Lately, gray employment schemes are increasingly flourishing in Ukraine. In order to understand how to deal with them, the "ElitExpert" agency turned to Igor Shavrov, a well-known lawyer who manages the "Shavrov and Partners" law office, for comments.
When a person is hired for a permanent job, an employment contract must be concluded with him. Permanent work is, as it were, the company's exclusive rights to the employee's work and time. An employee does not have a separate task, but a whole range of responsibilities. He must obey the rules and guidelines, follow the schedule. They do not pay for the project, but the salary for each month, they provide paid vacation and sick leave.
The employee's salary is given in cash at the cash desk and asked to sign the payroll or transferred to the card. At the same time, the transfer comes from the organization or FOP specified in the employment contract.
Sometimes the organization needs a person for one-time work. For example, a web designer to make a website, a builder to repair a cabinet, a craftsman to repair a machine. It makes no sense to hire such an employee for a permanent job, so they conclude a contract of a civil law nature with him - GPC.
Such relations are regulated by the Civil Code. There are several types of GPC contracts, the most common of which is a contract for a contract when some work needs to be done, and a fee-for-service contract for services. An employee under a GPC contract is called an executor or contractor, and an employer is called a customer.
The performer is an ordinary physical person or a self-employed person without the status of an individual entrepreneur. For an individual, the employer pays taxes and contributions, as well as remits personal income tax. Self-employed status allows the customer not to pay taxes and fees.
It is not possible to apply self-employment in all spheres of activity: for example, a self-employed person cannot rent non-residential premises or resell goods. Copywriters and editors can safely switch to this mode in order to officially work and pay taxes.
Work under the GPC contract can be done both one-time and regularly. True, in the latter case, it is important that the performer receives money for specific services, and not performs a variety of duties that correspond to some position in this company. There should always be a clear order of the customer, which the performer must fulfill for money.
You cannot conclude a GPC contract with a person who is actually an employee: follows a schedule, goes to the office, works in the interests of the customer, according to his regime and rules, receives a salary twice a month. Such a contract can be recognized as a labor contract, and the labor inspectorate will come with an unscheduled inspection.
Why employers resort to gray schemes
Managers who worked to circumvent the law often said that the labor code does not protect the company, and "vile employees" are only waiting for the opportunity to receive money and social guarantees and not work. Therefore, the company is "insured". Such is the justification.
In my experience, all gray schemes ultimately come down to two options: either employers conclude a GPC contract with a person who is actually an employee of the organization, or they do not formalize labor relations at all. In the first case, an unscrupulous employer usually saves on deductions, vacations and sick days, and can also say goodbye to an employee at any time. In the second case, the opportunity is added to it that he does not pay at all. I will tell you about the schemes that I encountered most often.
The contract is concluded on behalf of the second customer
Imagine: you get a job at Romashka LLC, and they offer to conclude a contract with a legal entity of Vasilek LLC. In this case, neither the formal nor the real employer will bear responsibility even within the framework of the GPC contract. The formal employer - "Vasylka" - will always have the opportunity to prove that the performer himself did not do what was necessary. After all, the company, which was specified in the contract by the customer, in fact did not receive anything. And the real employer, in our example - "Daisy", legally does not owe the employee anything, even if he accepted his job.
To the risks that I described in the previous scheme, one more is added - they may not pay at all. And even the court will not help in this situation. Moreover, if the formal employer "Vasylek" prescribed penalties for the executor in the contract, then the latter will be at a loss.
They offer to work on a trial period without registration
They can offer to work with pay at first, but without an employment contract: they said that they would hire me if I pass the probationary period. Although according to the law, even for this period, an employment contract must be concluded. It happened a little differently: first there was a probationary period without registration, and then there was a GPC contract.
There are many risks here, because the person is not an employee of this company. So, he is not entitled to sick and vacation benefits, but even a salary. The employer can always say that he does not owe anyone anything.
If the company has a normal reputation, that is, there are no reviews on the Internet that employees are being cheated, then you can agree to such conditions. However, with an important caveat: I suggest that during the trial period you sign with me a GPC contract as with a self-employed person.
They are not issued at all
That is, there is no contract - neither GPC, nor labor. You just work and possibly earn money. In addition to all the risks described above — the probability of immediate dismissal without money, lack of sick, maternity, and vacation leave — there is one more. If this is an office job, personal belongings that the employee keeps in his desk may not be returned. Security simply won't let an outsider into the building. The employer, by the way, also risks, and not only receiving a fine. After all, an unscrupulous seller, for example, can run away with money from the cash register.
