Policy: Legal-financial aspects of work contracts
Legal aspects
Practically every individual associated with Future Worlds Center has to comply with the organization's principle of independence. The organization might consider its associates as committing their full time and effort to their projects; however, from the legal point of view, they are independent contractees.
Since our associates considered as contractees and not employees, they shoule be registered as self-employed and arrange to pay their own personal social insurance and other related taxes, as the organization is not obliged to cover those costs for associates (who are not employees).
Each individual receiving income from the organization should possess the following work related documents:
- Gentlemen's' Agreement: considered as a welcoming letter referring to a minimum monthly payment without contractual bond
- Employee/Service Agreement: specific project-task related contract
Financial Aspects
Productive Hours
Definition of productive hours (time) of an associate can be vary due to the different personnel cost approach of the European Union programs.
Personnel cost based on Man-month
Personnel cost based on % of time
In case of projects defining staff involvement (mainly projects funded by the Europeaid Program) as a certain percentage (%) of a full time assignment, the following criteria must be taken into account during the calculation of the productive hours charged on the project:
- Future Worlds Center considers the associate full time, if s/he devotes minimum 1,680 hours per annum to his/her task, i.e. average 140 hours per month.
- Fluctuation of the monthly productive hours during a calendar year cannot exceed the 30% of the average monthly hours stated above in 2 consecutive months.
The above principles must be implemented in case of pro-rata calculation.
Reconciliation of cost
The typical case is that the organization guarantees each new person a minimum monthly income for a period that is typically 1 year. The same individual might have multiple contracts with the organization (one for each project in which s/he participates), or one contract which covers one or more projects from which the individual has financial benefit. In both cases, the contract should have an attachment that clearly specifies the daily (or sometimes hourly) rate that the person may charge the organization, as well as the maximum number of days (or hours) that the person can charge towards involvement in a specific project. The Financial Unit issues a monthly payment of the Minimum Monthly Payment