OKVED code 74.50 - Labor recruitment and selection

The services of recruitment agencies are needed both by ordinary citizens who want to find a job, and by organizations that need qualified personnel. HR specialists carefully check potential employees and employers, so cooperation with them minimizes possible risks. Such services are quite in demand, and some entrepreneurs decide to take advantage of this by opening their own recruitment agency.

Current legislation obliges business owners, when registering with the tax service, to indicate in the application the OKVED encoding, consisting of at least 4 characters. You can select one code, or you can specify several. The number of specified encodings is not limited, but only one of them will be the main code.

In 2021, the OKVED code “Personnel Recruitment” should be taken from the current edition of the OKVED2 classifier (another name ˗ OK 029-2014 (NACE Rev. 2), approved by Order of Rosstandart dated January 31, 2014 No. 14-st).

These encodings are suitable for both organizations and individual entrepreneurs.

Read also: Changing OKVED codes: step-by-step instructions

What is the OKVED code and how to choose it?

The OKVED code is a kind of economic identifier of an organization or individual entrepreneur. It allows government departments (tax service and Rosstat) to determine what activities a business entity conducts. Also, OKVED encodings are used to collect and analyze statistical data on the activities of entrepreneurs and legal entities. It is important that the actual activities correspond to those declared during registration with the Federal Tax Service. Otherwise, the subject may be brought to administrative liability under Art. 14.25 of the Code of Administrative Offenses of the Russian Federation, fined him 5,000 rubles.

The need for code for outsourcing companies and employment agencies

Based on paragraph “a” of Art. 12 of Federal Law No. 129-FZ dated 08.08.2001, when registering in the Unified State Register of Legal Entities, companies submit an application in form No. R11001 (approved by order of the Federal Tax Service of Russia dated 08.31.2020 No. ED-7-14/617), in which it is necessary to indicate the OKVED codes for the main and auxiliary activities (clause 45 of the Application Requirements).

Thus, regardless of what type of business the company intends to engage in, it is required to indicate this information during its state registration.

Currently, there is a list of OKVED 2 codes approved by Rosstandart order dated January 31, 2014 No. 14-st. The organization must independently select the code corresponding to its activities from the specified classifier.

Austaffing: OKVED code

Outstaffing essentially means the transfer of employees by an organization outside the official staff. They perform work on the territory of the customer organization and adhere to its internal labor regulations, but at the same time they belong to the performing organization, which pays them a salary. This type of activity is regulated by Article 341.1 of the Labor Code of the Russian Federation.

Only accredited private employment agencies and individual legal entities have the right to provide personnel to other organizations. Therefore, if an employer is going to formalize outstaffing, he needs to enter into an agreement with such an agency. And the agency must conclude employment contracts with the employees provided to the customer.

The selection of the OKVED code for outstaffing is carried out as follows:

• In the OK 029-2014 classifier you need to find section N “Administrative activities and related additional services”.
• Then you need to go to class 78 “Employment and personnel selection activities.”
• Organizations that carry out outstaffing activities can use code 78.10 “Activities of recruitment agencies” or code 78.30 “Other recruitment activities”.

What in OKVED 2 is suitable for outsourcing

The OKVED 2 classifier does not contain the exact OKVED code for outsourcing personnel for various purposes. However, such activities fall under the service . Therefore, it is advisable to choose a code based on the work for which the contractor’s personnel will be involved. Most often this is:

• accounting services;
• legal services;
• cleaning of premises;
• transport services.

Therefore, you first need to find the section with the corresponding activity, and then select the most appropriate service code in the classifier.

The list given in the table is not exhaustive , since the list of functions that can be transferred by the customer to an outsourcing company is unlimited .

Outsourcing: OKVED code

Outsourcing involves one organization hiring workers from another organization in order to perform certain tasks with a guaranteed result. At the same time, employees are not included in the organization’s staff and are not on its territory during the entire working day. The customer company pays money to the performing company for the final result, regardless of which employee and how it was achieved. Services are provided to the customer on the basis of a standard civil law contract, and employment contracts with employees are concluded by the performing company.

When determining the OKVED code for personnel outsourcing, the main direction of the organization’s activities is taken into account, i.e. what services will be provided in accordance with the outsourcing agreement. When choosing OKVED outsourcing for 2021, the following encodings can be used:

• 69.10 – carrying out activities in the field of law;
• 69.20 – provision of services in the field of accounting, tax consulting, financial audit;
• 70.22 – provision of consulting services on commercial activities and management;
• 66.19.4 – provision of advice on financial intermediation;
• 78.30 – other recruitment activities;
• 82.99 – provision of other support services for business.

Companies can also choose the code that suits them in class 96 “Activities for the provision of other personal services.”

If a business owner has doubts about the correctness of the selected OKVED encoding, he can submit a written request to the territorial department of Rosstat. You can find out the address of the territorial body on the official ]]>Rosstat website]]>.

