Agreement for paid services (GPC agreement): rules, nuances, samples

The abbreviation GPC stands for civil law. Accordingly, GPC agreements are a special type of labor agreements regulated by civil law. Most often, such contracts are signed by companies and employees who are hired for a specific short period to provide a clearly defined range of services. At the same time, a GPC agreement can legitimize relations not only with an individual employee, but also with an individual entrepreneur, a contractor-legal entity, etc.

What is the difference between working under a civil contract and working under an employment contract?

Types of GPC agreements

So, the parties to the GPC agreement can be:

• ordinary employees - individuals;
• IP;
• contractors of various legal structures (LLC, PJSC, etc.);
• government bodies (budgetary, government, etc.).

Accordingly, the most common GPC agreements can be divided into several categories.

How to draw up a civil contract for the provision of services by an individual ?

Contract for paid services

The most popular type of GPC agreements. They are concluded by employers-legal entities and hired employees-individuals. The terms of the contract clearly state what services the employee undertakes to provide, for how long and under what conditions. Paid-for-fee contracts are common in areas where seasonal work or project-based work is required.

Question: Is it possible to recognize expenses for income tax purposes under a civil contract (including outsourcing) if the staff has divisions (employees) with duplicating functions (clause 1 of Article 252 of the Tax Code of the Russian Federation)? View answer

Contract (household, construction, etc.)

IMPORTANT! A sample contract agreement with an individual from ConsultantPlus is available here

It is concluded between two legal entities or a legal entity and an individual entrepreneur. The subject of such an agreement is the performance of clearly defined work.

The customer is one company, the contractor or performer, respectively, is another: it can be an LLC, individual entrepreneur, etc. Such agreements are often concluded, for example, in the housing and communal services sector: management companies that do not have maintenance personnel on staff hire contractors to perform cleaning, minor repairs, etc.

Agency agreement

In this case, the company hires a citizen as a principal, or attorney. Based on such an agreement, an individual can act on behalf of a legal entity in various authorities, defending the interests of the company. Upon expiration of the GPC agreement or in equal shares during its validity, the employer pays the attorney the amount indicated in the “Terms of settlement” paragraph.

Agency contract

Usually concluded between two legal entities. One of the parties, called the “principal,” instructs the other party, the “agent,” to conduct a certain type of activity on its behalf. Most often, an agent is hired to sell goods and services or promote them on the market.

Parties, content and structure of the employment contract

In Art. 20 of the Labor Code of the Russian Federation, the parties to an employment contract are the employer and the employee.

An employee is an individual over 16 years of age (and with the consent of guardianship over 14 years of age), medically fit to perform labor functions. For 14 year old employees the following conditions must be met:

– easy work, without excessive physical and mental stress

– consent of the guardian, and in certain cases of guardianship (if the child is under 14 years old, for example for filming a movie, etc.)

– work should not interfere with the educational process

Employer is an individual (IP) or legal entity that is not prohibited by law from concluding employment agreements.

The content of the employment contract is determined by Art. 57 of the Labor Code of the Russian Federation.

It must contain the following information:

– Full name (full name) of the employee and name of the employer

– details of the parties (passport details of the employee and the lessor (if it is an individual entrepreneur))

– TIN of the organization, individual entrepreneur

– date and place of signing the agreement

– place of work where the employee will work (perhaps somewhere in a structural unit or in the “parent” organization...)

- position according to the staffing table

– date (from what date the employee begins to perform his job duties and when he finishes (for a fixed-term employment contract))

– terms of remuneration (tariffs, allowances, conditions for bonuses, etc.)

– work and rest schedule (full-time, shift schedule or summarized recording of working hours)

- guarantees

Additionally, depending on the nature of the employee’s work, the employment contract includes the following conditions:

– about the probationary period

– on non-disclosure of trade secrets

– on full financial liability (only with employees appointed to positions specified in Appendix No. 1 of Resolution of the Ministry of Labor and Social Development of the Russian Federation of December 31, 2002 No. 85. Otherwise, such clause of the contract will be invalid and illegal).

The structure of the employment contract includes the following sections:

1. Data of the employee and employer (full name of the employee, his passport data, name of the organization, its legal location, full name of the manager).
2. Indication of the position and place of work of the applicant.
3. Description of the rights and obligations of the employee and employer.
4. Work and rest schedule. The conditions for the formation of remuneration (salary + bonus, salary, rate + percentage, etc.), internal rules are specified.
5. Additional conditions due to the nature of the position.
6. Signatures of the parties.

