Differences between a GPC agreement and a labor agreement: pros and cons for the parties

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).

Drawing up a civil contract: information

Having weighed all the positive and negative aspects of working on the basis of such an agreement, many decide to conclude it. Some employers or personnel workers, without further ado, take an employment contract and, changing the words employer to customer, and employee to contractor, sign it as a contract of civil liability. And this may well be the reason for its recognition as an employment relations agreement.

Therefore, everyone who has decided to conclude it should know the key points of its preparation:

1. The date of the agreement is indicated.
2. The customer's side is a legal entity, the name of which is written in full and in accordance with the credentials, must be represented by a specific representative, for example, Antey LLC represented by the general director acting on the basis of order No. 15 of March 22, 2013. The second party is an individual, his surname and initials are indicated.
3. The section “Subject of the agreement” indicates:
   Specifically the type of work or service provided by the contractor.
4. The customer's obligation to accept the result.
5. The deadline by which the work will be completed.
6. The section “Rights and Responsibilities of the Parties” defines the responsibilities of each party.
7. The section “Cost of work and payment procedure” determines the form and procedure for payment for work.
8. The last section specifies the duration of the contract and possibly other important terms.
   The next section should stipulate how the procedure for delivery and acceptance of work performed or services provided will occur.
9. Sometimes a clause on special conditions is introduced, implying, for example, non-disclosure of information about the customer.
10. The details include the full legal address of the customer, an indication of his current account and INN/KPP, as well as the full passport details of the contractor, and an indication of the address and his current account.
11. Both parties sign the agreement.

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.

Registration of an employment contract without a work book for remote workers

An obvious achievement of the legislation is the introduction into the Labor Code of the Russian Federation since 2013 of provisions regulating the specifics of the work of remote workers who are not representatives of outsourcing companies.

Draw up a remote work contract correctly using the article “Sample employment contract with a remote worker 2021.”

A selection of forms from ConsultantPlus experts will help you process the transfer of an employee to remote work. If you don't already have access to this legal system, get a trial access. It's free.

According to Art. 312.1 a remote employee is a person who works outside the territory under the control of the employer using telecommunication networks, including the Internet.

With such employees, all exchange of documents can occur electronically through the use of enhanced qualified digital signatures. At the same time, the employer is obliged to send the original contract and additional agreements to it to the distance worker by registered mail, as well as other working documents at the employee’s request.

Before the law, permanent and remote employees are equal in their rights and responsibilities. But the main “highlight” of remote work is the opportunity (by agreement with the employee) not to fill out or register a work book (Article 312.2 of the Labor Code of the Russian Federation).

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.

External part-time work - nuances of work

A citizen who has several jobs and is registered under employment contracts has full rights guaranteed to him by labor legislation:

• leave, in the amount provided by law, provided in agreement with management at the same time for all employers;
• in case of illness - obtaining a certificate of incapacity for work for each place of work separately;
• accrual of labor and insurance pension experience.

Keep in mind: at the request of an employee who is a part-time employee, the employer can enter an additional place of work in the work book, guided by the information from the certificate issued by the main company.

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.

The procedure for accepting work under a civil contract

Completed work (services) is accepted according to the acceptance certificate for completed work (services).

For violation of deadlines for completing work, a penalty in the form of a fine or penalties may be collected from the contractor . In case of damage to the customer's property, the contractor must compensate for the losses in full.

In addition, unlike an employment contract, under contract or paid services, the contractor bears the risk of accidental death or accidental damage to the result of the work performed before its acceptance by the customer.

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.

Disadvantages of working without a work book

In fact, a work book is a key document that serves as confirmation of the fact of an employment relationship. It contains concise information about the employer’s administrative acts related to employment, promotions, transfers, and dismissal. These documents must be registered and stored for 75 years.

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.

Hired work for an individual

In Art. 303 of the Labor Code of the Russian Federation contains provisions that allow regular work for individuals not related to business activities. At the same time, making entries in the work book by an individual is strictly prohibited (Article 309 of the Labor Code of the Russian Federation).

