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News & Media

Illegal Employment – A “mitigating” amendment

Date: 18/01/2018

Long criticized Law on Illegal Work and Illegal Employment (Act No. 82/2005 Coll. – hereinafter the “Illegal Work Act”) has recently been amended by Act No. 294/2017 Coll., and with effect from 1 January 2018 it should bring more mild impacts on “forgetful” employers.

Until recently, employers were placed on a list of illegal employers and fined by the Labour Inspection, even for a delay in reporting an employee to the Social Insurance Agency just one hour after the employee came to work.

The Illegal Work Act considers as illegal employment not only the use of dependent work without the establishment of an employment relationship or a civil service employment (so called work without a contract or agreement), as well as the use of the work of a non-EU citizen without appropriate permits, as well as non-fulfilment of the obligations according to Section 231 par. 1 letter b) of the Act on Social Insurance (so called employer´s registration obligation towards the Social Insurance Agency).

The result of such infringement is not only fines, but such an employer is also kept in a publicly accessible list of persons, who violated the ban on illegal employment -  http://reg.ip.gov.sk/register/ and may not, for example receive state subsidies, may not take part in public tenders or apply for EU funds. If it is an Agency for temporary employment, it loses its authorization for activity.

The amendment to the Illegal Work Act did not bring any change as for the deadline to fulfil the obligation of the employer to register an employee with the Social Insurance Agency.

The employer´s obligation to register an employee at the latest before commencing the work activities by an employee remains (it means that if an employee starts to work on 1 February 2018 and his work shift starts at 8.00 a.m., the employer must register him/her with the Social Insurance Register no later than on 1 February 2018 at 7.59 a.m.; the Social Insurance Register records the exact time of employee´s registration).

For the purpose of assessing illegal employment the amendment introduced an additional 7-day time limit for registration with the Social Insurance Register, but at the latest until the commencement of inspection by the Labour Inspection, if such inspection started within 7 days of commencing the work of the employee.

The amendment thus removed the current hardness of the law, which also punished additional discovery, so called back-dated illegal employment, which was not illegal employment at the time of the labour inspection. In practice, this was often the case of administrative misconduct or late reporting of an employee with the Social Insurance Agency.

This means that from 1 January 2018 the Labour Inspection will no longer establish late registration of an employee with the Social Insurance Register as illegal employment, if the employer has registered an employee within 7 days of commencing employee´s work, but at the latest by initiating an inspection of illegal work and illegal employment.

In any case, however, we do not recommend employers to rely on this additional 7-day period. If the Labour Inspectorate arrives for inspection within this time limit, for example on the 3rd day from the beginning of the work by an employee and the employer will not have a registered employee in the Social Insurance Register, such a case will be considered illegal employment with all its consequences. However, if the Labour Inspection starts to perform inspection at the employer, for example on the 10th day after commencement of the work by an employee, whom the employer registered with the Social Insurance Agency with a delay on the 6th day after commencement of the employee´s work, such a case will no longer be considered as illegal employment. The amendment should thus prevent reverse search and punishment of administrative violation or employer´s delay, when at the time of the Labour Inspection, the employee is already registered in the Social Insurance Register, even if with delay.

Employers, who are already on the list of persons, who have violated prohibition of illegal employment, for the purposes of maintaining this list and to demonstrate compliance with the conditions under special regulations (for example, for participation in a public tender, for the application for subsidies from the state budget,  application for EU funds), on the basis of a written application submitted to the National Labour Inspectorate, shall not be considered as illegal employers by lapse of 15 days of the date of receipt of application, if their violation was so called back-dated illegal employment and thus at the commencement of inspection had all of their employees registered with the Social Insurance Agency (i.e. the employer registered his employee with a delay of up to 7 days from the beginning of the employee´s work, but at the latest until the start of conducting labour inspection).

Should you have any questions or if you are interested in additional information, please do not hesitate and contact our law firm.

Mgr. Martina Poliačiková
Senior Associate