Labor Law Compliance Checks: Beware or Prepare?

30/ 06/ 2017

Author: Serhiy Silchenko, ILF partner, Head of Labor and Tax Legal Practice, Head of Labor Law Committee of the Ukrainian Bar Association, PhD in Law

After a long moratorium on inspections, employers are facing hard times. Attempts to bring a significant part of the labor market out of the shadow, the fight against informal labor relations, and the desire to legalize employee incomes – those are but some of the reasons for changing rules of labor inspections.

On May 16, 2017 the Decree of the Cabinet of Ministers of Ukraine dated April 26, 2017 No. 295 came into force, approving the Procedure for the implementation of state supervision over compliance with labor law. This document changed the procedure for conducting inspections. Now labor inspectors require only their official identification to be able to visit employers at any time, get access to production facilities, and talk to employees. In addition to the officials of the State Labor Service of Ukraine, the authority to check the compliance with labor law has also been given to executive bodies of local councils.

Naturally, business isn’t happy about these changes, especially in light of massive fines for violating labor laws.

All those using hired labor should understand that the best way to avoid fines is to stick to the provisions of labor legislation. However, anybody can make an error, employers as well as inspectors. Therefore, a clear understanding of how to properly talk to inspectors, knowledge of one’s rights and responsibilities, compliance with the inspection procedure may reduce the employer’s risk of being held liable.

Under the new procedure, the employer may avoid a fine if he complies with the labor inspector’s order to eliminate violations of current legislation. If the employer does not agree with the decision to impose a fine, he has the right to appeal it in court.

When it comes to liability, it is better to learn from the mistakes of others. Since the fines for violating labor laws have been in place since March 2015, over the past two years ample legal practice on employers’ appeals against the fines of the State Labor Service was compiled. Being aware of the proper legal positions formed during the examination of relevant disputes will be useful to those forced to defend their rights in court.

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