurance contributions for the employee;
• register him in the system of the Pension Fund of the Russian Federation if the employee is hired for the first time;
• register the agreement with the local government authority at your place of residence.

The conclusion of an agreement is not a right of the parties, but an obligation. Such an agreement will later confirm that the citizen has insurance coverage to receive a pension.

The peculiarity of the work of remote employees is that they work outside the territory of the employer or its separate division. All communication with the employer of the remote employee is carried out using the Internet. Documents are exchanged via the Internet and then sent by mail.

A working agreement must be concluded with a remote employee and all provisions of the Labor Code of the Russian Federation apply to him. By agreement of the parties, it is established that the employer does not make a record of the citizen’s employment in his book, and does not enter it if the citizen is employed for the first time - this rule is established in paragraph. 6 tbsp. 312.2 Labor Code of the Russian Federation.

If a citizen, in addition to performing his main job, as well as part-time, receives education through correspondence education, then the compensation and guarantees provided for by the Labor Code can be provided to him only at his main place of work. In the same way, additional payments are made and benefits are taken into account for citizens operating in the regions of the Far North, as well as areas equated to them (Federal Law No. 185-FZ of July 2, 2013).

For students receiving education by correspondence, all guarantees and compensation provided by the state are provided only at their main place of work

In other cases, according to the Labor Code, a part-time worker is provided with all the benefits and guarantees provided for all employees of the enterprise (Federal Law No. 90-FZ of June 30, 2006).

• the right to a salary not lower than the minimum wage;
• the right to be included in the state;
• the right to social guarantees: salary (at least twice every month), vacation, guarantees for family workers, additional days off, overtime payments, etc.;
• the right to ensure labor functions: conditions for work, elimination of obstacles to performing work;
• the right to compulsory social insurance;
• developing work experience for retirement.

Disadvantages for the employee:

• he must comply with the work schedule. For violation, he may be punished, including dismissal;
• If the employment relationship is formalized by an individual entrepreneur, then he does not pay UST from his salary. Instead of the tax that the employer calculates and pays at a rate of 35.6%, the individual entrepreneur employee himself pays a tax of 13.2%.

Wages can be hourly or depend on the standards established for all employees of the enterprise

If a part-time worker is paid on a time basis, but with a certain standard for completing tasks, then the salary should be accrued to him for the work actually performed. For example, if an employee was supposed to produce five products in four hours, but produced ten, the employer is obliged to pay double wages.

Managers of companies that hire people without making an entry in the employee’s work book enjoy certain advantages:

• there is no need to include a specialist in the staff, offering him a permanent place of employment;
• the director has limited liability;
• no need to pay for vacation or sick leave;
• it is permitted not to pay mandatory bonuses assigned to all full-time employees.

But the absence of an entry in the employee’s book has some disadvantages:

• there is no possibility of bringing such a specialist to disciplinary liability for absenteeism or similar violations;
• it is impossible to completely control the work process, so employees often make mistakes, miss deadlines or take other actions that negatively affect the results of the company’s work;
• workers are often negligent in their duties.

Therefore, hiring workers on the basis of a GPC agreement is not always beneficial. During such registration, it is important to take into account the requirements of the law so as not to violate the citizen’s labor rights.

Work under a contract without a work book, in accordance with Part 6 of Article 312.2 of the Labor Code of the Russian Federation, is possible with remote employment, provided that the employee is employed for the first time (the employer is relieved of the obligation to issue a book). In order for the employer to realize this opportunity, a corresponding agreement between the parties is signed.

In this case, in accordance with Part 6 of Article 312.2 of the Labor Code of the Russian Federation, the main document confirming the employee’s length of service will be his copy of the agreement. Additional confirmation may be copies of orders for admission to remote work and dismissal issued by the employer. This conclusion can be drawn from an analysis of the provisions of Part 5 of Art. 312.1, part 2 art. 312.5 Labor Code of the Russian Federation. The employee organizes the recording and storage of such documents independently.

In accordance with paragraph 3 of Article 66 of the Labor Code of the Russian Federation, an individual who is not an individual entrepreneur does not have the right to make entries in employee books and register them for persons hired for the first time. A document confirming the period of employment with such an employer is a rental agreement concluded in writing (paragraph 2 of Article 309 of the Labor Code of the Russian Federation).

Individual entrepreneurs are not exempt from the obligation to make entries in this document in relation to each employee. This fact is confirmed by paragraph 1 of Article 309 of the Labor Code of the Russian Federation.

We invite you to familiarize yourself with: Insurance agents under MTPL: how to become one, how much they earn, and also how to conclude an agreement with a company and open a branch under “automobile insurance”?

