July 2013

Procedure to Impose Fines for Violation of Legislation on Employment Has Become Effective

On 10 August 2013, the Procedure for Imposing Fines for Violation of Legislation on Employment (the "Procedure") approved by resolution of the Cabinet of Ministers dated 17 July 2013 No. 509 became effective.

The Procedure determines the mechanism for imposing fines under the Law "On Employment of Population" on business entities and employers (the "business entities"). Such fines include, inter alia, financial penalties for: failure to comply with quota for employment of persons with additional benefits in employment, as provided under the Ukrainian law; hiring foreign citizens without a work permit; failure to submit information on mass lay-offs or staff reduction; recruiting employees who further perform work in Ukraine for other employers without a relevant permit, as well as certain other fines.

Alleged violation of the legislation on employment identified by an official of the State Labour Inspectorate of Ukraine (the "Inspectorate") in the course of an audit may serve as a ground for imposing a fine. Such a violation must be recorded in a respective audit report. Subsequently, the case on imposing a fine (the "case") is considered according to the following procedure:

  • the authorized officer of the Inspectorate resolves whether to commence consideration of the case within 10 days after the respective audit report was issued;
  • the authorized officer of the Inspectorate considers the case within 15 days after the above-referred resolution. This term may be extended up to 10 extra days based on application of a business entity;
  • the Inspectorate informs the business entity of a planned consideration of the case not later than 5 days in advance;
  • as a result of consideration of the case, the authorized officer of the Inspectorate issues a respective resolution. Notably, the Inspectorate must within 3 days send or deliver by hand the resolution on imposing the fine to a business entity.

Under the Procedure, the case must be considered in presence of a representative of a business entity, in respect of which the case was commenced. An exception to this rule is when the business entity has been informed of the case consideration of and has not applied for postponement.

The business entity must pay a fine within one month after the respective resolution was issued and inform the Inspectorate or its local department on the payment.

The Procedure allows the business entity to appeal the resolution on imposing a fine at court. In their turn, local offices of the Inspectorate or the State Employment Centre (as the case may be) apply to court for enforcement of fines that remain unpaid after expiry of the said one-month period.

For further information please contact
counsel Svitlana Chepurna and associate Inesa Letych

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