Labor inspections will be intensified – negative innovations from the government

The State Labor Service has finalized the draft resolution of the Cabinet of Ministers of Ukraine “Certain Issues Regarding the Implementation of Article 259 of the Labor Code of Ukraine and Article 34 of the Law of Ukraine “On Local Self-Government in Ukraine” the full text can be found at the link, after which it was sent for re-approval to the State Regulatory Service.

We would like to remind you that this draft resolution, among other things, approves the Procedure for State Control over Compliance with Labor Legislation and the Procedure for State Supervision over Compliance with Labor Legislation.

Next, we would like to draw your attention to some provisions of the Procedure for State Control over Compliance with Labor Legislation.

Thus, the Procedure for State Control over Compliance with Labor Legislation (hereinafter referred to as the Procedure) establishes that state control over compliance with labor legislation is carried out in the form of inspection visits and non-residential inspections by labor inspectors:

• The State Labor Service and its territorial bodies;
• Executive bodies of city councils of regional significance and rural, settlement, and city councils of united territorial communities (regarding the timely and full payment of wages, compliance with minimum wage guarantees, and the registration of labor relations).

The forms of labor inspector’s official ID, reports, certificates, orders, and the list of issues to be inspected are published on the official website www.drs.gov.ua. By the way, the Procedure provides that if there is no information about the forms of these documents on the official website of the State Labor Service, the enterprise may refuse to allow the inspector to conduct an inspection.

The procedure also establishes that inspection visits, among other things, are carried out based on information from:

• The State Statistics Service and its territorial bodies regarding the existence of wage arrears;
• The State Fiscal Service and its territorial bodies regarding:
  1. Discrepancies between the number of employees of the employer and the volume of production (provided works/services) based on average indicators of the corresponding types of economic activity;
  2. Facts of violations of labor legislation detected during the exercise of control powers;
  3. Facts of conducting business activities without state registration in accordance with the law;
  4. Employers with outstanding contributions to the Unified Social Contribution (ESC);
• The Pension Fund of Ukraine and its territorial bodies regarding:
  1. Employers paying wages below the minimum wage;
  2. Employers for whom there is no information about the employment of workers;
  3. Employers for whom, during the month, the number of employees working part-time has increased by 20% or more;
  4. Workers performing work (providing services) under civil law contracts with one employer for more than a year;
  5. Employers where there are no wage accruals for employees in the reporting month;
  6. Employers who have not raised wages during the year, or the amount of the raise is less than the amount of the accrued indexation;
  7. Employers where more than 30% of employees work under civil law contracts.

We have also highlighted several important points regarding the procedure for conducting inspections that you should pay attention to:

• Physical persons, regarding whom labor relations rules have been violated, may submit requests through an authorized representative.
• Labor inspectors notify the inspection subject or its authorized representative of their presence during the inspection visit, unless they believe such notice could harm the inspection process.
• If the inspector has an ID card, they have the right to independently and without obstruction, without prior notice, and at any time of the day, access any production, service, or administrative premises of the inspection subject where hired labor is used.
• The labor inspector’s request to provide the inspection subject with access to documents and/or their copies or excerpts, explanations, access to premises, or workplace organization, within their authority, is mandatory and must be complied with.
• The inspector may only be denied access to the inspection if they do not have an ID card or if the relevant information is not available on the official State Labor Service website regarding the forms of labor inspector ID cards, reports, certificates, instructions, and the list of matters subject to inspection.
• In the absence of documents required by labor legislation, the inspection subject will be sent a copy of the report on the impossibility of conducting the inspection visit and a written request specifying the deadline for document recovery. During this period, the inspection visit will be suspended.

Please note that this procedure has not yet been approved and remains a draft. However, it is believed that most of its provisions will be adopted.

The specialists at WinnerLex Law Firm will continue to monitor developments in the field of State Labor Service inspections and will keep you informed about the latest updates.

Please be advised that this publication is not legal advice and is provided for informational purposes. In case of specific issues related to this publication, it is recommended to seek full consultation with our specialists.

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