Employers - individuals without the status of individual entrepreneurs can also enter into employment contracts. Such an employer does not have the right to make entries in the work book, or issue a new one. Thus, evidence of a citizen’s activities in this case is only his copy of the contract.

At the same time, the employer - an individual is also obliged to make contributions to the funds and issue an insurance certificate if such work is the first for the employee. The agreement can be concluded either for a certain period or be of an indefinite nature. Such an employer is obliged, in accordance with Art. 303 of the Labor Code of the Russian Federation, notify local authorities and register the agreement (at your place of residence).

GPC agreement: pros and cons

A GPC agreement is more beneficial for the employer, since it is easier to formalize work with a contractor than to hire an employee. And the costs for this are lower. For an employee, a GPC contract, on the contrary, is inferior to a labor contract due to the lack of guarantees and compensation. Let's look at the features for each side.

GPC agreement: advantages for the employee

Ease of design . To work under the GPC, you do not need a work book, a medical examination or a package of documents. For registration, provide the customer with a passport, INN and SNILS.

Low management control . The performer himself chooses what time to work and what time to rest. The main thing is to get the agreed result on time. The customer can control the work step by step.

Also, according to the GPA, the performer does not obey internal orders and instructions from management.

You can work in several places . Thanks to a free schedule and registration without a work book, under a GPC agreement you can work in several places at the same time.

Continuous work experience . The customer transfers insurance premiums to the Pension Fund and Compulsory Medical Insurance. Work experience while working under the GPA continues to be taken into account.

Employment without qualifications . The contract stipulates the result and its level. At the same time, the contractor’s qualification level does not have to be met if this requirement is not specified in the contract.

Possibility to attract assistants . The contractor under the GPC agreement is not obliged to do all the work himself. He can delegate the work and part of his remuneration to subcontractors, but is obliged to provide a high-quality result. But the contract may require the task to be completed independently, in which case you will have to work on your own.

GPC agreement: disadvantages for the employee

Lack of records in the labor record . The work book of the GPC contractor remains empty, making it more difficult for him to confirm his work experience. To do this, you can show the new employer the GPC agreement, the certificate of completion of work and the characteristics from the customer.

Unprofitable vacation . The phrase “He who doesn’t work, doesn’t eat” applies to the contractor under a GPC agreement. He receives reward not for the work process, but for the result. Therefore, it is not so profitable to get sick, go on vacation and relax on weekends and holidays.

Difficulties with lending . If a performer works only under GPC agreements, banks are not always ready to issue him a loan or mortgage. The reason is that income cannot be predicted. If you find creditors, the percentage will not be as favorable as for workers under an employment contract.

Lack of social guarantees during pregnancy or illness . Employees under an employment contract are insured in case of temporary disability or maternity. In case of illness, the employer will pay benefits for the entire period of sick leave.

Full-time employees are also paid for temporary disability to care for a sick child or grandfather, during follow-up treatment after hospitalization, or for prosthetics.

Full-time employees receive all benefits provided by law in the event of pregnancy and childbirth. Their amounts depend on average earnings.

GPC performers are not paid sick leave. Pregnant employees under GPC contracts will not receive anything from the customer in excess of the contract amount. Benefits will have to be registered with the social security authorities, and their size will be minimal, even if, according to the contract, the monthly income was 300 thousand rubles.

Lack of average earnings . To calculate any social benefits, the employee’s average earnings over the previous two years are important. When working under the GAP, contributions to the Social Insurance Fund are not paid, which means that the employee’s remuneration does not increase the average earnings.

During the subsequent transition to an employment relationship, earnings during work under the GPA are not taken into account. Sick leave, maternity and other benefits will be less than that of colleagues.

Lack of compensation in case of bankruptcy of the customer . If the customer goes through bankruptcy proceedings, contract employees will not be able to be included in the number of creditors, unlike full-time employees.

Possibility of terminating the contract at any time . The customer may terminate the contract at any time without giving reasons. But the contractor has the opportunity to go to court and recover his remuneration if the work was completed but not paid.

Liability for damage and poor performance . Employees under employment contracts are subject to disciplinary and financial liability. Material is limited to average monthly earnings. And if the damage is caused by the performer, he compensates for it in full.

According to the GPA, the contractor is responsible for meeting deadlines, and violation of them is subject to a fine. If the result of the work suffers before the work acceptance certificate is signed, the contractor is also responsible for this.

Vulnerability in case of an accident . If during the work for which the contract is concluded, the contractor is injured, he will not be able to receive benefits from the customer for the duration of treatment. If your GPC work is traumatic, write down in the contract a provision for sick leave benefits in case of injury.

