License for mediation in employment abroad

The departure of Ukrainians abroad for permanent residence or for work continues to “disturb” the authorities or at least makes them talk about their concerns. Labor emigration is one of the main reasons for raising the minimum wage level.

The government tries to attract foreign investments, which promotes the emergence of more solvent employers, in order to stop the outflow of skilled personnel. By imposing huge fines, the government seeks to withdraw employment from the shadow and protect the rights of employees who can not do it on their own.

Despite this, working abroad attracts many Ukrainians, and mediation in employment – is a popular type of business. It is relatively easy to start this business, and it can be implemented both by legal entities and individual entrepreneurs. It is only necessary to remember the legislative requirements for obtaining a mediation license and find a reliable partner – an employer or an intermediary abroad.


A bit of statistics

According to the State Statistics Service, in 2017, 83.8 thousand Ukrainians were officially employed through licensed intermediaries abroad. In 2018, this number increased to 97.1 thousand people, that is, almost 20%.

However, official numbers relate exclusively to legally employed Ukrainians through licensed companies. On the other hand, unofficial statistics indicate that 4 or even 5 million Ukrainians are “earning” abroad.

The most popular countries are Poland, Russia, Hungary, Czech Republic and Germany. Employment mediation licenses in these countries are currently in greatest demand, including among our clients.

Not least the popularity of some European countries, in particular, the Czech Republic and Germany, is facilitated by the procedures for the foreigners’ employment. There is a kind of competition between European countries for the possibility of attracting foreign employees.


Do you really need a license?

The practice of so-called “mediation” in Ukraine is often based on an information services contract, according to which the company only provides information about vacancies existing in a particular country. Such “intermediaries” do not actually have “obligations” to employees, do not provide any guarantees for employment, do not report on the number of employed people, and their activities are not controlled by the Ministry of Social Policy.

No one should trust such “intermediaries”. According to the International Labor Organization, as of May 2018, about 21 million people in the world were involved in forced labor. In order not to be trafficked, potential migrant employees should be careful and check the mediator’s license.

The relative complexity of the procedure for obtaining a license is an attempt to maximally protect the rights of potential Ukrainian employees and prevent foreign employers from abusing them.

However, the legal requirements for obtaining a license are ignored by many companies. Partial deregulation in the field of doing business, the abolition of criminal liability for violation of the order of economic activity allowed entrepreneurs to partially relax. Although it is not possible to call such an attitude to the law to be justified.


Why not work without a license?

The legislation establishes two types of liability in the case of mediation without a license.

Administrative liability is stipulated by Article 164 of the Code of Ukraine on Administrative Offenses and establishes a fine from 17 thousand UAH to 34 thousand UAH with the confiscation of the funds received (or without confiscation).

Art. 53 of the Law “On Employment” establishes financial liability – a fine of 20 minimum wages (in 2019 – 83 460 UAH).

The specified fines can be applied simultaneously: administrative – to the head of a legal entity, financial – to the company, which carried out mediation without a license.

In addition to fear of being punished, potential intermediaries planning to operate without a license should also be aware of the distrust of the potential migrant employee. The risk of getting into labor slavery is rather large and prompts a thorough approach to the choice of mediator.

With qualitative legal support, the procedure for obtaining a license for a mediator is significantly simplified and not too complicated, as it may seem at first glance. Therefore, it is better to get a license, operate within the law and not be afraid of losing business after the first inspection.


What do you need to obtain a license?

In general, for obtaining a license, you need to apply the Ministry of social policy with a package of documents, which depends on the scheme of employment.

In fact, all documents can be divided into three categories.

Firstly, documents from the Ukrainian company: an application on obtaining a license, information about the material and technical base of the company, a certificate on the lack of control by the aggressors and a description of the documents.

Secondly, documents from a foreign employer: a document on the registration of the company, its address, activities, and CEO, the draft employment contract, information on contracts with the trade unions or their absence.

Thirdly, the document on cooperation between the Ukrainian company and the foreign, involving employees (foreign economic contract).

If the cooperation is carried out directly with a foreign employer, the above documents will be sufficient.

If the procedure involves another entity – a foreign intermediary, an additional agreement is required between such an intermediary and the final employer. Foreign economic contract, in this case, is concluded with the company-mediator, and not with the final employer.

The foreign economic contract is made in two languages, one of which is Ukrainian, the other is English or language of the country of employment.

The draft labor contract is also made in two languages, signed by a potential employer, and its content is to meet the minimum guarantees for employees as defined by Ukrainian legislation and the laws of the country of employment.

All “foreign” documents must be legalized, translated into Ukrainian, and translations must be certified by a notary public. The way of legalization is determined depending on the country of employment: some countries need an apostille, with others Ukraine has agreements on mutual recognition of documents.


Mandatory lawyer and office to obtain a license

The intermediary, according to the licensing requirements, must have an employee with legal education. This license requirement can also be met by concluding an outsourcing agreement with a law firm, which is significantly cheaper.

To obtain a license, you need a premise (office) in the property or rent. Information about the address and the grounds of use (documents on the right of ownership, the lease agreement, etc.) are indicated during the submission of the package of documents.


Examination of documents and validity of the license. Is it easy to lose it?

The term of consideration of documents – 10 working days of receipt. Since the expiration of this term, a decision is made to grant or refuse to issue a license.

The fee for a license in 2019 is UAH 1921 and is paid within 10 working days after the announcement of the decision on its issue. Thus, in case of refusal – the money is not paid. But in case of non-payment – the license is canceled.

The license is issued for an unlimited period.

After obtaining a license, it is important to observe the conditions for conducting mediation activities in employment abroad. The Licensor periodically checks the state of compliance of the intermediary companies with the license terms. The non-removal found during the verification of violations is the reason for license cancellation.


What is the result?

The number of licenses issued indicates the popularity of mediation activities. Only in the first two months of 2019, the licensing authority issued 41 licenses, of which only 3 in Lviv. The regional market is not crowded with intermediary companies.

The total number of Ukrainian companies licensed for mediation is 1793.

Of course, the outflow of skilled personnel to other countries has a negative impact on the labor market and the image of the country as a whole. The remaining personnel are often not professionals, but employers are forced to hire those who remain. Labor migrants from Ukraine can be perceived as less demanding than their resident competitors. There always is a reason that prompted them to go abroad in search of work – insufficient wages, poor production conditions, or something else. And such an employee will compare the working conditions to Ukrainian, which he is dissatisfied, and not with to the best of possible.

At the same time, the desire to go abroad in search of work makes employers competing for employees, improving working conditions and the level of payment. Some Ukrainian employers (most often international companies with offices around the world) already try to provide conditions and remuneration at the European level.

The procedure for obtaining a license is rather complicated, but experience in this field and qualification allow us to qualitatively make the preparation and analysis of the necessary documents, as well as support for obtaining a license, which greatly simplifies the life of the potential licensee.


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