Changes in the area of illegal work and illegal employment
Ministry of Economy of the Slovak Republic introduced a package of measures to improve the business environment (also known as "Kilecko 2"). It includes a total of 198 measures, which also implements changes in the area of illegal work and illegal employment. The new legislation will enter into force on 1 January 2023.
Under the current legislation, illegal work is defined in the § 2(1) of the Act No. 82/2005 Coll. on Illegal Work and Illegal Employment (the "Illegal Labour Act") as dependent labour performed by a natural person for an entrepreneur (legal person or natural person) without establishing an employment or state employment relationship.
Illegal employment is defined in the provisions of Article 2(2) of the Illegal Labour Act in two ways, namely:
a) If an entrepreneur uses dependent labour (employs) of a natural person and does not have an employment relationship or a state employment relationship with that person; or;
b) If the entrepreneur uses dependent labour (employs) of a natural person, has an employment relationship or a state employment relationship with him/her, but has not registered him/her in pension savings system.
According to Article 2a of the Act on Illegal Work, an exemption from illegal work applies if the work is performed for the following entrepreneurs:
a) for a legal person, namely a limited liability company with a sole shareholder, a natural person
b) for a natural person, an entrepreneur,
by their relatives in the direct line of descent, siblings or spouses, under the condition that these persons are insured or pension beneficiaries or kids and students up to the age of 26.
Under the new legislation, the exemption provided for in Article 2a of the Illegal Work Act will also be extended to a limited liability company with up to two shareholders, natural persons who are relatives in the direct line, siblings or spouses.
Sanctioning illegal employment will also be changed. Under the new legislation, the control of illegal employment falls exclusively within the competence of labour inspectorates. However, the maximum penalty for infringements of illegal employment remains at EUR 200 000 pursuant to Article 7b(8) of the Illegal Labour Act.