This does not mean that the relationship between employer and employee will not be recorded anywhere. When concluding such an agreement for an individual employer, Art. 303 of the Labor Code of the Russian Federation imposes certain obligations to the state and the hired employee. Thus, an individual is obliged:

• put the agreement in writing;
• pay all salary taxes in accordance with the law;
• issue SNILS for workers without experience;
• notify the city administration at the place of residence about the conclusion/termination of the contract.

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.

For what period can a GPC agreement be concluded?

Civil legislation does not in any way limit the period for which GPC agreements can be concluded. Typically, deadlines are set based on the specific work or services to be performed under the agreement. The employer clearly determines how much time the employee will need to fulfill all his obligations and stipulates this period in the contract. Subsequently, the performance of work or services must be documented in the acceptance certificate.

It is because of such deadlines that many citizens are afraid to work under GPC agreements and prefer labor agreements. After all, an ordinary employment contract is concluded for an indefinite period, and it is not so easy to terminate it: there must be good reasons for this; the employer is obliged to notify the employee of the termination of the contract at least two months in advance. GPC agreements, in turn, are concluded for a specific period, after which they are automatically terminated. Accordingly, the employee has no guarantees that he will continue to cooperate with the employer in the future.

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.

The main options for contracts without an entry in the work book

Civil liability contracts themselves are very convenient and in many cases this is the most acceptable solution to the problem for both the employee and the customer. They allow you to hire workers only for the period when there is a need for their services, without burdening the budget with unnecessary payments. The employee receives freedom of action and the opportunity to cooperate with several employers at the same time.

All contracts can be divided into groups:

1. Contract , the performance of specific work in specific lines, here it is implied that the contractor orders specific work, and the contractor completes it at the agreed time and delivers it to the customer. This ends the agreement.
2. Provision of paid services - the provision of specifically specified services, this type of contract can be long-term, it is often concluded by people of creative professions: photographers, graphic designers, teachers also provide such services, we often encounter the provision of paid services when searching for a tour operator. The contract implies the provision of a specific service and terminates after its receipt.
3. Agency agreements are not uncommon in the legal field, where lawyers carry out certain actions on behalf of the client. Having completed an assignment, for example, representation in court, the agreement is terminated.
4. Agency agreements assume that the hired employee carries out activities on his own behalf, for example, the services of a detective or lawyer, and then brings a report to the customer and receives payment.
5. Commission agreements presuppose an activity, payment for which will be a commission from the transaction.

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.

How is an employment contract concluded?

The agreement is concluded in writing and signed by both parties. You must be given a second copy. Keep it as the apple of your eye: it will come in handy in case of problems.

If the contract is not ready in writing, but you have actually begun to perform your duties with the knowledge of the employer, then the agreement is considered to be concluded by the Labor Code of the Russian Federation, Article 67. Form of the employment contract. The employer has three days to formalize everything properly.

The employment contract comes into force under the Labor Code of the Russian Federation, Article 61. The employment contract comes into force at the moment it is signed by both parties. It usually specifies the date on which the employee must begin activities within the scope of his position. If this is not specified, the first working day is considered to be the next after the conclusion of the contract.

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.

How are labor relations formalized?

The basic rules for formalizing labor relations are determined by the Labor Code of the Russian Federation. This usually happens according to this algorithm:

1. A potential employee is being interviewed. Here his level of qualifications and experience are determined, available documents are preliminarily reviewed, and the basic conditions of future work are announced.
2. After successfully completing the interview, the application process begins. In this case, the applicant is required to write an application addressed to the employer with a request for employment.
3. The application is signed by the manager who has the right to employ employees. After this, an employment contract and an employment order (instruction) are prepared. After these documents are signed by the parties, the applicant becomes an employee.
4. Before starting to independently perform labor functions, the employer is obliged to familiarize the employee with working conditions, internal labor regulations, the presence of harmful or dangerous factors, and the terms of the collective agreement. It is also necessary to conduct initial and introductory briefings on labor protection. All this is indicated in the employee’s personal file.
5. If the contract has a probationary period, it is necessary to indicate the conditions for passing the test, as well as the procedure for summing up the results. This is important, because an employee who fails the test may be fired before the end of the employment agreement.

Remember, employment is always formalized exclusively in writing. Even if it was not initially possible to sign the relevant documents, they are drawn up as soon as possible and apply to the periods when the employee actually began working.