1. Outstaffing: principles, advantages and adoption in Ukraine Dmytro Sai National Mining University

2. Outline 1.Outstaffing concept 2.Adoption in Ukraine 3.Practical example

3. Outstaffing concept Company Employment agency The company withdraws staff out of its personnel: previous employees become listed as staff of an employment agency

4. Outstaffing concept Workmen are listed as staff of a provider Executor makes a contract with a client – company that needs labor force or was their previous employer Staff continue or start working for the client company, but in fact they are not its employees

5. Outstaffing concept Company Provider The company gets employees against contract which actually are staff of a provider

6. Adoption in Ukraine Legal aspect There is no particular norm of law directly considering the concept of outstaffing or even regulating such legal relationship Chapter 63 of the Civil Code Contract of outstaffing is not contrary to the civil legislation but rather is a specific type of a service agreement Article 14.1.183 of the Tax Code In a way confirms the validity of an outstaffing contract

7. You may benefit in using outstaffing if… Your organization use the Simplified Taxation System, so you are not allowed to exceed the established number of employees You attract foreign nationals: this will effect a saving because employer is not to pay various insurance fees

8. Practical example Wage, UAH Unified social contribution (Єдиний соціальний внесок), UAH (3,6%) Individuals’ income tax (Податок на дохід фізосіб), UAH (15%) Amount to be paid an employee, UAH Unified social contribution (Єдиний соціальний внесок), UAH (≈ 38,4%) Total costs, UAH 50005000*0,036 = 180 (5000 -180)* *0,15 = 723 5000 -180- -723 = 4097 5000*0,384 = 1920 6920 Wage, UAH Individuals’ income tax (Податок на дохід фізосіб), UAH Bank fee (average amount), UAH Provider’s (outstaffer) reward per one worker a month, UAH (average amount) Total costs, UAH 5000(5000 -180)* *0,15 = 723 200350 6273 6920-6273 = 647 hryvnas or 10.31% (per one employee) !