- Overview: Ukraine
- Global HR Compliance
- Global PEO and payroll
- Work permit for hiring expats via PEO
- Expand without a company set up
- Contractor vs. employee: which is better?
Global HR Compliance in Ukraine
The war for global talent has never been tougher. 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 contracts
In Ukraine the labor relations with an employee begin with the hiring and the employment contract. At the same time, several types of employment contract are legally established.
The employment contract is an agreement between the employee and the employer, under which the employee undertakes to perform work specified in this agreement, subject to the internal labor regulations, and the employer – to pay salary and provide the working conditions stipulated by the legislation, collective agreement and agreement of the parties.
The following types of labor contracts are legally stipulated:
- an indefinite employment contract;
- an employment contract concluded for a specified period;
- an employment contract concluded at the time of performance of a certain work;
In this case, two forms of conclusion of an employment contract are defined:
Typically, an employment contract is concluded in writing.
The employment contract can`t contain conditions that worsen the position of the employee in comparison with the rules of the current legislation.
The parties to the employment contract are an individual (citizen) and an employer.
An employer can be a legal entity, an individual (both a business entity and not), as well as self-employed persons (private notaries, lawyers, doctors, etc.).
Individuals can be hired only from a certain age. As a general rule, only a person who has reached the age of 16 can be employed. As an exception and subject to certain conditions, persons aged 14 and 15 can be hired with the consent of one of the parents.
For certain types of work, you can only be employed if you are 18 years old (Article 190 of the Labor Code).
Some legislative acts provide for a higher age limit for hiring, for example, for the post of President of Ukraine, Deputy, Commissioner for Human Rights, judge, etc.
In some cases, the law may also provide for the maximum age of an employee, as, for example, in relation to civil service, membership in the High Council of Justice, etc.
If the law establishes requirements for age, education level, health status of an employee, etc., the party to the employment contract must be a person who meets these requirements.
An employment contract can`t be concluded with a citizen who has a medical opinion on the contraindication of the proposed work for health reasons.
Also, it is not allowed to conclude an employment contract with a person deprived of such a right in court.
The employer has the right to impose restrictions on the cooperation of relatives if they are directly subordinated or controlled by each other during the performance of labor duties.
An employee is required to personally perform the work entrusted to him and has no right to transfer it to another person, in addition to cases determined by law.
The employer has no right to demand performance of work, not stipulated by an employment contract.
# Minimum (Statutory) Employment Rules and Regulations in Ukraine
# Hours of work:
According to Art. 50 of the Labor Code, the normal working hours of employees can not exceed 40 hours per week.
In addition, there are certain categories of workers for whom shorter working hours are set:
- for employees aged 16 to 18 – 36 hours per week;
- for people aged 15 to 16 (students aged 14 to 15 working in the period of holidays) – 24 hours per week;
- for workers involved in work with harmful working conditions – no more than 36 hours per week;
- for teachers of the I-IV classes – 4 hours of teaching work per day (24 hours per week);
- physicians and mediators of hospitals, maternity hospitals, outpatient clinics – 6 hours 30 minutes per day.
For employees, a five-day working week with two days off is set. In the course of a five-day working week, the duration of daily work (change) is determined by the rules of the internal labor regulations or the schedules of variability, which are approved by the owner or authorized by him in agreement with the elective body of the primary trade union organization (trade union representative) of the enterprise, institution, organization with observance of the established duration of the worker weekly.
At those enterprises, institutions, organizations, where by the nature of production and working conditions the introduction of a five-day working week is not feasible, a six-day working week with one day off is set.
At six-day working week, the duration of daily work can not exceed 7 hours at a weekly rate of 40 hours, 6 hours at a weekly rate of 36 hours and 4 hours at a weekly rate of 24 hours.
A shorter working time should be distinguished part-time (or week). Thus, an agreement between the employee and the owner or authorized body can be established both during hiring, and subsequently part-time or part-time working week.
