State Labor Inspections Are Returning: Employers to Be Fined for Wage Arrears

The Constitution of Ukraine guarantees the right to timely remuneration for work, and this right cannot be restricted even during times of military aggression. However, reality dictates different conditions. The government moratorium on business inspections, introduced by Cabinet Resolution No. 303, effectively created a zone beyond control where unscrupulous employers can accumulate debts to employees for months.

The State Labor Service of Ukraine is currently often forced to refuse inspections, citing a lack of legislative grounds during the war. Bill No. 15323 aims to restore the State Labor Service's right to control labor disputes.

New Grounds for Inspections

The draft law provides for targeted amendments to part three of Article 16 of the Law of Ukraine "On the Organization of Labor Relations under Martial Law." The list of grounds for unscheduled state supervision is expanded by two new points:

• A request from an individual (employee) regarding violations of labor payment legislation, including the presence of wage arrears.
• The occurrence of emergencies: accidents, death of a victim due to an accident or occupational disease related to the activities of the business entity.

This means that from now on, to initiate an inspection, a collective statement or a request from the military administration is not required — a request from a single affected employee is sufficient.

Inspection Procedure

Unscheduled measures will be carried out in accordance with the Law of Ukraine "On the Basic Principles of State Supervision (Control) in the Sphere of Economic Activity."

The bill maintains a clear list of grounds for inspections: they can be initiated upon requests from the Kyiv City Military Administration, regional military administrations, or in case of non-compliance by the employer with previous orders issued after May 1, 2022.

Violation Correction Instead of Fines

An important provision of the bill is the preservation of the mechanism for exemption from fines if violations are voluntarily corrected. If during an inspection the State Labor inspector detects violations, including wage arrears, they first issue an order to eliminate them.

If such an order is fully and timely fulfilled, fines provided for in Article 265 of the Labor Code of Ukraine will not be applied to the employer.

According to the fourth paragraph of part two of Article 265 of the Labor Code of Ukraine, for violations of established deadlines for wage payments to employees (or other payments provided by labor legislation) for more than one month, or for partial payment, financial liability of the employer is provided. A fine of 3 minimum wages is stipulated.

The main emphasis is not on collecting fines but on ensuring the actual repayment of debts to employees.

Combating Occupational Risks

A separate block of changes concerns investigations of fatal accidents and emergencies. Under martial law, when risks at enterprises have significantly increased, the lack of the possibility for prompt unscheduled inspections in case of an employee's death effectively created a legal gap.

The bill provides for the possibility of prompt response by supervisory authorities in such cases, including establishing a causal link between the enterprise's activities and the occurrence of an accident or employee death.

The initiative clearly separates the effect of the government moratorium on inspections and the legislatively enshrined rights of employees to remuneration.

The proposed model allows conscientious businesses to promptly correct violations without significant financial losses, while increasing the responsibility of employers who systematically ignore labor legislation requirements.

After the law comes into force (if adopted), an activation of unscheduled inspections is expected. Employers are advised to conduct an internal audit of wage arrears in advance, as inspections will be initiated promptly upon employee requests, and the only way to avoid fines will remain the prompt repayment of debts.

Subscribe to our Telegram channel t.me/sudua and to Google News SUD.UA, as well as to our VIBER and WhatsApp, pages on Facebook and Instagram to stay informed about the most important events.