How to punish an employer for unofficial employment? What fine does he get?

A significant share of the expenses that business entities incur monthly falls on wages and deductions from them. In order to save a little money, owners increasingly prefer to carry out informal (without documentation) employment. Sometimes this step is beneficial not only to management, but also to the employee himself. However, it must be remembered that the law provides for liability for this action.

Labor legislation establishes that an employment relationship is considered formalized if an employment contract is drawn up and signed between the parties.

The concept of informal employment does not exist in the law. However, by analogy it can be understood that this is a type of relationship in which an employment contract is not signed between the parties, an entry is not made in the work book, and management will issue the salary unofficially “in an envelope.”

However, such an employee is not considered a full-time employee, he is not listed in any documents and insurance premiums are not transferred to him. Therefore, this period of work is not included in his pension experience.

Important! The law does not allow work to be performed without an employment contract being signed with the employee. This will be an offense on the part of both the company and the employee himself.

Pros and cons of working without an agreement for an employee

For an employee, this mode of work has both its pros and cons.

Why doesn't the employer formalize it?

The first and main reason why an employer avoids concluding a formal employment contract is financial. The absence of an employment contract allows companies to:

• Do not pay insurance premiums to funds;
• Do not bear the costs of paying for non-working time in terms of vacations and sick leave when the employee does not make a profit;
• Eliminate additional administrative costs associated with the preparation of large amounts of documentation.

In addition, the procedure for parting with a candidate they don’t like is significantly simplified for the employer, including without paying the required salary.

At the same time, the employment contract fixes most of the employee’s work parameters in part (Article 57 of the Labor Code of the Russian Federation):

• Places of work;
• A clear description of the functions it performs;
• The procedure for calculating and the amount of earnings;
• Working hours, including shift duration, start and end times;
• Working conditions provided by the employer.

The absence of documented conditions of employment deprives the employee of the guarantee of compliance with oral agreements and opens up the widest scope for abuse by an unscrupulous employer.

Therefore, a citizen who agrees to work unofficially may not receive the payments and compensation due to him by law from the employer. On the other hand, if such an employee causes damage, the employer will not be able to legally recover it.

Pros and cons for the employer

Most often, it is the employer who initiates the work without drawing up a contract. This situation is beneficial, first of all, for him.

Let's consider the advantages and disadvantages of an unconcluded employment agreement for a company:

The law does not contain cases in which the parties may not draw up an employment agreement. On the contrary, it contains an obligation for the employer to draw up an agreement within 3 days with the employee who has begun to perform his duties and has received permission, with the employer’s knowledge, to work in the company.

Advantages and disadvantages of hiring an employee without an employment contract for the employer

In most cases, the initiative for informal employment comes from the administration of the company or individual entrepreneur. This is due to the fact that this situation is most beneficial for the employer.

The following advantages of not concluding a formal employment contract with employees can be highlighted:

• An opportunity to save in such a situation on paying insurance premiums to the Pension Fund and social insurance. In case of unofficial registration. The employer does not make any contributions to salaries, so these funds remain with him. The savings in this situation amount to more than 30% of labor costs, which is a significant amount.
• There is no need to follow all the stages of hiring and dismissing an employee; therefore, time is reduced and the procedure for an individual’s hiring and dismissal is simplified. With such employment, an employee can be fired immediately for an unreasonable refusal to carry out an assignment.
• If there is a shortage of workers, the administration can attract existing employees without complying with the standard length of the working week, paying them remuneration based on an oral agreement, which is often less than the options established by law (for example, double pay for weekends).
• If a company experiences interruptions in operations, then in such a situation the company management does not pay for downtime, which also saves the company money.
• In the absence of official employees, the company does not keep personnel records, which allows the employer to reduce the composition of its reporting.
• With such employment, the employer has the opportunity not to fulfill social guarantees to the employee, which are defined in the Labor Code of the Russian Federation. Therefore, he may not pay for sick leave, vacations, etc. This also allows him to reduce his expenses.

In addition to the advantages of such employment, there are also negative aspects, which include:

1. If an employee causes damage to the employer, he cannot be held liable; it implies the existence of a concluded agreement between the parties.
2. There is always a risk that such relationships between the company and its employees will become known to the competent authorities, and working without an employment contract will become the responsibility of the employer in accordance with the law.

