Civil contract with an employee for the provision of services

Every successful company hires employees sooner or later. If you fill them out improperly, you can be subject to sanctions and owe the employee a large sum. The law offers several options for formalizing relations with employees, from which the employer can choose the appropriate one. First, let's understand the terms.

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.

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).

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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.

Types of agreement

The most popular and frequently used DHPCs are:

• for the provision of services;
• for the performance of work (contract);

But this is not all, since in fact there are other types, including:

• DHPC orders, meaning that an individual must carry out an important order, task or provide a service;
• DHPC for work in the field of science and research, technological and design work. This type may include both work and the provision of services;
• A commission agreement, concluded in the provision of services, for example, the sale of products of the principal.

This type of agreement requires a separate and more detailed consideration, so only the differences between agreements for the performance of work and the provision of services will be described below. Their key difference lies in the form of the result, which can be tangible or intangible.

Important! The material form involves the creation of a thing, its repair and processing, and the intangible form involves certain actions in favor of the party to the contract. In appearance, the agreement to perform work is a contract, and to provide .

There are also differences in attracting third parties to perform work or services:

• In the agreement to carry out work, it is possible to involve them and hire subcontractors, unless this is prohibited in the prescribed paper.
• The provision of services involves personal performance of actions. The contractor may involve other persons to provide the service; if this is not prohibited, then he himself will be responsible for the result.

Main types of DHPC - provision of services and performance of work

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.

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Video on the topic “Employment agreement, contract”

• Labor law. Work, employment contract, dismissal. Lawyer's answers
• Interview. Labor relations

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.

GPA for work between individuals - what are its consequences?

The Civil Code of the Russian Federation does not prevent the conclusion of a civil contract between individuals. However, a number of questions arise here regarding who is responsible for paying taxes on the income received by the executor. Let us recall that each of the parties to such an agreement may be an individual entrepreneur, and due to this, the following options for the parties to the agreement are possible:

• both of them (the employer and the contractor) are individual entrepreneurs;
• the employer is an individual entrepreneur, and the performer is an ordinary individual;
• the employer is an ordinary individual, and the contractor is an individual entrepreneur;
• both of them are ordinary individuals.

In the first option, the relationship is the same as between legal entities or between a legal entity and an individual entrepreneur, i.e., everyone pays the taxes required for him, and the amount of payment under the GPA is a regular settlement between counterparties.

In the second option, the individual entrepreneur, in relation to income paid to an individual, is the payer of insurance premiums and the tax agent for personal income tax withheld from this income.

In the third option, the individual employer does not impose any taxes on the income paid to the individual entrepreneur. The latter makes all the necessary payments from his own income.

And with the fourth option, both parties have a need to make tax payments and prepare reports:

• for the contractor - in relation to the tax on income received, since the individual employer is not included in the number of tax agents (clause 1 of Article 226 of the Tax Code of the Russian Federation);
• from the employer - in relation to insurance premiums from this income (subclause 1, clause 1, article 419, clause 2, article 420 of the Tax Code of the Russian Federation).

The latter requires, accordingly, registration with the Federal Tax Service as a payer of contributions. Thus, both parties with this version of the GPA have consequences that are not desirable in contracts of this kind that are concluded infrequently.

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.

Taxes

According to the law, any organization, company and individual entrepreneur, paying for the services of individuals. persons automatically become their tax agent. This means that they must pay a certain portion of their income to the budget for personal income tax collection. This also applies to the GPA. The tax rate is 13%.

In addition to tax, the customer needs to pay insurance and social contributions. This is done at a reduced rate compared to the salary. Having concluded the GPA, the customer is obliged to pay insurance premiums for pension and health insurance. These contributions are assessed only when services or work are performed. If the subject of the GPA becomes copyright and the transfer of ownership rights, then no payments are made.

Social insurance contributions caused by pregnancy or maternity or disability are also not charged. 22% is withheld for pension insurance, and 5.1% for medical insurance.

GPA does not protect you from paying taxes

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.