With whom can you conclude a GPC agreement?

As already noted, civil law agreements can be signed by individuals, individual entrepreneurs, and legal entities. Customers of services have the most questions when working with individuals. In particular, companies are interested in whether it is possible to conclude GPC agreements with their full-time employees who already have an employment contract, with employees officially employed in other organizations, with teenagers or foreigners.

Is it possible to conclude a GPC agreement with your own full-time employee?

It is possible, although this is not the most common practice. This possibility is confirmed by letter from the Moscow Department of Taxes and Duties No. 14-14/5848 dated February 4, 2000.

A GPC agreement with a full-time employee may be required if the employee must perform some overtime work that is not specified in the job description, and, moreover, in a short time. However, in this case, the Labor Code provides for other, simpler options: for example, part-time work or hiring for two positions with additional pay.

These options are good because the relationship between employer and employee continues to be regulated by the Labor Code and does not move into the sphere of civil law, i.e. falling under the Civil Code. Therefore, GPC agreements are not very common and are usually concluded only in cases where it is difficult to arrange additional payment or part-time work. For example, civil law agreements are often concluded with full-time employees on vacation.

Is it possible to conclude a GPC agreement with a minor?

GPC agreements can be concluded with teenagers over 14 years of age. From this age, individuals receive partial legal capacity, which allows them to enter into civil legal relations. However, before reaching 18 years of age and gaining full legal capacity, any contracts must be signed in the presence of parents or guardians and with their written consent.

When hiring teenagers, employers most often give preference to civil rather than employment contracts. After all, concluding such an agreement removes a number of inconveniences. For example, a teenager working under the GPC is not required to undergo a medical examination required before signing an employment contract.

Is it possible to conclude a GPC agreement with a foreign citizen?

In the case of hiring foreign citizens, concluding GPC agreements is considered more rational than signing employment contracts. The form of such an agreement will not differ from that which the company signs with Russian citizens.

The main thing that an employer must remember is a thorough check of the residence permit, work permit and other documents allowing a foreigner to live and work in Russia. After all, for hiring a citizen who does not have the right to work or even stay on the territory of the state, the entrepreneur will face serious sanctions.

How is a GPA agreement concluded with an individual?

A GPA agreement with an individual must be drawn up in writing. For a document to be legally binding, it must be signed by each party to the agreement. This way the contract will be endorsed. It is not necessary to invite a notary.

A GPA agreement for the provision of services, even if it exists, cannot be noted in the work book. The main reason is that the document in question is not related to employment transactions. After the agreement has been drawn up, you can change some of its terms, but this will require several additional steps. In particular, prepare additional agreements. They must reflect all changes that will need to be made to the main contract. Moreover, these changes must be agreed upon and obtain the consent of all parties.

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.

AGREEMENT FOR PROVISION OF LEGAL ASSISTANCE

Tyumen
December 1, 2023

Kalugin Egor Sergeevich, registered at the address: Tomsk region, Tomsk city, Cheryomushki Avenue, building 335, apartment 476, passport: series 0000 number 000000, hereinafter referred to as the “Principal”, on the one hand, and Vyacheslav Yurievich Kazantsev, registration number in register of lawyers – 00/00, having a higher legal education, acting on the basis of Art. 25 of the Federal Law “On advocacy and the legal profession in the Russian Federation”, hereinafter referred to as “Lawyer”, on the other hand, have entered into this agreement as follows:

In order not to miss important details in the process of drawing up such an agreement, we will analyze its contents in detail. First, the preamble is written, and it includes:

• Firstly, the type of transaction being concluded is indicated (in the version we are considering, this is an agreement for the provision of legal assistance);
• Secondly, you should indicate the city in which the agreement is drawn up (the exact city in which the agreement is drawn up is indicated, regardless of the registration address of the counterparties);
• Thirdly, the date of the transaction is stated;
• Fourthly, the surname and initials of the Principal, as well as passport data and registration address are indicated;
• Fifthly, the registration number of the Lawyer is indicated, and on the basis of what powers he acts;
• Sixthly, the roles of the Counterparties under this agreement should be indicated (who is the Principal and who is the Lawyer(s)).

It should also be noted that organizations (bar associations) can also act as Lawyers.

Further, the contract contains sections containing information about the terms of the transaction. In this case, the conditions are divided into essential and additional:

• Essential conditions are mandatory conditions that must be specified in the text of the agreement in accordance with the requirements of the law;
• Additional terms and conditions are included at the discretion of the parties.