"Outsourcing": OKVED

Outsourcing as a separate line of business emerged largely thanks to the work of recruitment agencies. This type of activity involves the transfer by an organization of certain functions of economic activity to another company or individual on the basis of an agreement. Outsourcing can be complete or partial.

The selection of code for outsourcing (OKVED) is carried out as follows:

• We look for section “M” in the OKVED2 directory;
• in class 69 we select the appropriate code.

In class 69 the following activities are grouped:

• representing the interests of organizations and individual entrepreneurs in courts;
• providing legal advice;
• activities of state notaries;
• provision of services in the field of accounting;
• tax consulting;
• conducting a financial audit.

When selecting the OKVED “Outsourcing” code, you should also pay attention to the following encodings:

• 70.22 – consulting on commercial activities;
• 66.19.4 – provision of advice on financial intermediation;
• 82.99 – provision of other support services for business, not included in other groups;
• 96.0 – provision of other personal services.

Entrepreneurs should be prepared for the fact that deliberately specifying OKVED encodings that do not correspond to actual activities may result in administrative penalties under Art. 14.25 Code of Administrative Offenses of the Russian Federation. The fine will be 5 thousand rubles. And if a business owner indicates codes from the OKVED1 directory, which are no longer valid, he will be denied registration.

Read also: Is it possible to carry out activities without OKVED

OKVED code table - outstaffing

How to determine the OKVED code “Personnel Recruitment” in 2021

When selecting a code:

• In the OKVED2 directory we look for section “N”.
• Next we move on to class 78.
• In groups 78.1, 78.2, 78.3 we select the most suitable OKVED for personnel selection.

The following activities are grouped in class 78:

• maintaining a list of current vacancies;
• posting applications from job seekers;
• personnel search;
• selection of candidates;
• activities of casting agencies;
• work of employment agencies online;
• providing enterprises with hired labor on a contract basis;
• other activities.

This class does not include the activities of theatrical and artistic agencies involved in personnel selection. The code for this type of activity is 74.90.

Specifying codes when performing registration actions

The changes mentioned in the information of the Federal Tax Service are set out in the Order of the Federal Tax Service of the Russian Federation dated May 25, 2016 No. ММВ-7-14/ [email protected] , which entered into force on June 28, 2016. It contains amendments made to the forms of documents submitted to the registration authority during the state registration of legal entities, individual entrepreneurs and peasant (farm) farms, approved by Order of the Federal Tax Service of the Russian Federation dated January 25, 2012 No. ММВ-7-6/ [email protected] In all forms that organizations and individual entrepreneurs submit to the registration authority, codes OK 029‑2001 (NACE Rev. 1) (hereinafter referred to as OKVED 2001) have been replaced by OKVED 2 codes.
Information on types of economic activities available as of July 11, 2021 will be brought into line with OKVED 2 automatically taking into account the transition keys that were developed by the Ministry of Economic Development (see Letter No. D28i-221 dated 02/09/2016). Here is a fragment of transition keys.

The new OKVED was put into effect on February 1, 2014, with the establishment of a transition period and the abolition of the previous classifier from 2015. However, the transition period was subsequently extended twice. Despite the fact that the previous OKVED will be canceled as of January 1, 2017, the Federal Tax Service intends to use codes according to the new OKVED from mid-2016.

OKVED codes and insurance premium rates

On the pages of the magazine, the procedure for applying reduced rates of insurance premiums by organizations engaged in real estate management was discussed in detail[1].
In addition, the type of activity carried out influences the choice of occupational risk class, which determines the rate of insurance contributions for compulsory social insurance against industrial accidents and occupational diseases. By Decree of the Government of the Russian Federation dated June 17, 2016 No. 551, amendments were made to clause 13 of the Rules for classifying types of economic activity as professional risk. They will come into force on 01/01/2017.

As we can see, from 2021, the regulatory act will directly provide for the right of officials who have not received confirmation of the type of activity from the organization to calculate insurance premiums based on formal information from the Unified State Register of Legal Entities. Please note that they have always acted this way, however, in court, insurers defended a different position: it is impossible to charge premiums for a risk class corresponding to a type of activity that was not actually carried out (see Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated July 5, 2011 No. 14943/10[2 ]). At the same time, it is worth considering that the Presidium of the Supreme Arbitration Court considered the case in relation to legal relations that arose before 2011, when it became mandatory to update information about OKVED codes in registers. From 2021, the approach of officials, which is disadvantageous to policyholders, will be enshrined at the regulatory level. Therefore, you need to carefully monitor the OKVED codes entered in the Unified State Register of Legal Entities, and also promptly send confirmation of the type of economic activity being carried out to the Social Insurance Fund (see Order of the Ministry of Health and Social Development of the Russian Federation dated January 31, 2006 No. 55).