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

Undocumented employees are the most common violation.

2 August 2021

Materials are published 3 times per week

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.

Inspections and violations detected by the State Labor Service of Ukraine
MonthJanuary 2020FebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecemberJanuary 2021FebruaryMarchAprilMayJune
Inspections7284,327718371172914261,3991,038766609291610804659640615
Violations764321413115326950641627116790195237191189221

«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.

Penalties charged and paid
Year201920202021
Penalties charged1,618,000,000314,600,00099,400,000
Penalties paid99,400,00034,100,00023,100,000

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