GPC agreement - what is it?

Quite often, a GPC contract is drawn up together with an employment contract. This document has many advantages for both workers and employers. The GPC contract is a document presented in several forms. It has many differences from the standard labor agreement regulated by the provisions of the Labor Code.

Legislative regulation

In Art. 421 of the Civil Code contains information that a GPC agreement can even be drawn up by a private person, for which it is not necessary to register a company or individual entrepreneur. Such relations are regulated only by articles of the Civil Code. Particular attention is paid to this issue in Ch. 39 and chap. 73 Civil Code.

The GPC / SEC may be concluded only subject to certain conditions, which include:

• both parties to the transaction must be recognized as having legal capacity;
• the parties are not allowed to lack legal capacity;
• the essence of the agreement should be legal and not contradicting the basic principles of morality.

The consideration received by one party under this contract is taxable in the standard manner.

Differences from an employment contract

Most often, this document is a convenient and profitable alternative to a standard employment contract. But there are numerous differences between these agreements.

Therefore, the GPC contract is a specific contract that has many differences from the standard labor agreement regulated by the provisions of the Labor Code. The contractor under such a document bears civil liability for all property of the customer, which is used during the execution of the assignment. Additionally, it independently carries risks for its health or safety.

Types of contracts

If it is required to draw up a contract with any employee, on the basis of which it is necessary to perform a one-time job, then a GPC agreement is often chosen for this. It can be presented in several varieties:

• contract, and the formation of this document is governed by Ch. 37 Civil Code;
• research;
• GPC contract for the provision of services described in Sec. 39 GK;
• for the transportation of certain goods, for which Ch. 40 GK;
• transport expedition, and this process is regulated by hl. 41 GK.

Additionally, a mixed contract stands out, but the features of its formation are prescribed in Art. 421 GK. The most popular are the contract of work and services. They differ in the result of the work of a specialist, and he can be not only material, but also presented in non-material form. It is allowed under the law of one citizen to attract to perform various works or services. In this case, the provisions of different contracts are entered into one document.

Pros for employees

Drawing up such an agreement has some advantages for the specialists themselves. If a GPC contract is drawn up for the provision of services, then the employee does not need to follow the requirements of the company's internal regulations. Additionally, he can independently attract other specialists to perform certain tasks.

It is not required by official documents to confirm the various parameters of the perfect work or the service provided. It will not be possible for the employer to indicate in the agreement the fulfillment of other duties, since under such conditions the document may be invalidated. Therefore, the hired specialist is protected from additional duties for which no funds are paid.

Employer Benefits

The drafting of such an agreement has advantages not only for the hired specialists themselves, but also for the direct employers. A GPC agreement with individuals is often concluded for the following reasons:

• it is much simpler and more profitable to formalize an employee under such a contract;
• it is advisable to use the agreement if you need to perform a one-time job or provide a service;
• it is not necessary for the temporary specialist to equip a separate workplace, as well as equip it with various equipment and other elements for performing labor activities;
• the contract clearly stipulates the timing of the specific task, and if these conditions are violated, the contractor must pay a fine;
• remuneration is paid after completion of work;
• no need to pay vacation, sick leave or provide the employee with additional guarantees;
• remuneration in size may be less than the minimum wage;
• no need to issue an order for employment, keep an employee’s personal card or enter data in the workbook.

Even in the preparation of such a contract, the employer will have to deal with the design of SNILS if the employee does not have this document.

Cons for companies

Drawing up such an agreement has not only advantages for the employer. There are some disadvantages of the GPC agreement. A service contract can only be drawn up with some employees, and also exclusively in a situation where you really need to do a specific job, so there is no way to get a specialist on staff.

If it is planned to conclude such an agreement several times with one person, then it is advisable to draw up a standard labor contract, otherwise it will be necessary to carry out this forcefully at the initiative of the labor inspection.

When is a contract re-classified as an employment contract?