# Probation period:
The probationary period of an employee is established when entering into an employment contract. Such a probation period is intended to check whether the employee is in charge of the post. The term of the probationary period is indicated in the order of recruitment.
The labor law provides for a list of persons for whom a probation period is not set:
- persons under the age of 18 (up to 18 years old);
- young workers (who have finished studying in vocational educational institutions);
- persons discharged from military or alternative (non-military) service;
- young specialists (after higher education);
- disabled persons (who have MSEC Reference and Work Directions);
- persons who won the competition for filling vacant positions;
- pregnant women;
- persons who were trained at an employer with a break from the main job;
- mothers who self-educate a child under the age of 14 (disabled child);
- Persons working for a fixed-term employment contract of up to one year;
- persons working temporarily or for the period of seasonal work;
- persons elected to the post;
- persons who are moving within the enterprise.
In addition, the probationary period is not set for employees who are employed at a company in another locality (during a transfer), and in legally defined cases.
The probation period for employment is:
- not more than 3 months – in common cases;
- no more than 1 month – for workers;
- not more than 6 months – in some cases, in agreement with the trade union.
The term of the probtion is deemed to be completed if the employee continues to work, that is, successfully passed the probation period. The termination of an employment contract with such an employee becomes possible only in the general order. After the probation period, the employment contract of such an employee becomes indefinite. The new order in this case is not issued.
An employee who does not correspond to the position or work performed is exempted during the probation period, which is reported in writing within 3 days.
# Annual leave:
Article 4 of the Law of Ukraine “On Holidays” of November 15, 1996, No. 504/96-VR establishes the following types of annual vacations:
- basic vacation;
- additional leave for working with harmful and difficult working conditions;
- additional leave for a special type of work;
- other additional leave provided by law.
At the same time, other types of annual vacations may be established by a collective agreement, agreement and labor contract.
The right to paid annual leave is stipulated in Art. 45 of the Constitution of Ukraine. Conditions, duration and the procedure for granting vacations are stipulated by the Labor Code, the Law on Holidays and other legislative acts.
The right to leave includes citizens who are in labor relations with enterprises, institutions, organizations irrespective of the type of activity and branch affiliation, as well as citizens who work under an employment contract on natural persons (part 1 of Article 2 of the Law on Vacations).
That is, employees and workers working in part-time or reduced working hours have equal rights with other employees to receive annual leave.
Citizens who perform work in an enterprise on the basis of a signed civil law agreement, no right to leave.
The duration of the annual main leave should be not less than 24 calendar days for the worked working year, which is deducted from the date of the conclusion of the employment contract.
The current legislation also provides for a longer period of leave for certain categories of employees.
The specific duration of the annual additional leave is set by a collective agreement for each type of work, professions and positions or an employment contract.
Annual basic and additional leave can be provided at the same time or separately at the request of the employee.
Duration of vacations irrespective of the modes and schedules of work is calculated in calendar days.
Annual leave is usually provided to the employee in such a way that they are used before the end of the working year. It should be noted that in the first year the worker has the right to complete full-time leave only after 6 months of continuous work. However, some categories of workers may receive full-time leave before the expiry of 6 months.
If the holiday is granted earlier, before the 6-month period, the duration of the vacation is calculated in proportion to the time worked.
# Parental leave:
The right to receive maternity leave has insured persons, that is, individuals who, according to the legislation, are subject to compulsory state social insurance and pay (pay) and / or pay a single contribution in accordance with the law.
The insured persons for compulsory state social insurance in connection with temporary incapacity for work include:
- individuals who work under the terms of an employment contract (contract);
- individuals – entrepreneurs;
- persons conducting independent professional activity;
- persons who take voluntary participation in compulsory state social insurance, in particular, members of a farm, a private peasant farm, etc.
The length of the maternity leave due is 70 calendar days before childbirth and 56 (in the case of complicated births or the birth of two or more children – 70) calendar days – after childbirth.
