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How is the business inspection of State Labor Service authorities carried out?

In recent years in business environment of Ukraine there is a tendency for decreasing of bureaucratic and formal procedures that must be followed during the registration and doing business.

But at the same time, the activities of state agencies to inspect business entities in order to monitor their compliance with the law still continue to be more regulated and consistent in the context of the interpretation and implementation of the current legislation.

Today we will continue our discussion on passing inspections of various regulatory agencies and talk about inspections by the State Labor Service of Ukraine.

This material will cover the following information:

  • What can be the reasons for conducting monitoring activities?
  • What rights do the officials the State Labor Service of Ukraine when conducting an audit?
  • What are the consequences of the implementation of the control measures of the State Labor Service of Ukraine for business?

Read other materials on the topic: SFS (State Fiscal Service) business inspections: when and on what issues are they carried out and what should you do.

 Legislative regulation of inspections of the State Labor Service of Ukraine

An interesting fact is that not so long ago, the main regulatory act that regulated the procedure for conducting inspections of the State Labor Service of Ukrainу was canceled by a court decision, and for some time the State Labor Service of Ukrainу did not have the right to conduct inspection audits.

However, this problem was quite quickly resolved through the adoption of the Resolution of the Cabinet of Ministers of Ukraine as of August 21, 2019 No. 823.

This Resolution approves two procedures at once, but today we are interested in the procedure for monitoring compliance with labor laws, since it determines the procedure for controlling measures.

According to this procedure, control measures are carried out in the form of:

 A) inspection visits;

 B) remote audits.

Grounds for the right to conduct inspection visits

The following groups of grounds can be distinguished:

  • appeal of the person in relation to whom the norms of labor legislation were instituted;
  • the decision of the head of the regulatory agency on conducting inspection visits on off-the-books labor relations (this decision is made on the basis of analysis of information, access to which is not limited by law), etc.

Inspection visit can last no more than 10 working days.

The rights of officials during an inspection visit

  • Visit any industrial, office or administrative premises in which hired labor is used at any time (subject to labor protection legislation) if a study is being conducted to identify unreported workers;
  • To get acquainted with any documents that should be available at the enterprise, containing information on issues that are subject to verification;
  • To pose questions to persons, privately or in the presence of witnesses who have the necessary information regarding labor legislation and receive explanations on such issues;
  • Conduct a confidential conversation with employees in an equipped workplace;
  • Seek help from law enforcement officials if there are signs of a criminal offense or a threat to the safety of a labor inspector;
  • other rights provided by the Resolution.

 Consequences that may result from an inspection visit

The result of an audit is issued in the form of an inspection visit / off-site inspection certificate. If violations have been identified, an improvement notice is issued to eliminate them.

This improvement notice makes it possible to avoid liability measures by fulfilling the requirements of the requirement.Of course, if the requirements of the improvement notice are not met before the repeated inspection, the State Labor Service of Ukraine will be able to apply sanctions to the business entity.

So, today, admission of an employee without formalizing an employment contract may incur liability to a fine of 30 minimum wages (UAH 125190.00).

However, if a business entity uses the labor of unreported employees, prosecution occurs simultaneously with the execution of the order to eliminate this violation.

Our service: Appeal against unlawful actions (inaction) and decisions of regulatory and law enforcement agencies

What is needed to pass the inspection successfully?

In order to successfully pass the inspection of the agencies of the State Labor Service of Ukraine it is necessary, at the very least, to make sure that absolutely all employees are properly reported. To do this, you must:

  • issue an order for appointment;
  • submit a notice to the tax office on employment;
  • make an appropriate entry in the work-record book of each employee.

Of course, this does not guarantee that other violations of the law, if any, will not be discovered at an enterprise. However, if they are discovered, it will be possible to fulfill the improvement notice to eliminate the violation and to avoid measures of bringing to justice. And the above steps will at least ensure that you will not be held liable immediately.

A clear answer on the implementation of the provisions of the new resolution can only be given by the practice of its application and judicial practice on controversial issues that, as experience shows, will arise in any case.

If you want to learn more about the special aspects of this issue, or to secure the help of qualified lawyers during the audit, you can contact our company in any way convenient for you.

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