Hire agreement and employment contract - their similarities and differences

When applying for a job, the Labor Code (LC) of the Russian Federation provides for the following: an entry must be made in the work book and an agreement is concluded between an individual (employee) and a person representing the enterprise (employer) - an employment contract.

A work book is a document whose purpose of existence is to show the history of a citizen’s labor activity. It continues until a person reaches retirement age. Necessary for documentary confirmation of work experience, the presence of preferential service, breaks in work or their absence, etc.

An employment contract (EA) is a document that establishes labor relations (rights and obligations) between an employee and an employer.

Is it legal?

As for special cases, when hiring occurs without an entry in the work book, the question is raised about the legality of such employment. According to the Labor Code of the Russian Federation (Article 65), a work book is a mandatory document. In case of its loss or absence, the employer undertakes to draw up and issue a new document. In the absence of a record, the length of service at a given enterprise is considered invalid, even if the TD contains a clause on the transfer by the employer of all mandatory taxes (pension fund, personal income tax, etc.).

Thus, working under a contract, without a work book, is conditionally illegal. This does not provide for administrative liability, but the length of service is considered invalid.

Reception of specialists

Registration under TD without a work book occurs in the following cases:

• Registration of relations between the employer and the applicant under a civil contract;
• Registration of a specialist for one-time work. (A copyright agreement may be concluded);
• An agency agreement or a contract agreement is concluded;

Specialists of a narrow profile are hired to perform a specific task (tiler, mason, architect, designer). This means that the employer has the right not to make an entry in the work book if he hires a specialist to perform a specific task or project. The employment contract specifies wages, working conditions, the actual purpose of the work and the time frame. Upon expiration of time or completion of the TD task. ceases its effect.

So, the main criteria by which a relationship can be recognized as an employment relationship:

• internal labor regulations have been established;
• there is a permanent salary;
• the same work is done systematically;
• there is a workplace and it is equipped;
• The terms of execution of the contract have not been established.

These criteria are important for the following categories:

• tax authorities and the Pension Fund. The tax authorities are interested in requalifying the employment contract into an employment contract, because this will allow additional taxes to be assessed. Most often, an enterprise enters into a rental agreement with an individual entrepreneur, and the employer saves on taxes. He often asks his employees to obtain registration as individual entrepreneurs in order to then formalize their work under a civil law contract;
• Labor Inspectorate and Social Insurance Fund. It is important for them to re-qualify the contract for collecting fines (for violation of employee rights) and for receiving insurance premiums;
• the workers themselves. They can demand judicial recognition of the employment relationship with the customer if the employment agreement actually characterizes this relationship as such. The motivation is easy to understand - the employee wants to receive the benefits and guarantees he is entitled to under the Labor Code. When it is the employee himself who files a claim, the court most often meets him halfway and reclassifies the GPA as a labor law. Therefore, the most dangerous situation for an employer is when an employee goes to court.

Summarize. It is important to choose the correct form of contract in advance. If the contract is classified incorrectly (a civil law one is chosen instead of a labor contract), then, if necessary, in court such a contract can be reclassified as a labor contract. What will follow is that the employer will be forced to perform the following actions , which he may have wanted to avoid:

• he will have to pay the employee’s salary in full;
• the employee will have to be included in the staff of the enterprise;
• pay moral damages;
• add part of the taxes;
• pay contributions to the Social Insurance Fund;
• pay a fine;
• pay legal costs.

Full time job

A job is considered permanent if, when applying for it, an order is created for the employee, signed by the director of the enterprise on hiring the employee on staff. In the personnel department, a personal file is opened for him, an employment contract is concluded between the employee and the director, and an entry is made in the work book. Many enterprises give themselves the right to a probationary period, which varies at the discretion of the manager. During this period, the TD may not be concluded and the entry may not be made in the work book. Permanent work requires compliance with the internal regulations of the enterprise, disciplinary sanctions, incentives, social insurance (in most cases).

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).

Agreement conditions:

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. It is convenient for the employer to enter into such an agreement in that he is exempt from the need to pay benefits, sick leave, vacation pay, and reserves the right not to retain the job of a temporarily disabled employee.

Retraining of GPA into an employment contract

A civil law contract can be reclassified into an employment contract in court.

