New Rules For Intermediary Services In Employment Abroad

The Law will come into force on October 14, 2023. The clause, which obliges the Cabinet of Ministers of Ukraine to bring its normative legal acts into compliance with this Law within a 6-month period and to ensure that ministries and other central executive bodies bring their normative legal acts into compliance with this Law, takes effect from the date of the Law`s publication.

The Law stipulates elimination of the licensing for intermediary services in employment abroad and introduce a “declaration principle”. Intermediary services in employment abroad can be provided only after inclusion in the List of entities that provide intermediary services in employment abroad (hereinafter – the List), and within the framework of concluded foreign trade agreements.

The licensing regulation that are in force now will be abolished, and the procedure for submitting a declaration should be adopted in its place.

The entities that were licensed to provide intermediary services in employment abroad before the entry into force of this Law, based on the Declaration submitted within 6 months, will be included in the List.

The licenses formediation in employment abroad issued to the entities before the entry into force of this Law, expire in 6 months from the date of entry into force of this Law.

Thus, the Declaration for inclusion in the List should be submitted within 6 months from October 14, 2023, i.e., until April 14, 2024.

The List will be maintained by the Ministry of Economy of Ukraine, and it will beopen and accessible on the Ministry's website.

The inclusion in this List will be based on the submitted Declaration on conducting economic activities in the field of mediation in employment abroad (hereinafter – the Declaration) in accordance with the procedure established by the Cabinet of Ministers of Ukraine.

COMMENSMENT OF THE ACTIVITIES

To commence the activities of providing intermediary services in employment abroad and to be included in the List, such an entity should:

1) be registered in accordance with the procedure established by law for the type of economic activity of mediation in employment;

2) have concluded foreign trade agreement (contract) on the provision of intermediary services in employment, search and selection of employees (hereinafter – foreign trade agreement (contract)) with the foreign employer and registration documents of the foreign entity – employer in the State of residence – the Law doesn`t specify the form and list of such documents, the details will probably be introduced in additional regulations.

3) have registered place of economic activity;

4) submit a Declaration on conducting economic activities in the field of mediation in employment abroad.

The foreign trade agreement (contract) may be concluded in Ukrainian and in one or more languages used in the employer`s State of residence. After the expiration of the validity period, the foreign trade agreement (contract) should be kept for 3 years.

OBLIGATIONS OF ENTITIES PROVIDING INTERMEDIARY SERVICES IN EMPLOYMENT ABROAD

Started from October 14, 2023, the entities providing intermediary services in employment abroad will undertake the following obligations:

1) to provide a citizen before departure for employment abroad:

- information in written form on the rights and guarantees granted to him/her under the employment agreement (contract), provided for by the legislation of Ukraine and the legislation of the employer`s State of residence;

- contact details of the consular institutions of Ukraine in the host State – for the seafarers the host State is the flag State;

- draft of the employment agreement (contract) verified by the foreign employer.

A citizen must confirm receipt of information and a draft employment agreement (contract) with a conventional or electronic digital signature. The specified documents should be kept for 5 years (currently 3 years);

2) to keep records of citizens who are employed abroad through the entity – the Law doesn`t provide for the form of record keeping. It is obvious that the record will be in writing, and whether the form of the Logbook of seafarers will remain or whether there will be a new form will probably be determined by the Cabinet of Ministers;

3) to provide free of charge information and consultations to citizens about the benefits of legal employment abroad, the nature of future work, conditions and amount of wages, conditions of residence in the host State, availability of international contracts (agreements) in the field of employment and social security concluded between Ukraine and the employers` State of residence;

4) to submit reports on the implementation of intermediary services in employment abroad. The report submission procedure, form, and terms are approved by the Cabinet of Ministries of Ukraine – this obligation exists now and most likely the reporting will remain unchanged;

5) to inform the Ministry of Economy of Ukraine about the changes in the information provided in the List within 1 month from the date of such change – this provision exists now as well;

6) in the case of concluding new one or several foreign trade agreements (contracts), the information about them and the registration documents of such foreign entities – employers in the State of residence should be sent to the Ministry of Economy of Ukraine within 1 month from such a conclusion;

7) to ensure unimpeded access to the registered place of economic activities of the provision of intermediary services in employment abroad for the representatives of the State Labour Service of Ukraine for exercising state control.

