Hire in Ukraine
Here’s where you get started with human resources best practices and hiring in Ukraine.
Ukrainian Hryvnia (UAH)
Key Country Facts
Ukraine gained independence in the late 20th century, with the dissolution of the USSR in December 1991. It helped to found the Commonwealth of Independent States (CIS), an association of countries that were formerly republics of the Soviet Union. It adopted a new constitution in 1996. Today it is a unitary republic, with the country divided administratively into a number of provinces.
Ukraine is the second-largest country by area in Europe after Russia, covering an area of 603,628 km2. It borders Russia to the east and north-east, and shares borders with Belarus to the north; Poland, Slovakia, and Hungary to the west; Romania and Moldova to the south; and has a coastline along the Sea of Azov and the Black Sea.
Ukraine has a mostly temperate climate, except in the southern coast of Crimea which has a subtropical climate. The climate is influenced by moderately warm, humid air coming from the Atlantic Ocean.
Ukrainian customs are heavily influenced by Orthodox Christianity and traditions from Slavic mythology. Because of the country’s geographical location, Ukrainian culture has also been shaped by the cultures of both western Europe and Russia.
Ukraine has the world’s second-largest Eastern Orthodox population, after Russia. 82% of Ukrainians declare themselves Christians; out of which 72.7% are Orthodox, 8.8% Greek Rite Catholics, 2.3% Protestants and 0.9% Latin Rite Catholics and 2.3% other Christians. Other religions include Judaism, Islam and Hinduism (~0.2% each).
Majority of people in Ukraine speak Ukrainian, which is written with a form of the Cyrillic alphabet. The language is closely related to Russian but also has distinct similarities to the Polish language. Significant numbers of people in the country speak Polish, Yiddish, Rusyn, Belarusian, Romanian or Moldovan, Bulgarian, Crimean Turkish, or Hungarian. Russian is the most important minority language.
Ukraine HR at a Glance
Ukrainian Labour Law has inherited a significant number of concepts and approaches from the Soviet era. The key piece of legislation regulating employment matters has remained highly employee-focused.
Relations in the field of employment shall be governed by the Labour Code of Ukraine, the Law of Ukraine on General Compulsory State Social Insurance against Unemployment and other legislative Acts.
There are a number of government agencies responsible for supervising and controlling labour law compliance, including the Ministry of Social Policy of Ukraine, the State Labour Service and the Ministry of Health Protection.
An employment relationship is established in Ukraine by an employment agreement between an employer and an employee. The agreement contains the terms of employment, including the job title/position, description of work duties, obligation of the employer to ensure adequate and safe working conditions, and remuneration.
The Labour Code provides that employment agreements shall generally be concluded in writing.
Employment agreements are generally for an indefinite term. Even though Ukrainian labour law allows for fixed-term employment agreements, these should be only for work that is of a limited duration (i.e., possible to determine the last day of employment).
The law requires all official documents that certify a citizen’s identity and legal status to be issued in Ukrainian language. In practice, Ukrainian subsidiaries of multinational companies prepare and approve bilingual documents.
A written employment agreement or contract can be concluded before or on the date that the employer issues a hiring order, but it only becomes effective on the date of the hiring order. It must be signed by the employee.
The parties can amend the employment agreement or contract at any time. To make changes to the essential terms of employment (compensation, working hours, etc), the employer must issue an order notifying the employee of the changes at least two months in advance.
The employer must issue an internal hiring order to document the commencement of the employment relationship, stating the employee’s position and salary. The employer must also notify the State Fiscal Service of all hired employees.
In addition, the employer must enter the relevant record in an employee’s labour book. The labour book records the employment activity and must be kept by the employer for each employee working for more than five days.
The law states the documents that can be requested by an employer from a potential employee for each type of job (e.g., for teaching positions, criminal records can be verified). An employer is not allowed to request for information such as credit history or bank statements.
If a certain job has specific age or health requirements, the employer is authorised to request confirmation of these requirements from the potential employee.
Probation Period / Trial Period
The probation period cannot exceed one month for blue-collar employees or three months for other employees. The probationary period can be up to six months for some employees, e.g. state officials.
The duration of the probation period does not include the days when an employee does not work, irrespective of the reasons.
The terms of the probation period must be stated in the employment agreement. During this time, the employer can dismiss a non-performing employee by stating that the performance is not satisfactory.