No bonuses under the collective agreement . The employer can assign additional payments to full-time employees that increase their comfort and loyalty. This is financial assistance, payment for trips to resorts, payment for treatment, compensation for mortgage expenses, a voluntary health insurance agreement, etc. GPC workers are deprived of all these bonuses.

As you can see, the GPC agreement has more disadvantages than advantages in comparison with an employment contract. But this does not mean that such design should be abandoned. Instead of social guarantees, you get independence, a free schedule and the opportunity to combine jobs. Because of this, many people prefer to work under contract contracts.

Advantages of the GPC agreement for the customer

Possibility to refuse to conclude a contract . An employer cannot refuse to employ a candidate if there is no reason to do so. Applicants cannot be screened out based on skin color, race, location or age. The only measure is the employee’s business qualities.

According to civil law, the customer can refuse any applicant as a contractor without explaining the reasons. For example, if a company does not want to work with people over 55 years of age or citizens without registration in the city.

Ease of termination of the contract . The employment contract is concluded for an indefinite period. This makes it difficult to fire an unwanted employee. You need to give notice of layoffs at least two months in advance, and you need to pay compensation during the period of searching for a new job.

The contract with the contractor under the GPC agreement is always concluded for a clear period; after this period, the contract does not need to be renewed.

Unlimited number of contractors . The number of employees under an employment contract is limited by the staffing table. If the employer’s staffing schedule is established by higher authorities, it cannot be changed arbitrarily. Therefore, you need to adhere to the limit.

The customer can enter into a GPC agreement with employees whose positions are not on staff. This means that an unlimited number of employees can work outside the organization.

Saving on insurance premiums . For employees under an employment contract, the employer is obliged to pay personal income tax of 13% and insurance contributions to the Social Insurance Fund, Pension Fund and Federal Compulsory Medical Insurance Fund - 30% of the salary. Plus, it is necessary to make contributions in case of work-related injuries and occupational diseases at the rate for the main activity.

With a GPC agreement you can save a lot. When working with individual entrepreneurs and self-employed people, the customer does not have to pay either personal income tax or contributions. And according to the GPC agreement with individuals, a personal income tax of 13% and insurance premiums are provided. There is no need to pay accident insurance premiums if this condition is not specified in the contract.

Savings on the social package . An employee under a GPC agreement only needs to pay for the result. During the period of his vacation, illness or maternity leave, no compensation needs to be paid. And significantly more money is spent on full-time employees.

Saving on workplace organization . Typically the contractor works remotely. Therefore, he does not need an equipped workplace, uniform and tools.

The customer purchases consumables and tools if this is specified in the contract. If there is no such condition, the contractor purchases at his own expense.

Disadvantages of the GPC agreement for the customer

Registration of relations under a GPC agreement for the customer is almost a complete advantage. You can save money and organize your work conveniently. But there is still a drawback - limited control.

It is more difficult to monitor a remote employee, and it is almost impossible to understand the progress of a task. There is a risk that you will wait six months and not get results. To avoid troubles, provide for stage-by-stage delivery of work in the contract.

Re-qualification of a GPC agreement into an employment contract

Replacing an employment contract with a contract, although profitable, is risky. The law protects the interests of the employee, and the replacement of one contract with another leads to their infringement. If during the trial it turns out that the GPC agreement actually regulates the labor relations of the employer and employee, labor legislation will be applied to them (Article 11 of the Labor Code of the Russian Federation).

This also creates problems for conscientious employers. Many people work under GPC agreements, especially freelancers, and this is normal practice for work of an episodic nature. At the same time, even performers who have made presentations for the company several times can be recognized as employees and require requalification of the contract.

The name of an employment contract alone does not make it civil law: the content is more important. The Plenum of the RF Armed Forces issued a resolution in May 2021. It paid a lot of attention to the distinctive features of labor relations:

1. An agreement was concluded between the parties on the personal performance by the employee of a labor function predetermined in the contract under the control and direction of the employer.
2. The employee is subject to the employer’s internal regulations: instructions and instructions from management, labor regulations, and work schedules.
3. The employer provides proper working conditions.
4. The employee receives regular payment for performing a job function, and not the result of the work.
5. The employee's position is included in the staffing table and integrated into the employer's organizational structure.
6. The employer provides the employee with regular days off, rest on holidays and annual leave.
7. The employer pays the employee's work travel expenses.
8. The employer regularly makes payments to the employee, which are his only or main income.
9. The employer provides materials and tools for the contractor to perform the work.

