Have you not concluded employment contract with employee? Be prepared to pay a fine!

Press service of the State Tax Service of Ukraine, published 21 December 2023 at 15:09 Chapter: News

State Tax Service of Ukraine reminds taxpayers that one of its activity areas is monitoring of employers' compliance with legislation on the conclusion of employment contracts and registration of labor relations with employees (hired persons).

Employment contract is a document that regulates relationship between employee and employer. It defines rights and obligations of both parties, working conditions, salaries, validity term, procedure for change and termination.

Article 24 of Code of Labor Laws of Ukraine (as amended) stipulates that employee may not be allowed to work without concluding employment contract compiled by order or decree of the employer, and notification of the central executive authority on matters of ensuring formation and implementation of state policy on the administration of single contribution to obligatory state social insurance on hiring employee according to procedure established by the Cabinet of Ministers of Ukraine.

Liability of legal entities and individuals-entrepreneurs who use hired labor is provided for in Part 2 of Article 265 of the Code of Labor Laws of Ukraine.

Therefore, the fact of non-registration of labor relations with employees (hired persons), discovered by the State Tax Service’s body during the actual audit, is a sufficient reason for imposing on the business entity a fine specified in Part 2 of Article 265 of the Code of Labor Laws of Ukraine.

According to the consideration results of the actual audit materials by the State Labor Service in 2023, fines for a total amount of 23.8 million UAH were applied and 406 warnings were issued to the taxpayers.

Formalization of labor relations by employers with employees is provision of social guarantees for citizens and revenues to the budget.