Simplified taxation system

The situation is more complicated with companies that use a simplified taxation system. Domestic legislative acts do not indicate what type of expenses remuneration should be attributed to. If we take into account Article No. 255 of the Tax Code of the Russian Federation, then the funds spent on the services of freelance employees are not labor costs, so the company will not be able to take into account the money spent in this form. Remuneration is only funds that are issued to freelance employees (individuals). If the person is an entrepreneur, the funds are considered wages.

In accordance with the law, funds paid to freelance employees reduce the tax base. This is only possible if the employee is not an individual entrepreneur.

But if necessary, based on some other articles of the Tax Code, the remuneration of individual entrepreneurs is taken into account as wages. For example, if the services are of a production nature, then payment for the agreement is accounted for as material costs.

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.

Summary

A GPC agreement is not a simple document or formality. Before signing it, you must carefully read all the terms and conditions.

If you do not understand something or doubt that the document protects your interests, be sure to consult with lawyers. A civil law contract is not an employment agreement, where the employee is seriously protected by the norms of the Labor Code of the Russian Federation. Most often, GPC protects the interests of the customer and can have many nuances in relation to the contractor.

Author: Kadrof.ru (KadrofID: 79032) Added: 05/30/2019 at 13:14

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Comments (28)

Valentina (KadrofID: 100310)

Please tell me, when you work under a civil service agreement, the employer provides income certificates to apply for a subsidy

04/05/2020 at 14:25

Sergey Antropov (KadrofID: 5)

Valentina, if you are asking about a certificate of income in form 2-NDFL, then you can receive such a certificate when working under a GPC agreement. In it, the employer will reflect the income you received and taxes withheld. The issuance of such a certificate is regulated by Art. 230 of the Tax Code of the Russian Federation.

05/01/2020 at 17:37

Natalia (KadrofID: 111378)

Tell me, if a person is employed under a GPC agreement, can he register with the labor exchange?

08/05/2020 at 01:20

Sergey Antropov (KadrofID: 5)

Natalya, no. According to the Law of the Russian Federation of April 19, 1991 N 1032-1 Article 2, such citizens are considered employed, i.e. having income.

08/05/2020 at 22:21

Maxim (KadrofID: 111438)

Tell me, is the existence of a Civil Legal Agreement (CLA) without receiving income for a certain period of time equivalent to conducting business during this period? After all, in fact, since there is no income, then there is actually no activity! And the concluded GPC Agreement is only a formal necessity for the possible conduct of activities.

08/06/2020 at 10:29

Sergey Antropov (KadrofID: 5)

Maxim, the term conducting business is usually used for individual entrepreneurs or organizations. A GPC agreement is concluded with an individual to perform certain work. Therefore, please clarify your question.

08/07/2020 at 22:48

Olga (KadrofID: 112288)

If, as your article says, the main thing is the result, and not the process, is it then legal for the organization to require me to work according to the schedule they have determined (I am not satisfied with such a schedule)?

08/22/2020 at 15:47

Tatiana (KadrofID: 113091)

Can individuals be attracted? Is a person working under a GPC agreement liable for illegal conduct of business activities?

09.09.2020 at 11:34

Sergey Antropov (KadrofID: 5)

Olga, legally no, but in practice it is better to agree with the customer on working conditions acceptable to both parties. After all, the customer can initiate termination of the contract.

09.09.2020 at 22:29

Sergey Antropov (KadrofID: 5)

Tatyana, if you are not disguising your business activities under the guise of GPC, then I see no reason. You pay taxes, you do work.

09.09.2020 at 22:30

Enver (KadrofID: 114155)

Can the employment center check the number and date of the GPC agreement?

09.30.2020 at 21:47

Annushka24 (KadrofID: 114304)

Hello. She worked under a contract for the provision of paid services. During this time I received another education. To receive a tax deduction for training, I asked for a 2NDFL certificate. I was told that I was not entitled to such a certificate precisely because I worked under such an Agreement and did not pay taxes. I objected that, by law, the employer had to pay taxes. I was refused. What to do? Should I file with the Labor Inspectorate or court? Or will everything be useless? I read the contract carefully. The tax issue is not addressed in any way.

04.10.2020 at 01:31

Sergey Antropov (KadrofID: 5)

Enver, I’m not sure that CZ has such capabilities. They are most likely checking to see if any fees have been paid for the employee by the customer. After all, taxes are withheld from payments under civil contracts.