In this case, the court evaluates the presence of the following conditions:

1. The nature of the assigned work (what kind of work the employee did: performing independent work or performing a certain job function within the framework of subordination to the internal regulations of the enterprise);
2. Specific working conditions (the employer provides a workplace, materials for work, compliance with safety regulations);
3. Payment procedure (in the employment contract, the payment procedure is established in an amount not lower than the minimum wage and is paid regularly, 2 times a month);
4. Formulation of the subject of the contract (description of the labor function in accordance with the staffing table of the enterprise);
5. Social guarantees (the employer undertakes to pay social benefits to the employee: sick leave, vacation pay, etc.)

Under what conditions is an employment contract drawn up without formal registration?

Basically, the document is used when it is necessary to complete a specific project within a limited time frame. Also, such an agreement is suitable if we are talking about seasonal work.

The employment contract can be terminated by the employee at his request at any time. The only thing he has to do is report this to his boss.

By whom and when can it be compiled?

Temporary employment agreements are often concluded by organizations in order to hide the real employment relationship with subordinates.

It is important to understand that this is against the law. If there is an ongoing relationship between an organization (or) and a citizen to provide services or perform work, they can easily be reclassified as an employment contract with all the ensuing consequences.

To conclude a rental agreement, the following conditions must be met:

1. The employee’s actions will not constitute his job duties.
2. The work must be one-time, not permanent..
3. The scope of work must be determined in advance.

A temporary employment contract can be concluded with the following people:

• those who provide a one-time service and do not systematically earn money from it;
• with foreigners or stateless persons . Formally, the performers can be residents of any country, regardless of their status, but in reality it is undesirable to enter into such agreements with people who do not have a patent or permit. The exception is citizens of Belarus and Kazakhstan, who have equal rights to Russians;
• An agreement can be concluded with persons under the age of majority . However, it is important to observe some specifics here: under no circumstances can a contract be concluded with children under 14 years of age; parents or guardians must make decisions for them; if the performer is between 14 and 18 years old, the consent of one of the parents or guardians is required to conclude the contract.

Under what conditions is it issued?

A temporary employee contract is great when you need to complete a project within a limited time frame.

Often it is concluded with people of a creative profession - illustrators, photographers, etc. due to the fickle nature of their activities. When hiring an employee, you must be informed about the nature of the work and the terms and conditions of cooperation must be specified.

Differences between a temporary employment contract and an employment contract

Each type of cooperation has its positive and negative sides. How does an employee employment contract differ from an employment contract?

Taxes

According to the Tax Code of the Russian Federation, a single tax (personal income tax) is deducted from a citizen receiving income, regardless of whether he works under a TD or GPA, by the enterprise’s accounting department - in the amount of 13% of the amount earned. For foreigners working in the Russian Federation – 30%.

The employer pays insurance contributions to the pension fund and social insurance fund.

Thus, the following conclusions can be drawn:

1. When applying for a job, find out whether the job is one-time or permanent, whether the employee is hired on staff or hired as an order executor.
2. If the work is permanent, an entry in the work book must be made in order to be able to prove in the future that work took place at this enterprise. (Article 65 of the Labor Code of the Russian Federation)
3. Conclude an employment contract with the director of the enterprise, which stipulates the main labor functions, obligations of the parties, social insurance conditions, tax deductions and the duration of the contract.
4. If the work is one-time or a specialist is hired to complete the final task, a civil law agreement is concluded (Article 420 of the Civil Code of the Russian Federation).
5. The GPC agreement provides the following benefits for the employee: optional submission to the disciplinary rules of the enterprise, independent performance of work, and the impossibility of imposing a disciplinary sanction.
6. The advantages of the GPA for the employer are as follows: social insurance and vacation pay are not paid. There is no need to provide the contractor with a workplace and materials for work.
7. If necessary, the GPA can be re-qualified in court as an employment contract with the possibility of providing the employee with social guarantees, accrual of length of service and provision of a job.

Employment contract without a work book with an individual

Employers who are individuals, not registered as individual entrepreneurs, do not have the right to create work books for employees who are getting a job for the first time, as well as to enter information about the place of work in the work books. Confirmation of the fact of working for an individual will be an employment contract drawn up in writing. This does not apply to individual entrepreneurs - such employers must enter all the necessary information into their work books. At the same time, the individual employer is also obliged to pay not only personal income tax, but also insurance premiums from his employee’s salary (clause 1, clause 1, article 419 of the Tax Code of the Russian Federation).

Sometimes, when employers are looking for information about an employment contract without a work book , they mean a civil contract. Please note that if an employee enters into a civil law relationship with an employer, then no personnel documents, including a work book, need to be prepared. Do not confuse labor and civil law relations.