The procedure for requalification of contracts is regulated by Art. 19.1 Labor Code of the Russian Federation. Civil law relations can be recognized as labor relations by:

• the customer upon a written application from the contractor;
• the customer, following an order from the State Labor Inspectorate (GIT) that was not appealed in court to eliminate violations of Art. 15 Labor Code of the Russian Federation;
• court as a result of the direct appeal of the performer;
• court as a result of a meeting on materials received from the State Tax Inspectorate and other authorized bodies and persons.

For example, Ship LLC entered into a GPC agreement with an individual on October 1, 2021. In December 2021, the court recognized the contract as an employment contract. Starting from October 1, 2021, the employment contract will come into force. From this date, the employee is entitled to all guarantees and compensation provided for by the Labor Code of the Russian Federation.

Only a court can reclassify an expired GPC as a labor license.

In the event of transformation of the GPC into a labor one, the organization will be held accountable for understating the base for insurance premiums. For the entire period of validity of the civil contract, additional contributions to the Social Insurance Fund and penalties on them will be calculated. The employee will be able to demand compensation and benefits from the company for all overtime, unused vacations and sick leave. Additionally, they may be required to recover compensation for moral damages for delays in payments.

If the employee’s salary during the period of work under the GPC was lower than the minimum wage for the constituent entity of the Russian Federation, he will have to pay extra.

Among other things, the employer can be held administratively liable and given a fine of 10 to 20 thousand rubles, and the organization itself - a fine of 50 to 100 thousand rubles. For repeated violations, officials face disqualification, and legal entities face an increased fine of 100 to 200 thousand rubles.

Additionally you will need:

1. draw up personnel documents: orders and personal cards;
2. make a record of work in the work book;
3. include the employee’s position in the staffing table if it is not there;
4. draw up an employee’s working time sheet, starting from the day the GPC agreement is concluded.

Let's figure out who can go to court with an application for recharacterization of the contract and what to do about it.

What documents does a citizen provide to an individual entrepreneur?

The employee is required to prepare a certain package of official papers:

• identification document;
• a document confirming the employee’s length of service (work book);
• you must have SNILS with you;
• citizens liable for military service must provide a military ID;
• TIN, the provision of which has become mandatory since 2016.

Various certificates from courses or a diploma of higher education, which are confirmation that the employee is a specialist in a particular field, will be useful.

It is possible to work without a work book only in two situations:

1. The activity is carried out for an individual who is not represented by an individual entrepreneur. Therefore, the relationship arising between the two parties is governed by the provisions of Chapter. 48 TK.
2. Part-time employment. Any person has the right to work in several companies. In one organization he is represented as a full-time employee, while in others he acts as a part-time employee, so he works no more than 4 hours a day. Such activities are regulated by the provisions of Chapter 44 of the Labor Code.

In all other situations, upon official registration, information must be entered into the specialist’s work book. The exception is the conclusion not of an ordinary employment contract, but of a GPC agreement. It is used if one-time work is required, which is limited in volume and time.

Attention! It is recommended to figure out whether it is possible to work without a work book before starting work, since if the employer does not require this documentation from the new employee, this may be regarded as a serious violation of labor rights.

Claims from tax authorities

Since 2021, the Federal Tax Service has been administering insurance premiums. She is interested in requalifying the GPC contract as a labor contract for the purpose of additional calculation of insurance premiums in case of temporary disability and in connection with maternity.

Most often, the tax office goes to court when an organization enters into a GPC agreement with an individual entrepreneur or self-employed person. Since these categories pay personal income tax and insurance premiums on their own, the organization does not assume the obligations of a tax agent and saves on taxes and contributions.

Recently, a fraudulent scheme has spread. In order to reduce payments, employers offer employees to register as individual entrepreneurs or self-employed and enter into a GPC agreement with them. In order to assess additional taxes, the Federal Tax Service applies to the court with a claim to recognize the GPC agreement as an employment contract.

Example: during an on-site inspection, the Federal Tax Service found out that the organization was working with individual entrepreneurs under GPC agreements in order to understate the tax base and receive benefits for personal income tax and VAT. At the same time, individual entrepreneurs were its employees and performed labor functions. In this regard, the tax authorities reclassified the contracts as employment contracts and assessed additional VAT, income tax, personal income tax, fines and penalties to the company. The executing entrepreneurs did not agree with this and filed a lawsuit. The courts of three instances rejected the entrepreneurs because the individual entrepreneurs worked in the organization’s office 40 hours a week, performed labor functions and did not pay rent. At the same time, individual entrepreneurs received monthly remunerations regardless of the amount of work performed.

So even the disagreement of the performers to requalify the contract does not protect against risks.

