The purpose of any inspections conducted by regulatory authorities is to identify violations and, accordingly, to hold officials accountable and impose fines. In recent years, the State Labor Service (Держпраці), as a regulatory body, has significantly expanded its powers and increased fines for violations of labor legislation.
The State Labor Service has the right to conduct both scheduled and unscheduled inspections. Therefore, employers must always be prepared for visits from inspectors, clearly understand their rights and the inspector’s authority under Ukrainian law, and take measures to prevent any abuse by the regulatory body. Employers can learn about scheduled inspections of the State Labor Service:
- Through an official written notice, which must be sent to the company at least ten days before the scheduled inspection date.
- On the websites of the Regional Offices of the State Labor Service, where annual inspection plans are published.
Additionally, the State Labor Service may conduct unscheduled inspections without prior notice at any time of the day or night. However, it is essential to remember that any unscheduled inspection must have a justified legal basis, with an exhaustive list provided in Article 6 of the Law of Ukraine “On the Basic Principles of State Supervision (Control) in the Sphere of Economic Activity” https://zakon.rada.gov.ua/laws/show/877-16#n36 and in Clause 5 of the Procedure for State Control over Compliance with Labor Legislation, approved by the Resolution of the Cabinet of Ministers of Ukraine dated December 4, 2019, No. 1132 https://zakon.rada.gov.ua/laws/show/1132-2019-п#n2.
To avoid issues during a visit from the State Labor Service, employers should proactively assess potential risks and develop a detailed strategy to mitigate them, as well as counteract possible unlawful actions by inspectors.
The attorneys of WinnerLex Law Firm have extensive experience in labor law and employer protection during inspections. They promptly respond to labor law violations by inspectors of the State Labor Service, minimizing risks for both employers and employees.
The WinnerLex Law Firm team provides services for preparing businesses for inspections by the State Labor Service, including:
- Conducting a labor law audit;
- Providing staff training;
- Conducting briefings with the company’s security team on possible options for allowing or denying access to inspectors, verifying inspectors’ authority, etc.;
- Explaining employers’ rights and obligations during an inspection;
- Analyzing documents related to civil-law relations.
Practice experience: 19 years
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Practice experience: 11 years Specialization: tax, customs and corporate disputes, support of inspections, contractual activities
Practice experience: 6 years
Specialisation: business and civil law, tax and customs practice, corporate law, registration and reorganisation of business
Practice experience: 11 years Specialization: support of economic, civil, labor and administrative disputes, inspections
To ensure that a State Labor Service inspection does not lead to undesirable consequences, carefully manage the formalization of employment relationships with your employees and avoid any ambiguity in the proper registration of workers.
A State Labor Service inspector is not allowed to exceed the scope of the inspection. If an authorized official requests documents unrelated to the subject of the inspection, this should be recorded in the inspection report.
Before the inspection begins, employees should be briefed on how to interact with inspectors. If necessary, involve a lawyer or legal expert in the briefing to inform employees of their rights and obligations.
A business entity has the right to deny access to officials from the regulatory body if the State Labor Service is conducting a second unscheduled inspection on the same grounds as the previous one.
If inspectors from the State Labor Service discover undocumented employees at your company during an inspection, you will be required to pay a fine of up to 30 times the minimum wage for each employee who is not properly registered under labor law.
Some employers, for various reasons, do not formalize employment on the first working day and believe such actions are permissible. However, Article 265 of the Labor Code of Ukraine clearly states that employers bear responsibility for allowing employees to work without a properly executed employment contract.
Labor law requires employers to pay salaries twice a month, ensuring that the period between payments does not exceed 16 days.
If an employer delays salary payments or fails to pay the full amount, this constitutes a violation of labor law. The penalty for such a violation is a fine of three times the minimum wage (as established at the time of the violation) for each affected employee.
If an inspection has been conducted at your enterprise by the State Labor Service, an inspection report has been drawn up, but you do not agree with it, it is better to state in writing in the report the reasons why you disagree with the inspection findings. Alternatively, within three working days from the date the inspection report was signed, you may submit comments on the report, to which the inspector must provide a reasoned response within three days from the date of receipt of such comments.
If the inspected entity or its authorized representative refuses to sign the report or if it is impossible to personally deliver the report and/or order, the report and order shall be drawn up in three copies simultaneously. If the inspected entity refuses to sign the report, the labor inspector shall record this fact in the report.
Two copies of the report and order shall be sent no later than the next working day to the inspected entity at the address indicated in the Unified State Register of Legal Entities, Individual Entrepreneurs, and Public Formations by registered mail with a list of enclosed documents and delivery confirmation. The inspector’s copy of the report and order shall include the postal notification details, which are attached to the inspection visit materials.
The inspected entity is required to return a signed copy of the report and order to the labor inspector either in person or by postal mail with a list of enclosed documents no later than three working days from the date of receipt.
If the signed copy of the report and order is not received within seven working days from the date of dispatch, an act of refusal to sign is drawn up in two copies, one of which is sent to the inspected entity by registered mail with delivery confirmation.
