Every Third Inspection Conducted by the State Labor Service Reveals Labor Law Violations

This year may see a much higher number of inspections. The agency plans to double the number of inspections this year as compared to 2020. Back then, inspectors conducted as many as 10,429 inspections. In 2021, there are plans to inspect 21,150 companies.

The number of violations detected against employees increased in 2021. The year 2020 saw 28% of non-compliant employers, while it was 31% of such employers in 2021.

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Inspections and violations detected by the State Labor Service of Ukraine

Month	January 2020	February	March	April	May	June	July	August	September	October	November	December	January 2021	February	March	April	May	June
Inspections	728	4,327	718	3	7	117	291	426	1,399	1,038	766	609	291	610	804	659	640	615
Violations	76	432	141	3	1	15	32	69	506	416	271	167	90	195	237	191	189	221

«The State Labor Service of Ukraine normally checks companies for any violations of labor laws. However, inspecting officers are more often focused on cases of undocumented employment, i.e., the absence of an employment contract», 

— says Anhelina Klymchiuk, the lawyer at Miller law firm.

If a person is hired without a valid employment contract, the first and third groups of the simplified taxation system are given a caution. Other entities may expect to pay a penalty equal to 10 minimum salaries, i.e., UAH 60,000 for each employee.

Thirty minimum salaries or UAH 180,000 may be expected to be paid for any repeated violation. It is the maximum penalty that may be imposed for one undocumented employee.

Below are the cases where the labor inspecting officer is required to impose a penalty:

• Failure to allow access for inspection purposes.
• Inspection interference.
• Undocumented employment detected, in particular, any failure to enter into an employment contract or notify the State Fiscal Service of Ukraine of employment, or any failure to pay taxes.

All other issues to be corrected are specified in the order issued by the inspecting officer. Any company timely complying with any such order will not be prosecuted.

According to Ihor Dehnera, Deputy Head of the State Labor Service of Ukraine, the penalties charged are distinctly different from those actually paid following the inspections.

In 2019, a total of UAH 1.618 billion in penalties were charged with UAH 57.6 million actually paid. In 2020, UAH 34.1 million of UAH 314.6 million were paid with these figures being UAH 23.1 million and UAH 99.4 million respectively in early 2021.

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Penalties charged and paid

Year	2019	2020	2021
Penalties charged	1,618,000,000	314,600,000	99,400,000
Penalties paid	99,400,000	34,100,000	23,100,000