An entity that provides intermediary services in employment of seafarers, fishermen on vessels sailing under the State Flag of Ukraine or the flag of a foreign State, is obliged to additionally check the availability of the qualifications necessary for performance of work declared by the shipowners of seafarers and fishermen who are employed through its mediation, and documents confirming such qualifications.

PROHIBITION

The entities that provide intermediary services in employment, are prohibited from:

1) requesting, storing or using information about a citizen's state of health or use such information to determine his/her suitability for work, if the specified information is not directly related to the requirements for a specific profession, type of activity and if the written consent of the citizen has not been obtained;

2) charging citizens any fees, commissions, rewards, other types of payment for intermediary services in employment, directly or indirectly, in whole or in part. The intermediary services in employment should be paid exclusively by the employer to whom such services are provided;

3) offering citizens work that has characteristics of informal employment, as well as work thathides the true purpose and subject of work, orengaging in work that is not defined by an employment agreement (contract).

INSPECTIONS

The state control over the activities of the employment intermediary companies is conducted by the State Labour Service of Ukraine in a form of inspection visits. The basis of such inspections may be, in particular, information obtained from the media, other sources, access to which is not limited by law, or from the Ministry of Economy of Ukraine, as well as on other grounds determined by law.

INCLUSION AND EXCLUSION FROM THE LIST

The Declaration for the inclusion in the List may be submitted in paper or electronic form. The form of Declaration and the procedure of its submission is determined by the Cabinet of Ministries of Ukraine.

The Declaration should contain the following information:

1) State registration in accordance with the procedure established by law;

2) address of the place of economic activities;

3) head of the entity (passport details, identification code);

4) concluded foreign trade agreement (contract) and the registration documents of foreign entities – employers in the State of residence.

It is prohibited to request documents not provided for by this Law.

The inclusion in the List should be done within 10 working days from the date of submission of the Declaration unless a reasoned refusal is given.

The basis for the refusal in inclusion in the List is the submission of incomplete or inaccurate information in the Declaration.

The exclusion from the List is done based on the decision of the Ministry of Economy of Ukraine in accordance with the procedure established by the Cabinet of Ministries of Ukraine.

The bases for the exclusion from the List are:

1) application for exclusion from the List;

2) availability in the Unified State register of legal entities, individual entrepreneurs, and public organisations information on the state registration of the termination of a legal entity or the state registration of the termination of the economic activity of an individual entrepreneur;

3) submission of a copy of the death certificate of an individual entrepreneur;

4) non-submission or violation of reporting deadlines for 3 consecutive reporting periods;

5) an act of the State Labour Service of Ukraine drawn up as a result of a state control in connection with non-fulfilment of requirements for the elimination of violations – i.e., first, as a result of an inspection, the State Labour Service establishes violations and demands their elimination, and only after these violations have not been eliminated, an act can be drawn up , on the basis of which the Ministry of Economy of Ukraine will be able to exclude an entity from the List;

6) establishing the fact of providing intermediary services in employment abroad without a concluded foreign economic agreement (contract);

7) impossibility of conducting an inspection by the State Labour Office of Ukraine at the place of economic activities specified in the List within 6 months from the date specified in the decision on conducting an inspection;

8) establishing the status of a person who has suffered from human trafficking as a result of employment with the assistance of an entity that provides intermediary services in employment abroad.

FINE SANCTIONS

According to the amendments to the Law of Ukraine “On employment”, in the case of an entity provides intermediary services in employment abroad without being included in the List, it will be fined in the amount of 20 times the minimum wage established at the time of discovery of the violation (134,000 UAH).

Moreover, an administrative liability under the Code of Ukraine on administrative offenses is established:

• carrying out activities without inclusion in the List – fine from 7,000 to 8,000 tax-free minimum incomes (119,000 UAH – 136,000 UAH), in case of re-detection of a violation – fine from 8,000to 10,000 tax-free minimum incomes (136,000 UAH – 170,000 UAH)
• charging citizens any types of payment for intermediary services in employment in Ukraine or abroad is fined from 3,500 to 4,000 tax-free minimum incomes (59,500 UAH – 68,000 UAH).