- Overview: Ukraine
- Global HR Compliance
- Global PEO and payroll
- Work permit for hiring expats via PEO
- Contractor vs. employee: which is better?
- Expand without a company set up
Global HR Compliance in Ukraine
Got Ukrainian workers who plan to go abroad fleeing the war started by Russia? Or employees who have already left Ukraine because of the war and found themselves in Poland, Hungary, the Czech Republic, Romania, Slovakia, Slovenia or any other European country?
Acumen International can help companies like yours, including IT, to compliantly employ your Ukrainian talent in foreign countries within days. Acumen’s global PEO and Payroll solution helps to legally onboard talent on-site or relocate your Ukrainian personnel so you can continue working with them as usual, no matter where they are based now. We will arrange global payroll for your employees and open bank accounts for them. Also, we can provide laptops, mobile phones, and anything the talent needs for work.
Attracting and keeping sought-after international employees requires knowledge. Whether your company is already engaging or planning to engage global workforce in Ukraine, you need to trust that your operations are executed without flaw and without any unnecessary risks.
Businesses of all sizes face a devastating lack of information and support on global employment, taxation, and immigration in Ukraine. There’s a common and significant gap between what’s required to be 100% compliant and what most organizations actually have at their disposal.
Acumen International can fill the gap in fragmented Global HR Compliance knowledge
We are experts in global workforce employment in Ukraine, and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.
We act as an information service for corporate clients, agencies, and independent contractors and freelancers. Our Global HR Compliance service in Ukraine will help you:
- Navigate legislation and local nuances of Ukraine. You need to know what is acceptable and what can expose you to employment litigation as well as employee / independent contractor misclassification risk in Ukraine.
- Avoid areas of possible risk. Certain areas and activities can create unnecessary risk, such as employer-employee relations. We can help you with worker classification, payroll and tax calculations, and social cost contributions.
- Handle currency exchanges and local invoicing in Ukraine. We save you time and effort, freeing you from having to understand complicated regulations and tax calculations written in the local language and subject to frequent changes.
- Create employment contracts and handle compliant engagements. Our objective is to assist you with international HR compliance issues and offer you the best payment and taxation options in Ukraine.
- Manage expatriate immigration and visa support nuances in Ukraine. Acumen International provides information about the best scenarios of expat immigration and employment.
- Handle global recruitment issues. We can help you select the person and then employ him with our help. We advise you on local employment laws and implied compliance risks to determine the most cost-effective, compliant, and risk-free solution for you.
- Withdraw from the region in the least risky and most cost-effective way. If you choose to do so, we can help you withdraw from the region as simply as possible.
Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.
With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Ukraine.
Any enterprise could not function properly without a thorough learning of the labor legislation of the country in which it carries out business. If the company does not develop internal regulations in accordance with the local legislation of Ukraine, then it will inevitably face a number of problems. Any conflicts that employees initiate in such a situation will be resolved not in favor of the company.
International companies opening offices in Ukraine should understand the specifics of the processes of hiring, dismissal, provision of state guarantees and other processes in human resources management in order to avoid risks and productive use of labor force.
Cooperation with Acumen International helps companies solve the problems of functioning and development in a market economy by reducing costs, accelerating adaptation to external conditions, improving the quality of products and services, reducing risks.
Discover the ways of hiring and firing an employee in Ukraine below
Hiring and Firing Workforce in Ukraine Guide
# Employment Agreements
- Permanent employment contracts
- Casual employment contracts
- Fixed-term contracts
In general, most agreements are concluded for an indefinite period. Even though Ukrainian labor law enables an employer to conclude fixed-term employment agreements with its employees, these agreements should be concluded only with those employees whose work is by nature of a limited duration (i.e., when it is possible to estimate the last day of their employment). It is also possible to enter into an employment agreement ‘until the completion of agreed-upon work’ when it is impossible to determine the period necessary to complete the limited scope of agreed-upon work. An employee can also state in his or her employment application that he or she is asking to be employed for a fixed term for family-related or personal reasons. Ukrainian labor law also provides for a special form of the employment agreement, called an employment contract, that may be concluded either for a fixed term or for an indefinite period of time.