Below we present examples of sections containing the above conditions:

Do I need to pay taxes under a GPC agreement?

Civil contracts are subject to only one type of tax – personal income tax. The personal income tax will be 13% for citizens of the Russian Federation and 30% for persons who are not residents of the Russian Federation. In some cases, the employer has the right to stipulate in the contract that the employee himself is obliged to pay the fee. If the agreement is concluded with an individual entrepreneur, personal income tax is not paid.

In most cases, the employer must also pay insurance premiums, pension contributions, and health care benefits.

Who can sign

The conclusion of the GPA is a convenient measure that allows you to use the services of an employee under a civil law contract, without bearing responsibility for it under the Labor Code of the Russian Federation. The employer is also exempt from some budget contributions (for example, to the Social Insurance Fund), but the application of the agreement is limited, since it does not imply hiring a permanent employee. The contractor has the right to leave the organization upon completion of the work and completion of the term. To find out whether a GPA can be concluded, it is necessary to determine with whom it can be concluded, who is the party to the contract and what the nature of the work is.

Foreign workers

From a legal point of view, concluding a GPA with foreigners is not prohibited. For the employer, this is more convenient than concluding an employment contract, however, it is not recommended to sign such a document if a patent has not been issued and there is no permission, as there may be troubles with tax authorities and migration authorities.

Only for Belarusians and Kazakhstanis there are no such restrictions under the contract with a foreign worker.

And yet, the GPA decides the issue of hiring when the previous patent is no longer valid and a new one has not yet been issued. Legally, it is possible to include in the clauses of the agreement with foreigners a clause establishing automatic termination upon loss of the right to work within the Russian Federation.

We recommend you know: how an outstaffing agreement facilitates interaction with foreign citizens when hiring.

Minors

The advantages of a civil contract include the legality of employing minors without registration in the state.

Main rules:

1. Citizens under 14 years of age are not allowed to sign the document.
2. All actions for a minor are performed by a parent or representative by law.
3. During the period of 14-18 years, an agreement is concluded with the child, but it cannot be done without written consent from the parents.
4. Child emancipation frees you from the need to agree on a document with your parents.

Health workers

As established by Article 2 of Law No. 323-FZ, approved on November 21, 2011, a medical worker is recognized as an individual who has a medical education and is employed in the medical field, or an individual entrepreneur whose activities are aimed at providing medical services.

When a contract is concluded with a medical professional, the model for the contract is an agreement on the provision of services on a reimbursable basis.

The condition for the performance of work by a health worker under the GPD is that the services provided are one-time, a limited period and the presence of a main place of work, on the basis of which the one-time nature of the services is recognized.

GPA vs employment contract: pros and cons

Employment and civil law contracts have significant differences, in addition to the fact that most often they are concluded in different situations.

An employee or contractor working under the GPA is more likely not a subordinate of the employer, but an equal economic entity. He has a certain freedom in performing his work; he can determine his own conditions and influence wages.

At the same time, an employee working under the GPA can also count on certain social guarantees. Civil contracts are taken into account in the total length of service: the employer most often pays insurance premiums and transmits information about the terms of the employee’s work under the civil contract. This length of service is taken into account when calculating the old-age pension. Therefore, in 2022, employees who work for hire are no longer afraid of civil contracts.

What is a civil contract?

A GPC agreement is a transaction where, based on the agreement of the parties, their obligations and rights in relation to each other are established, changed or terminated in accordance with Articles 153, 154 and paragraph 1 of Art. 420 GK.

This type of agreement between a legal entity and an individual determines their relationship related to the result of the work. In this case, the parties do not enter into an employment relationship; in relation to each other, they are the customer and the contractor.

A civil law contract is concluded according to the rules of the Civil Code and its main difference from an employment contract is the ability to prescribe any conditions that do not contradict the law and suit both parties. This rule is prescribed in Art. 421 Civil Code.

At what point should I apply?

The agreement is concluded in writing. The document is drawn up in two copies, which are signed by the parties. The organization is developing an example of an employment contract, which is filled in with the employee’s data and submitted for signature. One copy remains with the employee, the second - with the employer. The fact that a copy of the document was handed over to the employee must be confirmed by his signature on the copy that belongs to the employer.

If the document is not executed in writing, but the employee is allowed to work, and the employer knows about this, the latter is obliged to prepare the document in writing within three working days from the moment the person is allowed to work.

Use the employment contract designer from ConsultantPlus to avoid mistakes and break the law.

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