Cancellation of licenses for mediation in employment abroad and introduction of declarations

We inform you about the adoption by the Verkhovna Rada of the draft Law on the Protection of Migrant Workers and the Fight against Fraud in Employment Abroad (hereinafter referred to as the Law), which cancels the requirement for a license to mediate employment abroad and introduces instead the Declaration on Conducting Economic Activities in the Field of mediation in employment abroad. The bill is currently sent to the President for signature.

GROUNDS FOR THE ADOPTION OF THE LAW

According to the authors of the Law, the license for mediation in employment abroad does not work properly and does not protect Ukrainian workers. An example is the issuance of 1.7 million job invitations to Ukrainian citizens in Poland in 2017, while only 12,400 citizens left to work through licensed companies.

The authors of the Law believe that the cancellation of licenses, the introduction of so-called “notifiable licenses” in the form of declarations and a significant increase in fines for violations of the law in the field of employment mediation will significantly reduce cases of fraud, when unscrupulous businessmen make money by taking money in advance for vacancies from applicants, without providing services.

Legislators separately emphasize the prohibition of collecting from citizens any fees, commissions, rewards, other types of payment for employment mediation services in Ukraine or abroad, which is implemented by the Law. Although such a ban was already implemented last year by Law of Ukraine No. 2623-IX “On Amendments to Certain Laws of Ukraine Regarding Employment of Foreigners and Stateless Persons in Ukraine and Provision of Mediation Services in Employment Abroad”, which we have already reported.

All this should, according to the authors of the Law, lead to the gradual legalization of the international employment market and transparent business operations.

PERIOD OF ENTRY INTO FORCE OF THE LAW

Please note that the Law enters into force only 6 months after its publication. Given that the Law is currently sent to the President for his signature, if it is signed by the President, the Law will enter into force no earlier than the beginning of October 2023.

At the same time, those companies that received a license for mediation in employment abroad before the entry into force of the Law may continue to operate under the license for another 6 months from the date of entry into force of the Law. Roughly – until the beginning of April 2024. After this period expires, licenses become invalid.

Thus, companies that have a license to mediate employment abroad and wish to continue their activities must, in the period from October 2023 to April 2024, submit a declaration on the conduct of economic activity in the field of mediation in employment abroad and be included in the List of sub business entities that provide mediation services in employment abroad (hereinafter – the List).

The specified List is formed and maintained by the Ministry of Economy of Ukraine. It is foreseen that the procedure for maintaining the List will be determined by the Cabinet of Ministers of Ukraine within 6 months from the day of the official publication of the Law.

MAIN CHANGES

The law provides for inclusion in the List within 10 working days from the date of submission of the declaration on conducting economic activity in the field of mediation in employment abroad, unless a justified refusal to be included in such a list is given.

Information about the registration of the business entity, its manager, address and the concluded foreign economic agreement (contract) is indicated directly in the declaration itself.

At the same time, the Law provides that in order to submit a declaration, it is necessary:

to be registered in accordance with the procedure established by the law for the type of economic activity of mediation in employment;
have a foreign economic agreement (contract) concluded with a foreign employer on the provision of mediation services in employment, search and selection of employees;
have registration documents of a foreign business entity – employer in the country of location.

The declarant is obliged to provide the citizen with the following for signature before departure for employment abroad:

information in written form about the rights and guarantees provided to him under the employment contract (contract), provided for by the legislation of Ukraine and the legislation of the state of the employer’s location;
contact details of consular institutions of Ukraine in the host country;
a draft employment contract (contract), certified by a foreign employer.

At the same time, when providing intermediary services to sailors and fishermen, the declarant is additionally obliged to check:

qualification necessary for the performance of works declared by the shipowner;
documents confirming qualification.

We remind you that according to the current License Terms, you need to check only the documents confirming the qualification.

In addition, it is mandatory to obtain from an employee working abroad, consent to receive information about his state of health and only in cases where receiving such information is directly related to the requirements for a specific profession, type of activity.

REPORTING AND INSPECTIONS

The law stipulates that declarants are obliged to submit to the Ministry of Economy of Ukraine a report on the implementation of activities for the provision of mediation services in employment abroad.

Failure to submit such reporting within 3 reporting periods is grounds for excluding the declarant from the List.

It is provided that the procedure, form and terms of submission of such reporting are approved by the Cabinet of Ministers of Ukraine.

Currently, the Cabinet of Ministers has not yet implemented such an order.

The law provides that checks in the form of an inspection visit of the State Labor Service of Ukraine (State Labor) may be conducted based on the results of the analysis of information received from the media and other sources. At the same time, the impossibility of conducting an audit for six months (the reasons for the impossibility of an audit are not defined by the Law) leads to the exclusion of the declarant from the List.

RESPONSIBILITY

A fine of twenty times the minimum wage established at the time of detection of the violation is introduced for conducting the activity of providing mediation services in employment abroad without being included in the list of business entities providing mediation services in employment abroad. Today it is UAH 134, 000.This fine will be imposed on legal entities and private entrepreneurs in accordance with Part 3 of Art. 53 of the Law on Employment.

The law also introduces a new Article 166²⁸ to the Code of Ukraine on Administrative Offenses, which introduces liability for mediation activities in employment abroad without inclusion in the list of business entities in the form of a fine of 119,000 to 136,000 UAH for officials.

Repeated violation within a year involves the imposition of a fine from UAH 136,000 to UAH 170,000.

Collection from citizens of any fees, commissions, rewards, other types of payment for mediation services in employment in Ukraine or abroad – according to the Law, entails the imposition of a fine on officials of 59,500 to 68,000 UAH. These fines will be imposed on company officials in the order of administrative liability. Fixation of offenses by drawing up protocols will be carried out by inspectors of the State Labor Service and its territorial subdivisions, and district (city-district) and city courts will decide on the imposition of administrative fines.

CONCLUSIONS

To date, the requirements of the Law already allow for a much-simplified process of obtaining a permit for employment mediation activities abroad – by submitting a declaration.

Currently, it is already clear that although the documents are not submitted to the declaration authority, they must be available to the declarant during the inspection. At the same time, the grounds for inspections have been expanded.

That is, the process of checking the business entity for compliance with the legislation on mediation in employment abroad has been moved from the time of obtaining the permit document to the time of conducting the business entity inspection, which requires more careful preparation for the inspections.

At the same time, to date, taking into account the absence of a corresponding subordinate legal act of the Cabinet of Ministers of Ukraine, which should provide for the procedure for maintaining a list, submitting reports, keeping records and submitting a declaration, it is still impossible to definitively determine how much has changed the list of documents that must be kept in declarant.