Fighting undeclared work

Information campaign of Ukrainian labour inspectors brings 123,000 workers into formal employment in one month

Labour inspectors from the State Labour Service of Ukraine visited more than 184,000 employers in the trade, hotel and restaurant sector between 21 and 30 January, 2020, to inform them about the risks of undeclared work. The news about these visits spread very quickly and triggered the registration of 123,000 workers representing a 26% increase compared to the previous year

News | 25 March 2020

© AP/Puzzlepix

According to the State Statistics Office, one in every five Ukrainians works informally, and undeclared work (UDW) is even higher. The highest informality can be found in agriculture, trade, construction, transport, and gastronomy. Working off the books usually implies disadvantages: Workers’ rights, such as salaries or protection against unlawful dismissals are not ensured by law. Informal workers are not entitled to pensions, unemployment benefits, or work accident insurance. Unregistered enterprises often do not pay taxes and social contributionsthus posing unfair competition to other companies.

The Government of Ukraine places fighting informality and undeclared work high on its agenda. With ILO assistance, the State Labour Service (SLS) received support on how to tackle undeclared work. The ILO provided labour inspectors with training on inspection techniques and communication skills to better detect and deter UDW. The ILO is receiving financial support from the European Union for this work.

Another important contribution of the ILO was the update of the labour inspection statistics on undeclared work. The new statistical reports now properly reflect the number of newly formalized jobs. This also helps to monitor the effectiveness of labour inspection services. On basis of the trainings for labour inspectors and updated statistical systems, the ILO launched information and awareness-raising campaigns on undeclared work at the company level. The 690 labour inspectors of the SLS visited 184,000 employers altogether in January. The figures received from the tax office revealed that the campaign was effective. 123,000 new workers were only registered in the month of conducting the campaign. 

The Federation of Trade Unions of Ukraine and the Confederation of Free Trade Unions Ukraine joined the SLS trainings on tackling undeclared work.  Their participation was important, because trade unions play a significant role in informing workers about the risks of undeclared work. Trade unions distribute informative materials on UDW, give legal advice, or contact the SLS in cases of undeclared work.

”The labour inspectors’ visits aimed solely to communicate with the employers and their workers about the benefits of official employment and the risks related to undeclared work. No inspection reports were drawn up during these visits. We raised the awareness of employers, and it worked”, explained Ihor Dehnera, Head of SLS.