Table of Contents

Ukraine

Table of Contents

Currency

Hryvnia (UAH)

Payroll Frequency

Bi-weekly and Monthly

Employer Taxes

22%

About Ukraine

Located in Eastern Europe, Ukraine is on the Black Sea, with Russia to its East. The country’s economy formed the core of the former Soviet Union’s powers (after Russia) with its fertile land accounting for more than a quarter of the agricultural output in the region. Following its independence, Ukraine has had a complicated relationship with its former rulers with both economic ties, as well as military conflicts with Russia compromising much of its recent history.

Although the second largest in the Soviet era, Ukraine’s economy has fallen to less than 40% of its pre-independence level. Transportation and spacecraft are two of their biggest exports with Antonov airplanes and KrAZ trucks exported to many countries. Most Ukrainians are Orthodox Christians, with many ethnic groups represented, and with Ukrainian as its official language. Other languages used include Russian and Hungarian.

Employment Relationship

• Permanent Employment

The Ukrainian Labor Code allows the conclusion of permanent employment contracts for an indefinite period. Indefinite term contracts are the default form of employment contracts in Ukraine. Such contracts can be terminated by either party by giving advance notice to the other. Martial law is in effect in Ukraine from March 2022. Under this regime, the norms of Law of Ukraine "On the Organisation of Labour Relations Under the Martial Law" prevail over the norms of the Labor Code. Under this law, the form of an employment contract is determined by mutual agreement of the parties. There are no restrictions on formation of fixed-term contracts for permanent work. Employment contracts can be terminated by employers for the reasons of temporary incapacity as well as absence, by specifying the date of dismissal without notice period. Employees can also request termination of their contract without observing notice period in case of threat to their life and health, with the exception of forced involvement in socially beneficial works under martial law or involvement in performing work on critical infrastructure facilities. 

• Fixed-Term or Specific-Purpose Contracts

Per the Ukrainian Labor Code, a fixed-term employment contract may be concluded in cases when the employment relationship cannot be established for an indefinite period, taking into account the nature of the work, or the conditions of its implementation, or the interests of the employee. Fixed-term contracts may be concluded for a specified period established by the agreement of the parties or concluded for the performance of certain work. A probationary period cannot be included in fixed-term employment contracts with a duration of fewer than 12 months. Fixed-term employment contracts are subject to early termination at the request of the employee in case of an illness or disability which interferes with the contract. If, after the expiration of the employment contract, the employment relationship actually continues and neither party requests termination, the contract is considered to be extended indefinitely. Employers must inform fixed-term employees about vacancies for permanent jobs that meet their qualifications, as well as to ensure equal opportunities for such employees to conclude it. Martial law is in effect in Ukraine from March 2022. Under this regime, the norms of Law of Ukraine "On the Organisation of Labour Relations Under the Martial Law" prevail over the norms of the Labor Code. The form of an employment contract is determined by mutual agreement of the parties. There are no restrictions on formation of fixed-term contracts for permanent work. 

• Temporary Employment Contratcs

The Ukrainian Labor Code allows the use of temporary employees signed to fixed-term employment contracts. The Labor Code also recognizes the employment of seasonal employees. The use of probationary periods in employment contracts is prohibited for temporary workers (signed to contracts with a duration of less than 1 year) and seasonal employees. Martial law is in effect in Ukraine from March 2022. Under this regime, the norms of Law of Ukraine "On the Organisation of Labour Relations Under the Martial Law" prevail over the norms of the Labor Code. The form of an employment contract is determined by mutual agreement of the parties. There are no restrictions on formation of fixed-term contracts for permanent work. Employers can hire temporary employees to replace absent employees. 

Probationary Period

In Ukraine, the maximum length of the probationary period is 3 months for white-collar employees and 1 month for blue-collar workers. However, with the permission of the relevant trade union, the probationary period may be extended to 6 months. For certain statutorily prescribed categories of employees, a probationary period is not permitted. Employers are obliged to serve employees with a 3-day prior notice in writing if an employee is to be dismissed for poor performance during the probationary period. Employees have the right to challenge such dismissals. Martial law is in effect in Ukraine from March 2022. Under this regime, the norms of Law of Ukraine "On the Organisation of Labour Relations Under the Martial Law" prevail over the norms of the Labor Code. During martial law, employers can establish probationary period for all categories of employees. 

Working Hours

In Ukraine, the normal working hours cannot exceed 40 hours per week. Reduced working hours are established by law for certain categories of employees: For employees aged 16 to 18 – 36 hours per week For persons aged 15 to 16 (and students aged 14 to 15 who work during the holidays) – 24 hours per week The working hours of students who work during the school year in their free time may not exceed half of the maximum working hours provided for above for persons of the appropriate age For employees engaged in work with harmful working conditions – no more than 36 hours per week. Martial law is in effect in Ukraine from March 2022. Under this regime, the norms of Law of Ukraine "On the Organisation of Labour Relations Under the Martial Law" prevail over the norms of the Labor Code. The normal working hours can be increased to 60 hours per week for employees employed at critical infrastructure facilities. Reduced working hours can be increased to 40 per week. A 5-day or 6-day working week is established by the employer. The start and end time of daily work (shifts) is determined by the employer.

