What fine does an employer in Ukraine face for a foreigner working without a work permit?

Two separate sanctions for one violation

An employer who engages a foreigner without a work permit risks two independent fines. The first is set by part five of Article 53 of the Law "On Employment of the Population". It is a financial sanction on the employer itself of 20 minimum monthly wages per person, with the minimum wage taken as at the time the violation is detected.

Part three of Article 41 of the КУпАП (Code of Ukraine on Administrative Offences) provides for the second. It is imposed on company officials and on a ФОП (registered sole proprietor, FOP) using hired labour for letting a foreigner work without a permit, and the fine is 500 to 1,000 tax-free minimum incomes. A repeat violation within a year is punished more severely under part four of the same article, with a fine of 1,000 to 2,000 tax-free minimum incomes.

These sanctions do not replace each other. For one worker without a permit, the company may face a financial sanction and its director, personally, an administrative fine.

Work on other terms

A permit is issued for a specific position with a specific employer. The law separately penalises the case where a permit exists but the foreigner works on terms other than those set in it, or for another employer. This sanction is smaller than the one for working with no permit at all and amounts to 10 minimum monthly wages per person.

The more important consequence lies elsewhere. Work on other terms is a ground for revoking the permit under Article 42-10, and after such a revocation a new permit for that person is blocked for one year. Lawful secondary employment, with each employer holding its own permit, and combining positions within 60 calendar days a year do not fall under this ground.

If the position has changed, apply for amendments to the permit. Where the employer has changed, a new permit is needed together with the procedure for moving to a new employer.

Typical situations that lead to a fine

In our practice a fine rarely results from a deliberate violation. Much more often, one of these situations arises:

• the foreigner started work on the day the documents were filed, while there was still no permit;
• the permit expired, and the renewal application was filed late or not at all;
• the employee was moved to another position without amending the permit;
• a foreigner hired by one company in a group is in fact working for another;
• a new employer let the person start work before receiving its own permit.

An expired permit

An expired permit deserves a separate word. From the day after the "Дійсний до" (valid until) date, the foreigner's work counts as work without a permit, even if the employer has already filed the documents. For the duration of the gap the employee is kept away from work. How to avoid ending up in this situation is explained in the article on renewing a work permit.

Who checks

State control over the employment of foreigners follows the procedure set for inspections of undeclared employment. The центр зайнятості (employment centre) passes information on issued, renewed and revoked permits to Держпраці (State Labour Service), the ДМС (State Migration Service, DMS) and the border guard service. A mismatch between the permit and the actual work therefore shows up in the data these authorities exchange, not only during an on-site inspection. Counting on nobody noticing is unwise.

Consequences for the foreigner

Financial liability for work without a permit lies with the employer. Yet the foreigner loses as well. If the permit is revoked, the basis for a work-based посвідка (temporary residence permit, TRP) disappears, and the DMS may revoke the card. Getting back into legal status after that is harder than simply waiting for the permit.

If the violation has already happened

If you discover that a foreigner is working without a permit or in the wrong position, act in this order.

Once a fine has been imposed, it must be paid on time or appealed in the established manner. Neither should be put off. An unpaid fine passes into enforcement proceedings, and at that point it hits the foreigner, because a debt listed in the register of debtors is a ground for refusing a TRP.

1. 1Keep the employee away from work until the situation is fixed.
2. 2File documents for a permit, a renewal or amendments, depending on what is missing.
3. 3Record every step in writing, because the dates of orders and applications later show that you ended the violation yourselves.

Lawyer's experience

I always explain the economics of the risk to employers. The fine for one worker without a permit is many times the cost of obtaining the permit itself, and that is before the administrative fine for the director. Waiting a few days for the employment centre's decision is always cheaper.

The most dangerous moment in my practice comes not at the start but a year later, when the permit expires. We set reminders well before the renewal window opens and separately warn the employer about the "Дійсний до" date. If the renewal is running late, the employee is kept away from work for a few days, and that costs far less than a fine. Sole proprietors who hire foreigners follow the same rules, as explained in the article on a work permit for a sole-proprietor employer.

To make a foreigner's work lawful from the first day, start obtaining the work permit before the planned start date.

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