Liability for LLC

The responsibility of the employer-company for failure to draw up an employment contract is quite serious than that of entrepreneurs.
For minor violations, a fine can only be issued to the organization. However, if the number of unregistered workers is significant, then the officials and the manager bear the punishment.

The fine starts from 50 thousand rubles. If there are large volumes of unpaid taxes, the case may be transferred to criminal status.

What threatens the director of the organization

Working without an employment contract is the responsibility of the employer-manager in both administrative and criminal cases.

In case of administrative liability, a fine of up to 20 thousand rubles or disqualification of up to 3 years is imposed.

If the case is transferred to the criminal category, the fine will be from 150 thousand rubles, and there may also be imprisonment for up to 2 years.

If the underpayment of taxes is qualified as particularly large, then the fine will be from 200 thousand rubles, and the period of imprisonment will increase to 6 years.

Attention! Also, the guilty person will be prohibited from holding a leadership position or engaging in certain activities.

Responsibility of the individual entrepreneur

In the general situation, a fine is imposed on the entrepreneur, the amount of which is established by the administrative code. But such a step is usually possible only if several people worked informally for the individual entrepreneur for a short period of time.

If the number of employees with whom there are no labor agreements is significant, then criminal liability may already be imposed for this. The general qualification of the situation is based on the amount of tax unpaid to the budget.

A criminal case usually results in a real prison sentence rather than a suspended sentence. In addition, individual entrepreneurs are awarded a serious fine, which must be paid along with the repayment of tax debts. In such a situation, you usually need to make tax payments first, and then pay the fine.

Attention! Also, the result of the trial may be the imposition of a ban on activities in the area where the violation was committed.

What does an employee face for working without registration?

The law does not establish punishment for an employee if he operates without an employment contract, since the obligation to draw up a contract lies with the employer.
At the same time, the employee himself has no way to force the administration to sign the contract, except for filing complaints. An employee can send a registered letter to the manager with a request to sign an employment agreement with him. In the event of litigation, this letter will serve as evidence that the employee wanted to work officially, and the company’s management refused him this.

Penalties for failure to conclude an employment contract with an employee, its incorrect drafting, or execution of a GPC agreement instead of an employment agreement are established in Parts 5 and 6 of Art. 5.27 Code of Administrative Offenses of the Russian Federation.

Employment options

Employment in practice is of two types:

• Official . In this case, labor relations are formalized by drawing up one of two documents:
• employment contract;

civil contract.

An employment contract is concluded with all employees hired for permanent activities. It comes in two types:

• urgent, that is, work is expected for a certain period of time;
• unlimited

The document must contain the following information:

• information about the parties;
• working conditions;
• the subject of the contract, that is, the labor function;
• terms of payment;
• place of work;
• start date of activity.

A civil agreement is concluded when an employee must perform certain work or services. In fact, it is a contract. In such a relationship, the employer does not have to pay pension contributions, provide certain working conditions, pay for vacation, etc. Some unscrupulous employers deliberately use such an agreement instead of an employment agreement. In this case, the employee has the right to go to court to force the execution of correct documents and payment of compensation. Sometimes employers offer limited conditions as part of formal employment. For example:

• the employee is registered for a reduced day, although in fact he works full time;
• he is officially paid the minimum wage, and the balance is paid in cash.

The legal consequences of such employment relationships are discussed in detail in the following video:

In what cases can a director be subject to criminal penalties?

Criminal liability is imposed when the employer does not make mandatory tax payments to the budget.

If the amount of underpayment is determined to be large:

• A fine in the amount of 150,000-300,000 rubles;
• Salary or other earnings for a period of 1-2 years;
• Assignment of forced labor for a period of up to 2 years with a ban on engaging in certain activities for a period of up to 3 years;
• Arrest for up to 6 months;
• Imprisonment for up to 2 years with a ban on engaging in certain activities for up to 3 years.

If the violation is committed by a group of persons, or the underpayment is qualified as a particularly large amount:

• A fine in the amount of 200,000-500,000 rubles;
• Salary or other earnings for a period of 1-3 years;
• Assignment of forced labor for a period of up to 5 years with a ban on engaging in certain activities for a period of up to 3 years;
• Imprisonment for up to 6 years with a ban on engaging in certain activities for up to 3 years.