It is easier to defend your position if the GPC agreement is concluded with an individual, and not an individual entrepreneur or self-employed person, especially with the support of an employee. In court, he must declare that he himself wanted to enter into a GPC agreement with the organization, and not an employment agreement. Citizens have the right to freely dispose of their work and independently choose the procedure for registration - an employment contract or a civil law contract.

There are a number of other court decisions where employers were able to defend the GPA and prevent retraining. The tax authorities were not helped by their arguments. For example:

• The GPC agreement provided for work and services that were assigned to full-time employees of the company and corresponded to their job functions.
• Over the course of several months, an organization enters into an agreement with the same individual to perform one type of work or service.
• The performer who worked under the GPC agreement was later included in the organization’s staff.

The presence in the GPC agreement of one or two circumstances that are not typical for this type of relationship does not prove their labor nature. Evidence can only be a combination of several signs of an employment relationship.

In disputes between legal entities and the tax office, the Federal Tax Service often wins. At the same time, even drawing up an agreement with an individual entrepreneur or self-employed person does not always become a decisive factor.

A striking example: the court recognized the contract concluded by the employer as not a civil contract, but a labor contract, since it immediately provided for many factors indicating the labor nature of the relationship. These include personal performance of clearly defined job duties for a long period of time, compliance with internal work regulations and safety precautions. During this entire period, the performer receives a fixed remuneration twice a month and bears financial responsibility.

FSS claims

Contributions for injuries at work and occupational diseases are still administered by the Social Insurance Fund. Therefore, the fund is also interested in requalifying contracts, especially in organizations with high tariffs.

The FSS is extremely vigilant, so it often goes to court even in cases where the contract does not contain obvious signs of an employment relationship. Because of this, they are less and less able to reclassify the contract.

The contract must be drawn up carefully and competently. Any mistake increases the FSS’s chance of winning a legal dispute.

In one of the latest examples, the territorial branch of the FSS of the Russian Federation conducted an on-site inspection of the company and, as a result, assessed additional insurance premiums, penalties and a fine. The company entered into GPC agreements with the drivers, and the court reclassified them as labor contracts.

The fund believed that contracts with drivers are similar to fixed-term labor contracts; payments under them are a hidden form of salary and are subject to contributions.

The arguments were as follows:

• drivers received working transport and a garage;
• drivers received a regular salary in a fixed amount;
• the contract did not specify a specific scope of work (the parties were not interested in the result, but in the process);
• workers performed a labor function, and not one-time tasks.

The society tried to challenge the position of the FSS in court and received support in three instances. The courts proceeded from the fact that the contracts contained features characteristic of GPD: the presence of a specific type of service (driving a vehicle on the instructions of the customer), a fixed amount for the result of the service, the involvement of drivers as needed and not on an ongoing basis, no payments in the absence of orders .

However, in another similar case, the court satisfied the demands of the Social Insurance Fund for additional contributions.

The Supreme Court found that the organization entered into contracts with individuals to perform permanent, rather than one-time, work. It did not define a specific scope of work, and the relationship between the parties was of a long-term nature: for several years the contract was drawn up with the same person. In addition, the company provided the performers with a workplace, equipment and tools, and the work they performed regularly was paid twice a month. The staffing table contained a position with labor functions similar to the work performed by the contractor under the contract.

The court considered these circumstances sufficient to re-qualify the contract.

The FSS has a letter that it prepared for its territorial branches. The letter provides practical recommendations on the distinction between a civil process contract and an employment contract. These recommendations are still relevant today.

Orders and claims from regulatory authorities

Dissatisfied employees can contact the State Labor Inspectorate (SIT) with a complaint against the employer. The GIT can learn about violations of the organization not only from employees. Government agencies can report this: the prosecutor’s office, the police, the Federal Tax Service, and so on. If the State Tax Inspectorate finds out that the employer is hiding behind a civil process agreement instead of a labor agreement, it will issue him an order to eliminate the violation. The employer can either comply with it or try to appeal it in court.

There is no point in going to court if there really is a violation. If there is doubt about the nature of the relationship, the court interprets it as a labor relationship (Part 3 of Article 19.1 of the Labor Code of the Russian Federation).

Until January 1, 2014, the State Labor Inspectorate could not independently go to court with a demand to recognize the relationship as an employment relationship. Now the State Tax Inspectorate can conduct an inspection, prepare materials based on its results and take them to court with a claim to re-qualify the contract. In this case, the opinion of the employee himself is not taken into account. In this case, the court will study all the information and make a decision.

GIT does not often go to court to re-qualify contracts with individual entrepreneurs. The status of an entrepreneur implies greater security when working with customers and the possibility of not complying with internal regulations.

Legislative side of the issue