There are certain conditions under which a GPC agreement may be forcibly retrained into a standard labor contract. These situations include:

• the text contains conditions that are inherent to a standard labor agreement, for example, there is information about the regular transfer of remuneration, the possibility of taking a vacation, or providing social guarantees;
• under such an agreement, permanent, not one-time, work is performed;
• there is no documentation that confirms that work was performed under the GPC agreement;
• renegotiation of this document was performed many times;
• Along with full-time employees of the company, people working on GPC receive remuneration, so funds are transferred twice a month.

In all the above cases, the labor inspectorate may require the employer to reissue the document.

How long is the deadline?

The term for which such an agreement is concluded depends on how long it takes for the contractor to complete a specific task. In this case, it is important to correctly consolidate the existing result. As a standard, a GPC contract is a short-term contract.

If it is divided into several contract agreements, which are concluded immediately one after another, then under such conditions the labor inspectorate may require the formation of a standard labor contract from the employer.

How are taxes paid?

Based on this agreement, the employee receives a certain remuneration, represented by his earnings. Therefore, it is required to pay under the GPC NDFL contract. This process is carried out by the direct employer acting as a tax agent.

The company must independently at the end of the year transfer to the FTS department information on the amount of taxes transferred for all employed workers. Contributions under the GPC agreement are additionally taxed by insurance premiums, therefore it is required to transfer funds from them to the Pension Fund and other state funds.

If the contractor is an officially registered individual entrepreneur, then he must independently calculate and pay various contributions for himself.

Is an entry in the work book?

When a citizen works under a GPC agreement, it is not required to enter any data into the work book.

If the employer acts as the initiator for entering information into this document, this may become the basis for the re-qualification of the agreement.

How is a contract made?

If a GPC agreement is chosen, the employee and employer must be well versed in the rules for its preparation and conclusion. The GPC agreement is a fairly simple document, therefore, its formation is not difficult. For this, the requirements are taken into account:

• a contract is created only in writing;
• the text indicates which work should be performed by the contractor;
• the hired specialist decides how he will achieve his goal;
• the document is formed in duplicate, since the document must be on each side of the transaction;
• necessarily an addition to this contract is the act of work performed or services rendered.

If controversial issues arise, then they are resolved on the basis of the provisions of the Civil Code. Payments under the GPC agreement are also agreed in advance by the two parties, after which the established amount of remuneration is prescribed in the agreement.

Which points are significant?

In order for a document to be correct and legally binding, it must contain basic substantive provisions. A sample GPC contract for the provision of services is located below.

When compiling this document, information must be indicated:

• a preamble containing information about the customer and the contractor;
• the subject matter of the agreement is clearly described, which is defined as certain work or service;
• terms are prescribed during which the task should be completed by the contractor, and in addition there may even be intermediate periods;
• the quality of the result of the work, moreover, the possible warranty period intended for making claims by the customer is additionally indicated here;
• the procedure for the implementation of work, for which all the requirements of the employer for the technologies and equipment used are described;
• the amount of remuneration for the contractor, which may be represented by a fixed amount or tariff, depending on the time spent or the amount of work performed;
• settlement procedure, since the form of payment may be different, so often not only funds are transferred, but valuable property is transferred;
• rules for receiving the result, describing the method on the basis of which the result of the work will be transmitted;
• responsibility of the parties;
• opportunity to amend or terminate the contract;
• dispute resolution methods.

If necessary, the participants themselves can make additional information in this agreement, on the basis of which the relations arising between the two parties are regulated.

You can terminate such an agreement by drawing up a peace agreement or through a court.

Conclusion

Thus, the GPC contract is considered a sufficiently demanded contract drawn up between the contractor and the employer. It has numerous differences from a standard employment contract.

Both parties to the transaction should be well versed in how this document is correctly formed so that it has significant and important conditions. Under certain circumstances, it is possible to re-qualify a GPC contract as a standard labor agreement.