Minimum wage is a state social guarantee, which is mandatory throughout Ukraine for enterprises of all forms of ownership, management and individuals who use the labor of employees, under any payroll system. Acting Head of Main Directorate of the STS in Rivne region Vitalii Chui reported that the number of enterprises – “minimizers” that paid less than the statutory minimum wage (4 723 UAH) is 3688 entities, including legal entities – 1443.
Average wage in Rivne region is 7.6 thousand UAH according to the submitted single social contribution report for January 2020. However, according to the monitoring of job search sites, employers offer wages to employees at times higher than the specified in tax reporting. That is, business entities conceal employees’ actual income in order to minimize the tax liabilities.
Therefore, employers of Rivne region who allow incomplete remuneration of their hired employees receive a note with recommendations from the Tax service to prevent violations of the tax legislation in terms of the payroll.
It should be noted that a significant number of business leaders and entrepreneurs voluntarily legalized employees after conducted explanatory-preventive work. There were 10326 notifications on the hiring of 13213 employees to the tax service in January-February 2020. However, 420 entities decided to cheat and immediately after the “registration” of employees, without paying their official earnings, canceled previously submitted notifications about 767 individuals.
Tax specialists appeal to employers who have the risk of non-payment of taxes and fees in terms of paying income to citizens, who incur significant penalties.
Tax officials conducted 62 audits of such entities in 2020. As a result, 53 individuals were detected to be working without proper employment registration. Audit materials were sent to the State Department of the State Labor Service for appropriate measures.
For example, during an unscheduled audit of two catering contractors, 39 informal employees were detected in 5 establishments.
Tax specialists note that joint work of supervisory authorities on the legalization of hired labor has already been intensified, so that employers of Rivne region, who do not comply with the legislative requirements, should take care of the official employment of their employees.