PROHIBITION ON EMPLOYERS ENTERING INTO CIVIL LAW CONTRACTS
From June 8, 2026, amendments to the Labour Code of Kazakhstan will come into force.
Our lawyers would like to highlight the most notable aspects that should be taken into account.
The practice of entering into civil law contracts will be prohibited.
Previously, employers often engaged new staff under civil law service agreements. However, under the new amendments, from June 8, 2026, courts and state authorities may recognize individuals providing services to a company as employees if the relationship between the parties contains characteristics of an employment relationship.
Potential consequences for employers
If an individual has been working for a company under a civil law contract (often referred to in companies as a GPH contract — a civil law service agreement), for example since 2024, such an individual may be recognized as an employee of the company with retroactive effect, potentially starting from 2024.
As a result, the company may face fines imposed by the labour inspectorate, and may also be required to pay all mandatory contributions, compensation for unused vacation, and other employment-related payments, as well as payroll taxes with penalties, as if the individual had been an employee from 2024 onwards.
Although the law does not generally have retroactive effect, under the Law of the Republic of Kazakhstan on Legal Acts, retroactive application may be permitted if it improves the position of citizens.
Recommended actions
- Companies that have GPH contracts should review such agreements for signs of employment relationships;
- If there is a high risk that an employment relationship exists, enter into formal employment contracts with such individuals before June 8, 2026;
- Close existing GPH contracts through termination agreements and ensure all necessary acts of completed work are signed before June 8, 2026;
- For GPH contracts where no employment relationship exists, strengthen contractual provisions stating that the contractor is not subject to internal labour regulations and include other clarifying terms.