Work with individuals under civil law contracts (hereinafter – CLC) has always been under increased scrutiny by regulatory authorities. The newly adopted revision of Article 10.18 of the Code of Administrative Offenses strengthens liability and sets new priorities.

What should businesses pay attention to when concluding a CLC with an individual?

1. Written form and mandatory terms: formalism becomes costly

Article 10.18 of the Code of Administrative Offenses previously provided liability for failure to comply with the written form of CLCs concluded with individuals, as well as for the absence of mandatory terms required by legislation in the contract.

What new provisions has the legislator introduced?

Failure to comply with the written form of a CLC:

• The amount of fines has been significantly increased (for legal entities – up to 200 base units, and in case of repeated violation within one year – up to 300 base units); and

• The list of persons who may be held administratively liable has been expanded. In addition to legal entities and individual entrepreneurs as contractual counterparties, liable persons may include culpable employees of the contractor (customer), including the head of the legal entity. Liability for such persons is pre-determined in the amount of up to 50 base units (in case of repeated violation – up to 100 base units).

Absence in a CLC of terms established by legislation (so-called mandatory terms).

Important: taking into account amendments to Edict № 314 «On Certain Measures to Protect the Rights of Citizens Performing Work Under Civil Law and Employment Contracts» (hereinafter – Edict № 314), which enter into force on May 15, 2026, the following terms are mandatory for inclusion in a CLC concluded with an individual:

1. The procedure for settlements between the parties under the contract, including payment deadlines and amounts payable;

2. The customer’s obligation to pay mandatory insurance contributions for individual counterparties to the state social insurance fund;

3. Obligations of the parties to ensure safe working conditions and liability for failure to fulfill them;

4. Grounds for early termination of the contract;

5. The customer’s obligation to pay mandatory insurance contributions for accident and occupational disease insurance, if the work/services under contracts with individuals are performed at locations provided by the customer;

6. Other terms established by legislation for such contracts (in particular, according to the Civil Code (Articles 656, 657, 662), for work contracts — specification of the subject matter, including content, types, and final tangible result of the work performed, as well as the start and completion dates).

The provision on liability for the customer’s failure to pay for completed work, services rendered, or created intellectual property (in the form of a penalty of not less than 0.15 percent of the unpaid amount for each day of delay) has been excluded from the list of essential terms determined under Edict № 314.

For the absence of mandatory terms in a CLC, a fine of up to 25 base units is pre-determined (as before). However, under the new regulation, the company itself is not fined. Only individuals, including employees of the legal entity responsible for the violation, may be subject to liability.

2. Timeliness of payments: payment under CLCs equated in strictness to wages

A sanction has been introduced for failure or incomplete fulfillment by a legal entity or individual entrepreneur of obligations to individuals regarding payment for completed work, rendered services, or created intellectual property.

From June 19, delays in payment under work contracts will entail sanctions comparable to violations under employment contracts. Non-payment or late payment of remuneration for completed work/services entails a fine for the customer’s official of up to 50 base units (in case of repeated violation within one year – up to 100 base units).

Although Article 10.18 of the Code of Administrative Offenses regulates civil law relations, it operates in conjunction with the updated Article 10.12 of the Code of Administrative Offenses (which we discussed earlier).

Reminder: if signs of employment relations are detected in a CLC (work schedule, provision of a workplace, monthly fixed payments), the contract may be recognized as a “disguised employment contract.” In this case, the company faces a fine of up to 100 base units (in case of repeated violation – up to 300 base units) for allowing work without a formal employment contract.

Our recommendations:

1. Conduct an audit of CLCs: ensure that all mandatory (essential) terms required by current legislation are included (including occupational safety and insurance provisions).

2. Maintain payment discipline: payment under the certificate of completed work must be made on the date specified in the contract. Even a one-day delay is grounds for imposing penalties.

3. Differentiate relationships: if a contractor under a CLC is subject to internal labor regulations, this is not a CLC. Review the status of such contractors.

Still have questions? We are ready to provide support and configure your contractual compliance system so that you can feel confident.