UKRAINE

Home » UKRAINE – Facts & figures

Facts & figures

General Information

Government Type: Republic with a presidential-parliamentary system

Capital: Kiev

Currency: Ukrainian hryvnia

Main Language: Ukrainian (majority), Polish, Yiddish, Rusyn, Belarusian, Romanian or Moldovan, Bulgarian, Crimean Turkish, or Hungarian. Russian is the most important minority language.

Economic Indicators

GDP Per Capita: 3,659.03 USD (2019)

Main Business sectors:

Fuel
Mining
Aircraft and Aerospace
Agriculture
Tourism

Workforce indicators

Employment Rate: 55% (first quarter of 2021)

Higher Education Rate: approx 83%

Employment Manual – UKRAINE

Employment laws and regulations

If work is performed in Ukraine, the employment relationship is governed by the law of Ukraine, unless an international agreement provides otherwise.

Ukrainian employment law does not recognise implied clauses. However, statutory rules will have mandatory application if:

certain issues are not regulated by the text of the employment agreement; or
the provisions of the agreement are less favourable to the employee than the legislative rules.

Employee agreements

According to the Civil Code of Ukraine, a contract for services has to be concluded in writing. An employment agreement may be executed as a written agreement signed by the parties or as an employer order.

For certain groups of employees (e.g. company directors), Ukrainian law provides for the conclusion of an “employment contract” which can be distinguished from the regular employment agreement. The law allows for employment contracts to contain additional provisions and deviate from default provisions of the law with respect to certain conditions (term, termination grounds, material liability).

Key Employee Rights

The employee may challenge his or her dismissal before the court within one month of receipt of the labour book or a copy of the dismissal order. In addition to a reinstatement claim, the former employee may demand payment of the average daily earnings for the period between dismissal and the date of reinstatement, as well as moral damages and court expenses (including legal support).

Diversity and equality regulations

Basic anti-discrimination provisions are included in the Labour Code of Ukraine. Article 2 titled “Equality of labour rights of citizens of Ukraine” prohbitis workplace discrimination, inlcuding direct and indirect discrimination, based on a broad list of portected grounds.

There is also a quota for employers that requires that 4% of their employees are persons with disabilities.

Termination

Termination Process

In all cases, a decision regarding dismissal must be made in the form of a written order, signed by a duly authorised representative of the employer. The employee is to be provided with a copy of the dismissal order and his/her labour book on the last day of his employment.

Notice Period

The statutory minimum notice period is 2 months if the case involves redundancy. However it varies depending on the reason for termination of employment. For example, no notice period applies if the parties agree on consensual 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 employer’s initiative 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.
For all other cases: on completion of the relevant procedures contained in the employment agreement for termination.

Severance Pay

Depending on the reason for the termination of employment, employees may have the right to a statutory severance payment.

Contract terminated because of employer’s violation of labour laws or contract agreement, employee entitled the right to a severance payment of 3 average monthly wages
Contract terminated because of redundancy, dismissal due to unsuitable competence and qualification, employee entitled the right to receive a severance payment of one average monthly wage
Contract terminated for the employment of corporate officers will automatically trigger a severance payment due of an average 6 monthly wages.

Employment Taxes

Employer Payroll Tax

Social Security Payroll Tax which is at 22 percent.

Employee Payroll Tax

Pays 6% into a state fund for unemployment benefit

Employee Income Tax

Standard tax rate of 18 percent.

Applies to income received as salary and other benefits under employment and civil agreements, foreign income, and other income that are not covered elsewhere.
Also applies to all passive incomes such as interest, royalties, dividends, and investment profits
Dividends paid by resident CIT (Corporate Income Tax) payers are at 5 percent and Dividends paid by non-resident, mutual investment fund, and non-payers of CIT are at 9 percent.
Military tax rate of 1.5 percent.

Mandatory Employee Benefits

Paid Leave

Employees in Ukraine are entitled to 24 days of paid yearly leave after working for the company for more than six months. Ukrainian employees are allowed to carry over paid annual leave to the following year if it is not used throughout the year. For certain categories of employees, the law provides for a longer vacation period – for example:

Employees with a disability are entitled to 26 or 30 calendar days, depending on the class of disability;
Minor employees are entitled to 31 calendar days.

Sick Leave

The minimum sick leave payment varies depending on the periods of social insurance paid for either by the employer on the employee’s behalf or by the employee himself or herself (eg, if self-employed):

50% of the average daily earnings – up to three years;
60% of the average daily earnings – between three and five years;
70% of the average daily earnings – between five and eight years; and
100% of the average daily earnings – more than eight years.

Due to the COVID-19 pandemic, new provisions have been introduced into Ukrainian law to allow sick leave to be granted with the payment of 50% of the employee’s average daily earnings, regardless of seniority (100% for medical workers), to employees who are required to self-isolate (where instructed to do so by a doctor and under medical observation).

Public Holidays

Ukraine officially observes at least nine religious holidays per year. Workers are generally allowed up to three days for non-Orthodox holidays.

The majority of national holidays last two days.

Many workers are allowed additional days off for local and territorial observances.

If a national holiday falls on a weekend, the following Monday is officially observed as a holiday. In the event a national holiday falls on a worker’s scheduled day off, he or she may choose to take an additional day off following the holiday.

Maternity Leave

Mothers are entitled to 70 days of maternity before the expected delivery date. Mothers are entitled to 56 (occasionally 70) days of maternity leave after the delivery of the baby. Women are also entitled to partially paid leave until their child turns 3.

Specific Employee Benefits and Industry Benchmarks

Minimum Wage

There is a national minimum wage, which changes from time to time as approved by the Law of Ukraine on the State Budget for the respective year. Currently, it is UAH 6,000.

Working Time

The number of working hours for full-time employees cannot exceed 40 hours per week, other than when a non-fixed working day (or week) has been established, as for certain categories of employees. The duration of the working day before a holiday or a weekend shall be reduced by one hour. In the case of a six-day working week, the duration of the working day before the weekend cannot exceed five hours.

Ukrainian law establishes, among other things, the following working hour regimes:

normal business hours, when overtime is paid at double the standard rate of pay and employees are entitled to a vacation allowance of 24 calendar days per year;
non-fixed working day, which may be established for employees whose working day cannot be estimated in advance. These employees are entitled to a vacation allowance of 24 calendar days per year and to additional vacation of up to seven working days;
flexible working hours; and
remote working (teleworking).

The Labour Code generally allows night work, provided that working time at night is reduced by one hour. Employees working at night receive an increase in their base salaries that must not be less than 20 per cent of their base salary for each hour of night work. It is prohibited to engage pregnant women and employees under 18 years old, among others, for night work.

Protected Employees

Pregnant women and women with children under three years old are a specially protected group of employees and it is prohibited for them to be dismissed at the employer’s initiative except in the event of the employer going into liquidation.
Until a new job is offered, an employer has to pay a Protected Employee’s average salary, but only for up to three months after the expiry of a respective employment agreement.

Unemployment Benefits

Unemployed people are supported by the state. This mainly consists of unemployment benefits and training programmes, which aim to help individuals gain new qualifications and find new employment.

UKRAINE

Facts & figures

Employment Manual – UKRAINE

Termination

Employment Taxes

Mandatory Employee Benefits

Specific Employee Benefits and Industry Benchmarks

Get an Employment Budget Simulation

Get an Employment
Budget Simulation