Labor inspections: current situation and legislative trends

Earlier, lawyers of Legal Alliance Company have already spoken about the prohibition of inspection visits by the State Labor Service of Ukraine and development of a new draft act which in the opinion of the Cabinet of Ministers of Ukraine would restore the dubious authority of the aforementioned body.

On August 21st, 2019, the Cabinet of Ministers adopted draft resolution №823 according to which the State Labor Service of Ukraine regained the right to carry out inspection visits again. However, a few days later, the State Regulatory Service announced that it had previously refused from approving the act. This means that the Cabinet of Ministers of Ukraine repeatedly violated the procedure for adopting the resolution. Thus, its abolition is a matter of time, however, before that happens, let's look at the key points:

Not only the State Labor Service bodies, but also the inspectors of executive bodies of local authorities continue to be authorized to monitor compliance with labor legislation.

The list of grounds for such inspections was supplemented with the possibility of their initiation upon instructions of the Prime Minister of Ukraine, application of the Ukrainian Parliament Commissioner for Human Rights, deputy’s request, and in case requirements of the order are not satisfied.

At the request of the object of inspection, the labor inspector is now obliged to provide a copy of the inspection referral and make a corresponding entry on the state supervision activities register.

The term of inspection may not exceed 10 working days, beginning on the next day following the provision of the documents and explanations necessary for its conduct.

The list of persons who can provide explanations to the inspector during the inspection has been expanded - it can be any person now who has information about the state of compliance with the labor legislation.

The right to record inspection visits by means of audio, photo and video equipment has been defined.

Now, accountability measures are taken simultaneously with the introduction of an order only for the use of work of non-registered employees. Accountability measures are not applied to all other types of violations if the order is fulfilled in time.

Furthermore, the Cabinet of Ministers has made stylistic changes in terminology and certain formulations, however, in our opinion, the general content still contradicts the current legislation on state supervision and control.

However, there are also some mitigation of employers' liability in this area. On October 3rd, 2019, the Verkhovna Rada adopted Draft Law No. 1233 which reduces the amount of fines for admission to work without registration of an employment contract, registration of full-time workers as part-time workers, and payment of wages without charge of SSC and taxes. Such violations are proposed to be fined in the amount o four minimum wages (about UAH 19,000) instead of current thirty minimum wages amount (over UAH 140,000). However, such a penalty will be applied only for the second violation committed within 365 days from the date of a written warning.

In this way, the legislator seeks to restore the preventive nature of sanctions instead of punitive one and to reduce the pressure on businesses that use the work of employees by reducing penalties for violations of labor legislation in Ukraine.

We will inform you on further status of aforementioned Regulation №823 and Draft Law №1233.