According to the Law on Social Insurance, maternity benefits are provided to the insured person in the form of material security, which compensates for the loss of salary (income) for the period of maternity leave.
The length of the leave due to pregnancy and childbirth is 70 calendar days before childbirth and 56 (in the case of complicated births or the birth of two or more children – 70) calendar days – after childbirth.
For women who fall into one to three categories of people affected by the Chernobyl disaster, pregnancy and maternity benefits are paid for 180 calendar days of the leave (90 days before childbirth and 90 days after childbirth).
In accordance with Law of Ukraine “On Vacations” at the request of a woman after the end of the maternity she is given a childcare leave until she reaches her three-year age. An enterprise at its own expense may provide such leave of a longer duration. A leave is not granted if the child is in state maintenance.
A childcare leave may be used, in whole or in part, within the prescribed time period by the father, grandmother, grandfather or other relatives who are actually caring for the child, or the person who adopted or took care of the child.
# Sick leave:
Payment to individuals for temporary disability (sick leave) is carried out in accordance with the legal acts that are in force in the system of compulsory state social insurance, which determine the legal grounds for receiving such assistance, the procedure for providing such assistance, the duration and amount of benefits.
The payment of temporary disability assistance in the form of material support, which fully or partially compensates loss of salary (income), in accordance with the Law provides for the following cases:
- temporary disability due to illness or injury not related to an accident at work;
- the need for caring for a sick child;
- the need to care for a sick family member;
- caring for a child under the age of 3 years or a disabled child under the age of 18 in the case of a mother or other person caring for the child;
- quarantine introduced by the organs of the sanitary and epidemiological service;
- temporary transfer of the insured person in accordance with the medical report on easier less paid work;
- prosthetics with placement in the hospital of the prosthetic and orthopedic enterprise;
- stay in the rehabilitation departments of the sanatorium-resort establishment after the suffered diseases and injuries.
The reason for the appointment of a temporary disability benefit in accordance with the Law is issued in the prescribed manner, a sick list. In this case, the procedure and conditions for the issue, continuation and registration of sick lists, and the control over the correctness of their issue, should be established by a specially authorized central body of executive power in the field of health care in agreement with the Fund.
Overtime is considered to be over the fixed working day. The owner or an authorized body of the authority may apply overtime work only in exceptional cases determined by law, namely:
- during the work necessary for the defense of the country, as well as the prevention of civil or natural disasters, industrial accidents and the immediate elimination of their consequences;
- at carrying out of public works necessary for water supply, gas supply, heating, lighting, sewage, transport, communication – to eliminate accidental or unexpected circumstances that violate their proper functioning;
- if necessary, finish the work begun which, due to unforeseen circumstances or occasional delay in the technical conditions of production, could not be completed during normal working hours when its termination could lead to damage to or destruction of public or public property, as well as in case of necessity of urgent repair of machines, machine tools or other equipment, when their malfunction causes a stoppage of work for a significant number of workers;
- if necessary, performing loading and unloading operations in order to prevent or eliminate the simple rolling stock or aggregate of goods at the points of departure and destination;
- for continuation of work in the absence of a worker who intervenes when work does not allow a break; in these cases, the owner or an authorized body is obliged to immediately take measures to replace the change by another employee.
For overtime work it is prohibited to involve:
- pregnant women and women with children under the age of three;
- persons under the age of eighteen;
- workers who study in general education schools and vocational schools without interruption from production, during the classes.
Legislation may also provide for other categories of workers who are prohibited from engaging in overtime work.
Women who have children between three and fourteen years of age or a disabled child may be involved in overtime work only with their consent.
Involving disabled people in overtime work is possible only with their consent and provided that this does not contradict the medical recommendations.
In addition, overtime work can only be carried out with the permission of the elected body of the primary trade union organization (trade union representative) of the enterprise, institution, organization.