Holidays / PTO

• Statutory Holidays

1st of January – The New Year Day; 7th of January – Christmas; 8th of March – International Women’s Day; 1st and 2nd of May – International Worker’s Day; 9th of May – Victory Day; 28th of June – Ukraine Constitution Day; 24th of August – Ukraine Independence; One day (Sunday) – Easter; One day (Sunday) – Trinity Day.

• Paid Annual Leave

Ukrainian employees become eligible for annual leave after 6 months of continuous service with their employer. Adult employees are generally entitled to at least 24 calendar days of annual basic leave. Minors under the age of 18 are entitled to an annual basic leave of at least 31 calendar days. Payment for annual leave must be made at least 3 working days before its start. The amount of annual leave pay is calculated by multiplying the average wages by the number of vacation days. At the request of the employee, part of the annual leave (above 24 calendar days) may be replaced by monetary compensation. Annual leave at the initiative of the employer may be transferred to another period only with the written consent of the employee and agreement of the trade union, when giving annual leave due to the earlier period may adversely affect the normal functioning of the enterprise.  Under martial law, all employees can be granted only 24 days annual leave by their employer's decision. If the employee is entitled to annual basic leave for more than 24 calendar days, they can use their unused leave days after the termination or cancellation of martial law. At the employer's decision, unused days of such leave may be granted without salary. Employees working in critical roles can be denied leave by their employers. Employers can also dismiss an employee on annual leave by giving a notification that the last working day is the first day after leave. 

• Sick Leave

In Ukraine, employees are entitled to sick leave with job protection. The period of sick leave must be confirmed by a special form certificate issued by a medical institution. Employers are responsible for paying the employee during the first 5 days of sick leave. After the initial 5 days, sick employees receive benefits from the Social Security Fund. Normally, sick leave is granted for a period necessary for a full recovery. However, an employer, with some exceptions, can unilaterally terminate an employment contract in the case of an employee's absence due to a temporary disability that lasts more than 4 months. Martial law is in effect in Ukraine from March 2022. Under this regime, the norms of Law of Ukraine "On the Organisation of Labour Relations Under the Martial Law" prevail over the norms of the Labor Code. Employers can dismiss employees during their sick leave by indicating the date of dismissal, which is the first working day following the end of the temporary incapacity for work. Social insurance allowances continue as usual. Employers can also deny the request for sick leave.

• Maternity Leave

In Ukraine, maternity leave is granted upon the presentation of a medical certificate. The total length of maternity leave is 18 weeks (126 calendar days) out of which ten weeks are given as prenatal leave while the remaining eight are given as postnatal leave. The postnatal leave is increased to ten weeks (70 calendar days) in cases of complicated delivery or multiple births. The cumulative duration of maternity leave is 126 or 140 calendar days and is given in full regardless of the number of days actually used before childbirth. Ukrainian legislation protects pregnant women from loss of income during maternity leave by providing a maternity allowance. The state maternity allowance covers 100% of the mother's average earnings. Under the martial law, employers are not allowed to deny maternity leave, and employees cannot be dismissed during their maternity leave. Pregnant women are not allowed to work in night work without their consent. It is also allowed to employ them in heavy and dangerous works with their consent. State benefits continue as usual. 

• Paternity Leave

Effective May 9, 2021, Ukrainian employees are entitled to a one-time paid leave at the birth of a child. The leave lasts for 14 calendar days (excluding holidays and non-working days) and is available to: A husband whose wife has given birth to a child The child's father, who is not in a registered marriage with the child's mother, provided that they live together, are related by common life, and have mutual rights and obligations Grandparents or other adult relatives of the child who actually care for the child, whose mother or father is a single mother (or single father) Under martial law effective March 2022, employers can deny paternity leave to employees. It is also allowed to dismiss employees during their leave by mentioning the end date as the first day after leave.  

Termination of Employment

• Notice Period

In Ukraine, employees may voluntarily terminate an indefinite term employment contract after serving 2 weeks' written notice. When an employer is seeking to terminate an employee for economic or organizational reasons, the required notice period is at least 2 months. If the employee commits a gross violation of the employment contract, they may be dismissed without notice. During a probationary period, an employer may cancel the employment contract by giving notice to the employee in writing at least 3 calendar days before terminating the contract. Martial law is in effect in Ukraine from March 2022. Under this regime, the norms of Law of Ukraine "On the Organisation of Labour Relations Under the Martial Law" prevail over the norms of the Labor Code. Employees can terminate their employment contract without a notice in case of conduct of hostilities in the areas in which their workplace is located, and the existence of a threat to their life and health. It is also possible for employers to dismiss an employee during the period of temporary incapacity for work, as well as during the period of the employee's vacation by just specifying the date of dismissal which is the first working day following the date when a temporary inability to work or a vacation ends. 

• Severance Benefits

The Ukrainian Labor Code states that upon the termination of an employment contract for staff reduction or reorganization, the employee must be paid severance pay of at least 1 average monthly salary. If the employment contract termination is due to the employer's violation of a labor law, collective agreement, or employment agreement, at least 3 months' average earnings is due as severance, although a collective agreement may stipulate a higher amount of severance. The termination of the employment contract of a corporate officer entitles the officer to 6 months' average salary of severance pay. Martial law is in effect in Ukraine from March 2022. Under martial law, while employers must take all possible measures to ensure the realization of the right of employees to timely receipt of severance pay, they shall be exempted from liability for breach of the obligation regarding payment terms if they can prove that this breach occurred as a result of hostilities or other force majeure circumstances.