05.10.2020 at 13:48

Yulia Bocharova (KadrofID: 115423)

Tell me whether the amount of contributions should be included in the contract amount, or whether the amount should be included with personal income tax. Now there are disagreements in the institution on this issue. Previously, the amount with personal income tax was indicated, but a new chief accountant came in and now we are calculating all taxes.

10/24/2020 at 07:04

Juliana (KadrofID: 116010)

If I am registered with the Employment Center and receive unemployment benefits and I have registered for a job or part-time job under a GPC agreement, can I lose my benefit payment for the past month? Does the employment center have the right to suspend benefit payments?

02.11.2020 at 15:09

Roman (KadrofID: 116273)

The GPC agreement specifies the amount of 10,000 rubles, after signing the work acceptance certificate, I receive 8,700 rubles, that is, only personal income tax is withheld, and the article states that the employer must pay contributions to the Compulsory Medical Insurance Fund and the Pension Fund. Is this possible or have I misunderstood something? And also, how should my work be reflected on the tax website?

06.11.2020 at 02:01

Sergey Antropov (KadrofID: 5)

Yulia, as far as I know, the contract specifies the amount that includes personal income tax. Tax is withheld when paying money to individuals. face. I think that this can be stated in the documents as a separate paragraph.

07.11.2020 at 22:00

Sergey Antropov (KadrofID: 5)

Juliana, a citizen loses the right to receive benefits after employment. Because ceases to be unemployed. If I understand your question correctly, you have already received what was paid earlier and are not obligated to return it. But since you started working, you no longer have to receive benefits.

07.11.2020 at 22:01

Sergey Antropov (KadrofID: 5)

Hello, Annushka24! When paying money to individuals. For individuals, organizations act as a tax agent and must withhold and transfer taxes to the budget themselves. I assume that the organization for which you worked did not officially carry out the contract and did not pay taxes, and therefore does not want to issue you a certificate. If you worked somewhere else, try to get a certificate there to receive a personal income tax refund.

07.11.2020 at 22:20

Larisa (KadrofID: 116709)

Hello, how can I get Azerbaijani citizens to work for an individual entrepreneur on a patent if they do not have SNILS?

11/13/2020 at 18:41

Vladimir (KadrofID: 116906)

Hello, the employment center sent a letter demanding the return of the paid benefits due to the fact that I was working at that time under a civil service agreement. It turned out that since last year I have been accruing experience at Yandex LLC without payments. What can I do? Can I be sued or forced to return benefits?

16.11.2020 at 21:21

Tatiana (KadrofID: 118674)

I worked under a GPC contract and am a pensioner. I moved to another region and submitted documents to the Pension Fund to reimburse the relocation costs. The Pension Fund requires a certificate stating that I did not receive these payments from the organization with which the GPC agreement is concluded. Is it legal for the Pension Fund to require such certificates and is the organization obligated to issue them?

12/14/2020 at 11:17

Sergey Antropov (KadrofID: 5)

Hello, Vladimir! If you sent a letter, then this question will not be put on hold. It’s better to react, come to the employment center and figure everything out. If, according to the law, you were not entitled to benefits, because... worked, then unfortunately, the benefits will be required to be returned.

12/19/2020 at 12:58

Sergey Antropov (KadrofID: 5)

Hello Tatiana! The Pension Fund of the Russian Federation is a state structure and must act in accordance with the laws. If they ask for a certificate, it means they need it. Therefore, it is better to provide it. The organization must issue it, there are no obstacles to this.

12/19/2020 at 12:59

DMITRIY KOLESNIKOV (KadrofID: 119033)

Is it possible, while working under the GPC, to get another job officially using a work book?

12/20/2020 at 14:31

Annushka (KadrofID: 120205)

Hello. Can I get a job under the civil labor law without resigning from my previous job, where I worked under an employment contract (where I am on maternity leave)?

01/11/2021 at 15:33

Maria (KadrofID: 121179)

Good afternoon Please tell me, if a GPC agreement for the provision of services is concluded with an individual occasionally (2 times a year or once a year), will an employment relationship be considered in this case? The agreement is concluded of a purely civil nature; the frequency of concluding such agreements with the same person is simply not clear. The term for completing services is about 10 days.