Overtime work must not exceed four hours for each employee for two consecutive days and 120 hours per year.
# State minimum salary:
According to the Law “On the State Budget of Ukraine for 2018”, the minimum salary in 2018 will be from 01.01.2018: in the monthly amount – 3723 hryvnia; in hourly amount – 22.41 hryvnia.
# Employee dismissal:
Grounds for terminating an employment contract in accordance with Art. 36 of the Labor Code may be:
- the agreement of the parties – the parties, namely the company and the employee, agreed on the issues of dismissal and have no claims to each other on this issue;
- termination of the term1 – this situation is foreseen only for employees with whom fixed-term employment contracts have been concluded. In this case, in order to terminate the employment relationship with the employee, the enterprise must issue an order on the last day of its work. In the event that the order for release was not issued within the specified period, the employment contract will be deemed concluded for an indefinite period;
- the prize or entry of an employee for military service, referral to alternative service – for the release of an employee must provide the administration of the enterprise a document confirming the prizes (entry) for military service or referral to alternative service;
- the transfer of an employee, with his consent, to another enterprise or transfer to an elected office. For dismissal, it is necessary to submit the owner of the enterprise to which the employee is transferred, or the decision of the relevant body on the election of the employee;
- the refusal of the employee from the transfer to work in another area with the enterprise, as well as the refusal to continue work in connection with the change of essential working conditions. Under the change of essential working conditions is understood the change of systems and sizes of wages, benefits, working regime, establishment or cancellation of part-time, change of grades and titles of positions, etc.;
- entry into force by a court judgment, which an employee has been convicted (except cases of probation) to imprisonment or other punishment, which excludes the possibility of continuation of this work;
- the grounds provided by the contract. The contract is a special form of an employment contract, in which it is possible to provide conditions for termination of the contract, including pre-term. The contract may specify the grounds for its termination, which is absent in the labor law, for example, in the contract with the head of the enterprise it may be noted that the contract is terminated in the event that the enterprise has ended the year with losses;
- termination of an employment contract on the initiative of an employee (Articles 38, 39), on the initiative of the owner or an authorized body (articles 40, 41) or at the request of a trade union or other authority authorized to represent the labor collective of the body (Article 45).
An employee according to Art. 38 of the Labor Code has the right to terminate an employment contract concluded for an indefinite period, warning about it by the owner or an authorized body in writing in two weeks. This period can be reduced if the employee’s application for dismissal from work on his own will is due to the inability to continue work. The employer in this case must terminate the employment contract within the term requested by the employee. Failure to continue work may be due to the following reasons:
- moving to a new place of residence;
- the transfer of a husband or wife to work in another locality (if necessary, can be confirmed, for example, with a certificate of employment or an extract from the work copy);
- admission to an educational institution, which can be confirmed by the certificate of such institution;
- inability to reside in a given area, confirmed by a medical report;
- pregnancy (can be confirmed by a medical report);
- care of the child until she reaches the age of fourteen or a disabled child;
- taking care of a sick family member according to a medical report or a disabled person of group I (may be confirmed by a conclusion, as well as a certificate of residence of the family member with the worker or, if they do not live together, the place of residence of the family member makes it possible an employee for such care);
- retirement, which can be confirmed by the document on the appointment of a pension, or the achievement of a worker of retirement age;
- recruitment in the competition (can be confirmed by the document on enrollment for work in the competition);
- other valid reasons (for example, an employee has the right to terminate an employment contract of his own choice in the period specified by him, if the employer does not comply with the labor law, the terms of a collective or employment contract).
If the employee, after the expiration of the notice of release, has not left work and does not require termination of the employment contract, the employer does not have the right to release him on the previously filed application, except in the case when another employee has been invited to his place, which according to the law couldn`t be denied conclusion of an employment contract.
As regards term contracts, according to Art. 39 of the Labor Code, a fixed-term employment contract (for a certain period or until the end of a certain work) is subject to the termination before end of the contract.