What are the negative consequences with an unscrupulous outstaffer?


Outstaffing is a service that involves the removal of staff from the staff of a company to remove the load from the HR department and optimize work processes. A positive side effect is the reduction of costs within the enterprise due to the redistribution of resources.

The activities of outstaffing companies are regulated by the Law on Employment, in particular, the resolution on the activities of recruiting agencies dated June 5, 2013, and the Tax Code of Ukraine. If you choose an unscrupulous service provider, then you may be interested, including state labor inspectors.

The format of cooperation may become the main cornerstone, therefore it is important to immediately indicate in the contract that the services will be provided to you, and not the staff itself. Then the relationship between the customer and the personnel of the contractor will not be considered labor, and the regulatory authorities will not have a reason for close monitoring. In addition, the reason for the provision of such services should be stipulated (spelled out), ideally, the clause on the impossibility of fulfilling the entire volume of tasks on the client’s own resources.

To summarize, in order to avoid fines and lawsuits, the outstaffer must provide:
– proper service contract
– availability of the relevant NACE when registering your company
– proven reporting scheme that covers the issue of legality of cooperation

Otherwise, the client-customer will have to pay a fine for each illegal employee in the amount of 30 minimum wages, while the contractor will give up to 20 “minimum wages” for work without specialization.

For an attempt to evade taxes – which may also be noted by the fiscal service staff – up to getting under criminal liability and a fine of up to 50% of the amount of tax liability.

It sounds, of course, a little scary. In order not to repeat the mistakes of others, Recruit Alliance strongly recommends working only with trusted outstaffers working in the market for more than 10 years. If you have questions, you can contact us for a free consultation.