The use of employment contracts is limited to cases specifically provided for by the laws of Ukraine, including in certain branches of the economy, for certain types of companies or for certain positions (e.g., for company directors, teachers, scientific research employees, paralegals). A written employment agreement or contract can be concluded before or on the date of issuing a hiring order by the employer and becomes effective on the date of the hiring order. It must be signed by the employee as the party to the employment agreement or contract. The parties can amend the employment agreement or contract at any time. To change the essential terms of employment (compensation, working hours, etc.), the employer must issue an order notifying the employee of such changes at least two months in advance. In addition, the employer must enter the relevant record in the employee’s labor book. The labor book records the employment activity and must be kept by the employer for each employee working for more than five days.
# Employment Termination and Severance Pay (Dismissal)
The employee may terminate labor agreement, concluded for an indefinite period of time, at any time at his own discretion with prior 2 weeks written notification of the employer. In certain cases, an employee may terminate the agreement at once (if such termination is justified and proven by supportive documents, e.g., it is a result of relocation of employee, pregnancy, medical reasons, entering university). In addition, the employee is entitled to terminate the labor agreement in a term at its own discretion, if the employer violates terms of labor or collective agreement or Labor legislation of Ukraine. The employee may terminate labor agreement, concluded for a fixed period of time, only based on one of the following grounds:
- he may not perform his duties due to illness
- he was recognized disabled
- if such termination is a result of the relocation of employee, pregnancy, medical reasons, entering university, which has to be proven by supportive documents
- if an employer violates terms of labor or collective agreement or Labor legislation of Ukraine.
An employer can terminate labor agreement (both concluded for an indefinite period of time or fix-term) only based on grounds, defined by law, including:
- staff reduction
- liquidation of the company
- professional or medical non-compliance of employee
- if a sick leave of the employee exceeds 4 month term
- violation of labor agreement, labor law, or internal rules by the employee
- call-up for military service or mobilization of employee
# It is prohibited to dismiss
- employees during their sick leave or vacation (if initiated by the employer)
- pregnant women, women with children under three, single mothers with children under 14 or a disabled child, except in the event of: company liquidation; or the expiry of a fixed-term employment agreement or contract for the relevant employee
- employees on the sole basis of reaching retirement age; or
- trade union member employees without obtaining prior trade union consent (in most cases)
# Notice period
Notice periods vary depending on the reason for termination. No notice period applies if parties agree on mutual agreement for termination. The general notice period for termination of a permanent employment agreement by an employee is two weeks (except where there is a justifiable reason for earlier termination). The notice periods for termination on the initiative of an employer are:
- For economic or organisational reasons (changes in organisation of production and labour, including liquidation, reorganisation, bankruptcy, or restructuring of the entity and staff redundancy): two months.
- For termination due to an unsatisfactory probation period: three days.
- All other cases: on completion of the relevant procedures for termination.
# Severance payments
Depending on the reason for termination, employees may have the right to a statutory severance payment. If an employee terminates an employment contract for violation of labour laws or the employment agreement by the employer, he or she has a right to a severance payment of three average salaries (calculated as the average of all labor-related payments for the previous two months of employment). Employees can also receive a severance payment in the amount of one average salary in case of redundancy, dismissal due to unsuitable competence and qualification, and certain other cases. Terminating the employment of corporate officers triggers a payment of six months of average salary.
# Employee Benefits and Contributions
The employer is required to make obligatory payments to the State Pension Fund on behalf of employees. The rate of the unified social security contribution is 22 % of an employee’s remuneration (is paid by the employer). Any other social insurance (voluntary) is left to the employer’s consideration.