01/25/2021 at 21:46

Sergey Antropov (KadrofID: 5)

Dmitry, it’s possible, because... work on GPC may not be the main one.

Annushka, I think so, because... You can work part-time. Just in case, I recommend checking your employment contract and checking to see if there are any clauses prohibiting you from working in other places.

01/25/2021 at 22:34

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.

Eliminate suspicions about the employment agreement

The first thing an organization that intends to enter into an agreement with an individual must do is eliminate the wording and clauses due to which the agreement may be recognized as a labor agreement. That is, such a document should not contain:

• schedule and place of work;
• job title;
• subordination to someone;
• guarantees for the performance of work, regardless of the result;
• other points that can be found in the Rulings of the RF Armed Forces dated November 25, 2017 No. 66-KG17-10 or dated February 5, 2018 No. 34-KG17-10.

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.

Advantages and disadvantages

In most cases, DHPC is preferable for the customer, but it can also be useful for the contractor, having a number of positive aspects. For the person ordering the service, work, etc., the benefits will be:

• Exemption from the formation of employment orders, personal cards and work books in which entries must be made;
• No need to prepare a workplace and conditions for comfortable performance of duties;
• Exemption from payments of monthly salaries, advances, benefits, sick leave, days off and reimbursement of expenses that the employee incurred while performing his duties;
• There is no need to take out medical and social insurance unless required by the contract;
• Evasion of certain taxes and fees;
• There is no need to notify the employee upon his dismissal and to pay severance pay.

Despite all this, the customer will be deprived of the following opportunities:

• Control over the employee and the work process;
• Holding an employee accountable for failure to fulfill his duties, the rules of the charter and measures aimed at labor safety;
• Elimination of the risk associated with the reformation of paper into a TD with the payment of fines.

Important! The pros and cons for the employee are evenly distributed, and it is impossible to say exactly which outweighs.

Advantages:

• The work can be performed at a convenient time, there is no schedule;
• There is no need to comply with the charters and procedures of the organization or enterprise and follow instructions;
• Exemption from repayment of contributions to the Pension Fund and the Compulsory Medical Insurance Fund;
• Possibility of hiring third parties;
• Inclusion of working time in length of service;
• Fulfilling several orders from different people at once.

GPA is a flexible contract for both the employee and the customer.
Negative points for the contractor are:

• Failure to make entries in the book;
• There are no social guarantees for payment of overtime work, severance pay, and holidays;
• If the customer goes bankrupt, the contract is terminated and the remuneration is not paid.

Important! There is a big risk for a businessman, which lies in the fact that if the GPA is signed, and the person performs the functions of a hired worker (seller, cashier).

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.

Risks of the parties: what to pay attention to

Theoretically, concluding a civil contract brings more benefits to the employer than to the employee. In practice, in many cases this is true, because:

• the company is not obliged to pay taxes, insurance premiums, sick leave, vacation pay, etc.;
• only the actual amount of work is paid (non-working time, breaks and other downtime are not compensated);
• “dismissing” such an “employee” is much simpler: there is no need to pay severance pay, there is no obligation to work 14 days while he can find another job.

For the employee himself, these advantages can be automatically presented as disadvantages. However, it also has advantages:

• more flexible schedule;
• lack of obligation to comply with labor instructions and other regulations;
• the ability to choose between different customers in order to find a more profitable job, etc.

That is, his risk is that there is no pension provision, no official length of service, no sick leave, maternity leave, vacation pay, etc. And the only significant risk for the employer is that his “employee” may sue to officially recognize the relationship as labor rather than civil . In addition, the Federal Tax Service and the labor inspectorate are also indirectly not interested in formalizing a civil contract: no taxes or contributions are received into the budget.

Therefore, when signing such a document, it is important to ensure that the service provided cannot really be recognized as a permanent employment relationship. Usually we are talking about the criterion of time: the longer the cooperation lasts, the more it resembles the relationship between the employee and the employer.

The lawyer's comment can be seen here.

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.

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