My friend worked in this way as an administrator and manicurist in a salon, as well as a saleswoman in a shopping center. I just made an agreement with the hostess and took over. They say that it will be unprofitable for small entrepreneurs to register employees: the business is already on the verge of survival. In both cases, she was lucky: everything was paid, and they parted amicably. But it is not worth working as a manager or copywriter without registration. For a whole month you sell machines or write texts for the site, and then they tell you, they say, get out of here, you are who you are.
Now, if the employer insists on such a scheme, it is best to try to persuade him to conclude a contract as with the FOP. That way it will be more peaceful for everyone: the person will receive his money, and the employer will not have to pay personal income tax and contributions, and he will have peace of mind about his property. In the case of a beauty salon, a self-employed craftsman can rent a workplace. This is also legal.
Part of the salary is paid in an envelope
Many people receive a letter of credit in envelopes. It can be only gray when part of the money is paid in an envelope, or black when the entire amount is given in an envelope. One gets the impression that this is a mass phenomenon.
Familiar businessmen motivate this by the fact that personal income tax and insurance contributions are too high in our country and it is impossible to pay them. Therefore, companies do everything to hide the income of their employees from the state. You can face something like this when you work both under a GPC contract and under a labor contract: the minimum salary will be written in the document, the rest will be handed out without any papers and statements.
In the case of GPC, the main risk is that they will pay only the amount specified in the contract. It will not work to prove in court or the labor inspectorate that you verbally agreed on other money.
In the case of an employment contract, there are more risks. For example, upon dismissal, they can pay the salary for the last month and compensation for unused vacation only based on the "white" salary. Vacation, sick leave, maternity leave, and child care leave payments will also be calculated at the minimum.
In addition, the employee risks the fact that regular payments may interest the state. In any case, the tax office has a hypothetical opportunity to track receipts on cards of physical persons.
Paying taxes is a citizen's duty.
An example — a GPC contract was concluded with the executor, but it did not go through the accounting department, but rather existed to reassure the employee. The entire salary was given in an envelope.
Once, the employers for whom our client wrote scripts used a cunning scheme with bank cards. Employees - and there were many employees who were paid gray wages - worked from different regions. You can't hand over cash in an envelope to them, and regular transfers to a card from an individual can cause suspicion of the tax authorities. I was asked to go to Privat and issue a card. It is issued immediately, but the name is not indicated on it. After that, she sent the card and pin code to the office. Once a month, the director went to the ATM and put his salary on each employee's card. Employees, including her, saw in the bank application that the money had arrived, and transferred it to their main card.
Disguising an employment contract under GPC
the company actually hires a person for a permanent job, but issues him under a GPC contract, not a labor contract. That is, she seems to order services, but at the same time she is not obliged to comply with the labor code.
This option does not really help customers and executors save on taxes. Payments to individuals in these cases are subject to personal income tax, and pension contributions are charged on them.
The main advantage of such a scheme is that the customer is not obliged to provide labor guarantees: sick leave, vacation, compensation for staff reduction, job retention. It is possible to part with the executor under the service contract in one day.
For example, the customer has requirements to work for 8 hours, 5 days a week, always be at work, perform tasks from superiors within the time limits set by them, work only through a remote desktop on the company's servers. The employee must perform certain labor functions, and not provide a specific result. For this, he is offered a monthly salary and a KPI bonus, not a reward for each task. But the arrangement is based on a contract for the provision of services, and here it is clearly an employment relationship, even though it is remote work.
A friend's husband works as a courier. Most often, he delivers orders from a large marketplace, but it is difficult to call him a full-time employee. He uses his own car, takes only those applications that he considers convenient, receives money for each delivery and decides himself which days to take work shifts. For him, this is a part-time job, and he can leave at any time.
Excessive or illegal fines are prescribed in the contract
When I first started, I was offered a job with a gray registration and salary, but with a long list of fines. That is, the employer did not guarantee payment and a social security package, but demanded guarantees of his safety.
For example, my customers sometimes include in the contract a requirement to observe confidentiality: not to advertise how the company is structured, what technologies are used there, and so on. At the same time, they are not forbidden to talk about their work. You can also write a review on the Internet and post the result in your portfolio.