Non-mandatory benefits that are offered by an employer
financial bonuses, professional training, language courses, the option to work from home, extra days off , discounts on a company’s products, flexible working hours, distant work, company phone, rent of accommodation, company car, medical insurance, gym membership
# Probationary period
When concluding an employment agreement, the employer may set a probationary period for the employee, unless he or she belongs to the categories of employees not allowed by law to be put on probation (e.g., pregnant women, single mothers of children under 14, temporary or seasonal workers, employees working based on the fixed-term employment agreement). The probationary period cannot exceed one month for blue-collar workers or three months for other employees. In certain circumstances (e.g., for state officials), the probationary period can be up to six months, subject to the trade union’s consent. The above duration of the probationary period does not include the days when an employee does not work, irrespective of the reasons for that. Considering the complexity involved in dismissing employees under Ukrainian law, employers frequently use the probationary period as a legal and practical way to ascertain the suitability of a candidate for the position by making a candidate’s employment subject to his or her successful completion of probation. In this case, the terms and conditions of the probationary period must be stated in the hiring order, and the employer can dismiss the non-performing employee within this probationary period merely by stating that the results of his or her probation are not satisfactory. The law obliges the employer to issue a three-day advance dismissal notice to an employee on probation. On the other hand, the employee is not required to provide the employer with any advance notice of his or her intended departure.
Ukrainian law prohibits the use of overtime over the statutory established limits, allowing it only in exceptional cases (such as performance of loading/unloading works and continuing works that must not be stopped due to production process and one employee fails to replace another). Overtime work must not exceed four hours on two consecutive days and 120 hours a year for each employee. Overtime hours are payable at double the hourly rate.
# Work hours
The standard duration of employee working time cannot exceed 40 hours a week. Employees are entitled to a five-day working week, with two days off. A six-day working week with one day off is established for entities where a five-day working week is counterproductive due to a specific production pattern and operating conditions.
# Annual Leave
The statutory minimum amount of annual leave for each employee in Ukraine is 24 calendar days. The minimum number of annual leave days is higher for certain categories of employees:
- 31 calendar days of annual leave for employees under the age of 18.
- Between 26 and 30 calendar days of annual leave for employees with disabilities (depending on the category of disability).
- Other minimums for certain other categories (underground works, other heavy works).
In case of dismissal of an employee, he/she receives monetary compensation for all unused days of the annual vacation and the additional vacation for employees with children.
Unpaid vacation entitlement
An employer must accept an employee’s request for unpaid leave for a specified duration in certain cases, for example, a honeymoon. Apart from the mandatory provision of unpaid leave, an employer can (but is not obliged to) provide unpaid leave to an employee for family or any other reasons. Any unpaid leave will not exceed 15 calendar days a year.
# Sick Leave
Employees are entitled to sick leave in case of illness or injury, provided that the illness or injury is confirmed by a sick leave certificate (or other standard form document) from a medical institution. An employer must pay the allowance at the same rate as the regular salary for the first five days of sick leave. After the sixth day, compensation is paid by the Social Security Fund of Ukraine. The sick leave allowance ranges from between 50% to 100% of an employee’s average wage depending on the length of their employment record:
- 60% for 5 years or less
- 80% for 5-8 years
- 100% for more than 8 years
# Parental Leave
Paid maternity leave is required for a minimum of 70 calendar days prior to the birth and for an additional 56 calendar days (or 70 calendar days in the event of multiple births or delivery complications) after the birth. An employee may take additional unpaid leave until the child reaches three years of age. During the entire period of paid and unpaid leave, an employee retains the right to return to her job, with the full leave period included in calculating an employee’s length of service
Acumen International can help you fast-track your possibilities of entering and expanding your business in Ukraine by providing you with our Employer of Record services. Our unique mix of PEO/EOR solutions will enable you to jumpstart your global operations almost immediately, cost-effectively and compliantly without any need to set up a legal entity first or afterwards.