Why the title of the contract does not protect you
Courts and inspectors look at the actual relationship. If the contractor is integrated into the company's work in the same way as staff, the contract may be treated as employment whatever it is called. So risk has to be reduced in two places: in the text of the contract and in day-to-day practice. A careful contract will not help if the contractor clocks in, takes tasks from a department head and attends team meetings like everyone else.
Signs that increase the risk
The usual warning signs are: performing a function or a job role instead of delivering a specific result; being subject to internal work rules and a schedule; working at the client's workplace and on its equipment; a fixed monthly fee regardless of volume; long cooperation without separate tasks and acceptance certificates; no other clients; a job title in the staff structure or in an email signature; a pass, a corporate email account and a place in the org chart like an employee.
A particularly risky situation is when an employee is dismissed and immediately engaged as a self-employed contractor for the same work. In addition, Russia's professional income tax regime does not allow it to be applied to income from a current employer or from a former one if fewer than two years have passed since the employment ended. Before signing, check whether the contractor has worked for you under an employment contract.
What reclassification can lead to
If the relationship is recognised as employment, the client may be charged the taxes and social contributions payable for employees, along with late-payment interest and fines. The contractor gains employee rights: paid leave, sick pay and protection against dismissal. Questions from the labour inspectorate are also possible. The contractor is at risk too: if the conditions of the regime are breached, they may lose the right to use it for the disputed income.
The risk grows with the number of such contractors: moving a whole team onto contractor agreements gets noticed much faster than a single contract for a one-off task.
What to put in the contract
Describe the subject as a result or a specific service with clear criteria: what is delivered, in what form and by when. Use separate tasks or orders, each with its own price and deadline, and record acceptance with a certificate for each stage. The fee depends on volume, not on a month worked. The contractor organises the work, chooses the time and place and uses their own tools, unless the nature of the task requires otherwise.
State the contractor's status and their duty to tell you if they lose the right to the special tax regime, as well as the duty to provide a tax receipt for every payment. Do not include obedience to work rules, job duties, paid leave or a fixed schedule: such terms point directly to employment.
It also helps to describe how the parties interact: the result is accepted by a responsible person on the client's side, not by a manager handing out daily instructions. If the contractor needs access to the client's systems or premises, explain in the contract that this is tied to the task and limit access to it.
Client checklist
Before the contract: check the contractor's status in the tax authority's official service and make sure they have not been your employee in the last two years. In the contract: a result instead of a function, tasks, deadlines, acceptance, a fee per volume, independent organisation of work. In practice: no timesheet, job title or subordination, separate certificates and receipts for each payment, a status check before paying. If the contractor in fact works full time only for you, an employment contract is the more honest option.
How to do this in Legal
In JEEKSSHIRE 24 | Legal a service agreement and an acceptance certificate are created in the creation section. State that the contractor is self-employed, describe the result, deadlines, acceptance and payment, and choose the country and your role: the assistant asks about what is missing and leaves unknown details marked as fields to fill in. An existing contract can be opened in the review section, where you can ask the assistant which wording looks like employment. Creating documents is available with a paid subscription. The assistant's answers are prompts for your own check, not an assessment of the tax risks in your situation; if you work with contractors regularly, discuss the arrangement with a lawyer or tax adviser.