Attention! Criminal liability can be avoided if this crime is committed for the first time, and the company voluntarily pays off all debts on taxes, penalties and fines.

How to prove the fact of labor relations

As soon as management announces to an employee who is not officially employed that he is being fired, he must immediately take appropriate measures to protect his rights.
He needs to try to get from his employer all the documents on which he signed. It is necessary to collect this evidence as quickly as possible, and under no circumstances notify your management about this, as they will interfere with this. This evidence may simply be destroyed.

After this, it is necessary to send an application to the management, which must contain a requirement to include this temporary period of work in the labor record.

This application must be handed over to management and one copy with an incoming mark must be received. However, it is best to send such an application to management by registered mail with acknowledgment of receipt.

Attention! It is advisable for the employee to find witnesses who can confirm the fact of his employment at this enterprise. They will most likely have to appear in court and confirm that this company employee carried out the instructions received from the company administration.

How to convince a director to formalize an employment agreement

If management does not register an employee, it will be very difficult to convince him to do so. You can try to talk to the director, tell him how he likes the work, what suits him with the remuneration for his work, and the daily routine. However, he needs to be officially employed for this job.

If after this conversation, the manager refuses the employee, then he should send an official letter addressed to him. The best way to do this is by letter.

In this document, he needs to reflect that he has been working for a certain period of time, and the administration has still not issued him an employment contract and an employment order.

Attention! It is advisable to include in the letter that unofficial employment is a violation of labor law, in terms of Article 67 of the Labor Code of the Russian Federation.

When an employee understands that the administration is avoiding concluding an employment contract by all means, he can complain to the labor inspectorate, the prosecutor's office, and the court.

What does it mean?

Informal employment is a type of relationship between an employee and an employer, which represents labor activity without a formal contract .
There is no such concept in the Labor Code of the Russian Federation. According to the law, during hiring, the employer is required to draw up an employment contract describing all the conditions for future activities. During unofficial reception, the worker does not sign any documents, is not included in the payroll of the enterprise, and no entry is made in the work book. That is, the period of such work is not counted towards the length of service.

Labour Inspectorate

The employee submits an application to the labor inspectorate about the employer’s non-compliance with the law, either independently or through his representative.

In this document, a company employee must describe in detail the situation that indicates a violation by the enterprise administration (unreasonably refusing to formalize an agreement) and ask the inspectorate to take appropriate action.

The application must be accompanied by documents available to the employee confirming the existence of an employment relationship between him and his employer.

The inspector must, on the basis of the received application, identify that there is an employment relationship without concluding an employment contract, then he will issue an order and bring the employer to administrative liability.

What should an employee do if he is not officially registered?

Even before the start of labor operations, the candidate for the position should clearly discuss the terms of employment and insist on the formal conclusion of the contract. If, nevertheless, it turns out that you have to work without registration, Art. 352 of the Labor Code of the Russian Federation allows the following methods of protecting violated rights:

• Self-defense - consists of a written demand from the employer to eliminate violations, as well as the possibility of suspending work if wages are not paid for more than 15 days;
• Contacting a trade union (however, if you are unofficially employed, you don’t even have to think about its presence);
• Complaints to state supervisory authorities: State Tax Inspectorate and the prosecutor's office;
• Filing a claim in court.

Considering the nature of the violation described, the first 2 methods are practically inapplicable , since the employer, in this situation, has already chosen an illegal version of the working relationship. Therefore, if he does not want to formalize an employment contract and no persuasion works on him, he must immediately contact the authorized bodies or the court.

The effect of contacting any of these authorities will largely depend on the list of evidence that the employee can provide in defense of his interests.

Appeals to the inspectorate or prosecutor's office are made in any form , indicating the identification data of the relevant body and the applicant, as well as a detailed description of the circumstances of the offense and the requirements for the employer on the part of the applicant. The State Tax Inspectorate and the prosecutor's office conduct inspections within 30 days of the application, after which they issue an order to the employer and report the results to the employee. If signs of other crimes are detected, these institutions may transfer the materials to the court for further proceedings.

Filing a claim with the district court in such situations is the most effective method , but it requires the collection of a solid evidence base. In addition, even if a court ruling is rendered in favor of the employee, he is unlikely to be able to continue working in this company in the future, since the employer will probably look for ways to get rid of him.