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Kazakhstani companies are bracing for a significant shift as new labor legislation mandates a re-evaluation of civil law contracts. Starting June 8, 2026, changes to the Labor Code will impact how businesses engage with individuals, potentially forcing many to bring previously contracted workers back onto their official payrolls.

Understanding the Contractual Shift

The core of this change lies in amendments to Article 27 of the Labor Code, signed into law by the President on April 7. The new regulations prohibit the use of civil law contracts with individuals if such agreements exhibit characteristics of an employment contract. This distinction is crucial for businesses that have utilized civil contracts to manage their workforce.

Civil vs. Employment Contracts: Key Differences

Civil law contracts typically involve an executor completing a specific, results-oriented task. These contractors are not bound by the company's internal regulations, can engage subcontractors, and are paid for the outcome. Importantly, they do not receive the same social guarantees as employees, such as paid sick leave or maternity benefits, nor are they subject to standard working hours or labor protection norms.

In contrast, employment contracts define roles based on a specific position, require personal participation in the employer's operations, adherence to internal rules, and guarantee a regular salary. Regulatory bodies will now scrutinize agreements to determine if they represent genuine civil contracts or disguised employment relationships.

Implications for Businesses and Employees

Tax specialist Alexander Kaplan explains that if an individual, previously on a company's payroll, now operates as a sole proprietor or self-employed but performs work tied to a specific profession, qualification, or position, this relationship will no longer be recognized as a civil contract. Such individuals will likely need to be reinstated as official employees, receiving salaries and all associated contributions.

This change is expected to affect industries that have frequently used this contracting model, including construction, transportation, and retail. The move effectively ends a practice that allowed some businesses to save on social payments, medical insurance, and vacation pay. Experts estimate that the burden on payroll funds could increase by approximately 40% for companies, compared to the roughly 24% under a simplified regime for sole proprietors.

Navigating the New Regulations

Despite the clarity on the intent, legal experts like Sabira Salimova point out the need for specific mechanisms for enforcement. Questions remain about which body—labor inspectorates or courts—will reclassify contracts. If it's the labor inspectorate, their audit checklists will need updating. If through the courts, pre-trial dispute resolution processes may require adjustments.

Currently, conciliation commissions primarily handle labor disputes and often do not engage with civil law contracts. If these agreements are to be equated with employment contracts, the powers of these commissions may need to be expanded.

With less than two months until the new regulations take effect, employers heavily reliant on civil law contracts are advised to conduct an audit of their existing agreements.