NON-DECLARATION OF EMPLOYMENT AND LABOUR IN UKRAINE: PREVALENCE, MEASURES FOR MONITORING AND PREVENTION

Abstract

The purpose of the paper is to identify the extent of undeclared labour in Ukraine, as well as to study problems, foundations, and prospects for its preventing in the unstable national socio-economic conditions. According to the EU and ILO methodology, the State Labour Service of Ukraine interprets undeclared labour as a legal paid activity that is not registered fully or partially in accordance with the law requirements. Labour non-declaration plays the important role in the practice of businesses management and competitiveness stimulation in the countries with industrial, neo- and post-industrial economies, which has been developed almost since the middle of the 20th century. The paper proves that undeclared labour is a broader concept that covers legalized (both official and manipulative), as well as shadowy mechanisms of its occurrence and functioning. In the conditions of problematic performance of inspection and sanction powers of the State Labour Service of Ukraine, as well as due to the significant spread of non-standard labour relations (with mediation of an employer’s functions, outsourcing enterprises’ contingents of auxiliary, service and part of specialized personnel), tariff-free remuneration systems stimulate numerous manipulations in the field of labour declaration and decent wages. The source of problems with the spread of remuneration systems, formed on assessments of the performed work complexity and employees’ qualifications, as well as with decent occupation conditions for agency (loan, temporary) workers, should be recognized as the vagueness of their legislative regulation. The priorities for preventing undeclared labour in Ukraine include: wages’ share consistent growth in the structure of production costs; strengthening a cross-control over the obligations’ fulfilment to pay the minimum wage within tariff-free and hourly wage systems; implementation of the well-founded methodology for harmonizing the minimum wage, the subsistence minimum, and the rest of basic social standards attached to them. The expediency of identifying institutionalized and manipulative mechanisms of undeclared labour, their formal and illegal foundations, is confirmed by the classification of the undeclared labour main forms, used by the EU, ILO and the Labour Service of Ukraine; this approach will increase the complexity and effectiveness of systemic measures for its regulation (control, mitigation, prevention).