Many employers believe they maintain documentation properly, but HR audits often uncover typical violations — from missing employment contracts to incorrect vacation records. Our experience shows that errors in HR record-keeping most often lead to sanctions.
Since 2008, UHY-Prostir has been providing payroll and HR administration services. In this article, we’ve collected the most common mistakes in HR record-keeping, examined their consequences, and prepared tips on how to avoid them.
Why It’s Important to Avoid HR Mistakes
Errors in HR record-keeping are not just a formality — they pose a serious risk to business stability. Even a minor violation, such as failing to notify authorities on time about hiring an employee, can result in a fine equal to one minimum wage. More serious violations — such as failing to sign an employment contract or unlawful termination — may lead to heavy financial penalties, lawsuits, frozen accounts, and even forced reinstatement of an employee with compensation payments.
There’s also a reputational factor. Information about labor law violations or conflicts with staff spreads quickly in the market and can damage a company’s attractiveness to both potential employees and partners.
The situation is further complicated by constant legal changes: stricter requirements for military registration, updated vacation rules, clarifications regarding remote work, and more. Employers must carefully monitor these updates since ignorance of the law does not exempt them from responsibility.
A professional approach to HR record-keeping is key to business stability and security. It requires not only expertise in labor law but also continuous monitoring of legislative changes and timely adaptation of internal company processes. This approach minimizes legal and financial risks, prevents unnecessary expenses, and safeguards a company’s positive reputation.
The Top HR Record-Keeping Mistakes
The list below is based on practical cases our team has encountered during inspections by the State Labor Service and tax authorities. These are the most common violations in HR record-keeping, even among experienced specialists. Each can lead to significant financial losses and legal risks. For convenience, we’ve grouped them by stages of the employment relationship — from hiring to termination.
Hiring and Employment Contracts
- Lack of an approved procedure for hiring employees (required documents not prepared, no notification submitted to authorities);
- Incorrect or incomplete description of working conditions, pay, or probation terms in employment contracts;
- Concealing employment relationships (e.g., using civil contracts instead of employment contracts);
- No contracts for remote or home-based work.
Consequences: Fines from the State Labor Service: for undeclared work — 10 minimum wages (MW) per employee; for late notification to tax authorities and other violations — 1 MW each.
Personal Data and HR Documentation
- No personnel files or incomplete personal records (Form P-2), failure to update personal data;
- Missing required HR documents (internal labor regulations, collective agreements, job descriptions);
- No logbooks, such as document movement logs or employment record book registers.
Consequences: Administrative fines from UAH 510 to 1,700 for each missing HR document (up to UAH 5,100 for repeated violations). Other violations — 1 MW fine each, binding orders from authorities, and increased risk of inspections.
Changes in Employment
- No approved procedure for transfers or salary increases;
- No procedure for changing essential working conditions.
Consequences: Fine of 1 MW per violation.
Vacation Records
- No approved vacation schedule;
- Vacation granted without an employee request or without an order;
- No records of unused annual and additional vacation days;
- Instead of granting vacation, balances are written off or compensated in cash.
Consequences: Fine of 1 MW per violation; risk of labor disputes and additional compensation payments.
Staffing and Job Positions
- Missing or outdated staff schedule;
- Job titles not in line with the official Classification of Professions;
- Unequal salaries for employees holding the same positions.
Consequences: Fine of 1 MW per violation; risk of lawsuits and recognition of wage discrimination.
Working Hours and Non-Standard Work Arrangements
- Missing or incorrectly completed timesheets;
- Incorrect procedures for business trips, weekend work, and overtime;
- Additional work without formal job combination approval;
- Missing or delayed compensation payments for non-standard work.
Consequences: For delayed or missing payments — fine of 3 MW; for other violations — 1 MW each.
Termination of Employment
- No approved procedure for dismissals;
- Violating the legal grounds or procedure for termination;
- Failure to pay required compensation upon dismissal.
Consequences: Employee reinstatement, back pay for forced absence, and fines:
- 3 MW — for delayed final settlements;
- 2 MW — for not meeting minimum wage guarantees;
- 1 MW — for other labor law violations related to termination.
Multiple violations are penalized simultaneously, which significantly increases financial liability.
Employment of Persons with Disabilities
- Failing to meet quotas for jobs for persons with disabilities;
- Not complying with requirements for reduced hours or special conditions based on individual rehabilitation plans.
Consequences: Fines for each unfilled mandatory position — equal to the average annual salary of a staff member.
Each of these mistakes is not only a risk of fines or orders from authorities but also a direct threat to a company’s reputation. Non-compliance with HR documentation requirements, late notifications, or ignoring legal rules undermine trust from employees, partners, and regulators. Detecting and correcting these issues in time should be seen as a strategic investment in financial stability, legal security, and sustainable reputation.
How We Help Avoid These Mistakes
We offer comprehensive HR outsourcing and legal consulting services. Our basic package includes preparing employment contracts, orders, transfers in compliance with the law, as well as managing vacation records.
We also provide additional services, including:
- digitization of employment record books;
- submitting data to the Pension Fund of Ukraine (PFU);
- drafting internal regulations — job descriptions, policies, collective agreements, internal labor regulations;
- preparing collective reports to the PFU;
- drafting individual agreements and supplementary contracts.
A key part of our work is providing legal advice on labor law. We help employers correctly apply legislation, avoid typical HR record-keeping mistakes, and defend company interests in labor disputes.
We continuously improve our expertise — monitoring legislative changes, attending professional webinars and trainings, and integrating new rules into daily practice.
Guarantees and Transparency
We ensure complete confidentiality of client data — from employee personal information to financial and legal records. HR record-keeping is carried out in compliance with current laws, both in paper form and through specialized software (“KOMINTEH. HR Management”) for electronic document flow.
Every stage of our work is transparent for the client: you can check the status of any document, review interim results, and be confident all actions are performed correctly and on time. This helps avoid misunderstandings and ensures stability of HR processes.
Why Choose Us?
- Professional education & certifications: our specialists have higher education in law, accounting, and taxation, and regularly attend webinars and courses;
- Years of experience: we’ve been supporting businesses and NGOs since 2008, working with both Ukrainian and international companies;
- Client feedback: numerous recommendation letters and reviews from Ukrainian and foreign companies, funds, and organizations;
- Individual approach: we tailor HR solutions to each business’s structure, scale, and corporate culture.
Proper HR record-keeping is an investment in your company’s stability and security.
Timely detection and correction of mistakes helps save money and protect business reputation.
Contact us for a consultation — we will analyze your HR documentation, propose optimal solutions, and help set up processes without risks.
To learn about cooperation terms and receive professional advice, reach out to us via the contact details provided on our website’s “Contacts” page by phone or email. You can also leave a request directly through the contact form on this page.
On the UHY-Prostir website, you can also read:
- How to establish or restore accounting in a company;
- How to restore bookkeeping in a company;
- Legal contract review services for business.