A dismissal notice should be issued 3 days in advance to an employee on probation. However, an employee is not required to give any notice if they resign during the probation period.
The number of working hours for full-time employees cannot exceed 40 hours per week, or eight hours per day in a five-day working week. Employees are entitled to unpaid breaks after 4 hours of work, which must not last for more than 2 hours.
In the case of a six-day working week, the duration of the working day before the weekend cannot exceed five hours.
The general rule is that overtime is not allowed. The Labour Code provides a list of exceptions of when an employee may be required to work overtime.
Employees are not permitted to work for more than four hours of overtime in two consecutive days, and 120 hours of overtime in any one-year period.
Overtime must be paid at the rate of 200% of the regular hourly rate of the relevant employee. The law prohibits compensating overtime work with only additional vacation or leave of absence.
In addition to paying overtime wages, employers are required to pay additional wages to employees who are asked to perform duties that have not been specified in the employment agreement.
Certain categories of employees may not be engaged for overtime work (eg pregnant women, women with children of up to three years old, persons under 18 years old). Other special categories of employees can perform overtime work, only with their consent (eg women with children aged 3–14 years or with a disabled child).
Some categories of employees (eg executives, employees whose working hours are not possible to fix) may be engaged under variable working hours, under which there is no concept of overtime. Employees with variable working hours are entitled to up to seven days of additional paid annual leave.
All Ukrainian nationals are required to have a labour book, which are generally provided by the first employer of an employee. It is then the obligation of future employers to update the employee’s labour book.
There are no guidelines on the payment of bonuses, but it is common to reward employees with contractual or discretionary bonuses.
Parties may terminate employment only in the circumstances listed in the Labour Code. These include:
- termination upon agreement of the parties
- expiry of a fixed-term agreement
- at the employee’s will (with two weeks’ notice)
For grounds arising from the employer’s initiative, they include:
- employee’s failure/inability to fulfill employment duties
- insufficient qualifications
- deteriorating health conditions
- disciplinary violations
Ukrainian law prohibits dismissal of certain categories of employees, e.g. pregnant women, women with children under 3 (or under 6 for children with medical conditions), single mothers who have disabled children or children under 14.
The statutory minimum notice period is two months if the case involves redundancy. In certain cases, (e.g. where there has been a single gross violation of employment duties), notification is not required.
Employees can voluntarily terminate an employment agreement by giving 2 weeks’ notice.
Redundancy / Severance Pay
For all types of dismissal, an employer must pay an employee all payments due under the employment agreement (e.g. salary and compensation for any of the employee’s unused annual leave).
If an employee terminates an employment contract due to employer’s violation of the labour laws or employment agreement, the employee has a right to a severance payment of three month average wages.
In the case of redundancy, termination due to unsuitability of skills, employers must pay a severance of one month average wage. For termination of corporate officers, severance is six months average wages.
Voluntary severance payments are subject to negotiations between employer and employee.
Post-Termination Restraints / Restrictive Covenants
Non-compete clauses are not enforceable in Ukraine.
The parties can only sign fixed-term employment agreements under conditions allowed by the law, or if the employer has a reasonable justification for offering temporary employment.
If the employment relationship continues beyond the expiration of the effective term of a fixed-term contract, it will be deemed to be for an indefinite employment contract.
Any renewals of a fixed-term employment carry the risk that the temporary character of the employment will be challenged. Similarly, entering into a fixed-term employment contract without justification may result in it being re-classified into an indefinite one.
Tax and Social Security
Personal Income Tax
Employers are responsible for withholding personal income tax and military tax at source, unless the benefits are exempt (eg maternity leave compensation).
Both residents’ and non-residents’ salary, benefits, foreign income are taxable at 18%. Military income is taxed at 1.5%.
Employers bear the cost of social security contributions on top of the salary amount. They amount to 22% of the employee’s salary with a cap currently at UAH 62,595 or appr. EUR 2,200 per employee.
The base cannot be lower than the minimum statutory salary, and its maximum base is capped at 15 minimum statutory salaries.
The above rates serve as a broad guideline. Actual rates charged will differ.
Employees whose pay is calculated on an annual or monthly basis must be paid at least twice per month (the interval between payments must not exceed 16 days).
The payslip should contain information on vacation days, sick leave, business trips, overtime, work on weekends and holidays.
Employees are entitled to 24 days’ paid annual leave after six continuous months of service with an employer. If employment is under six months, employees can take pro-rated paid annual leave. Unused annual leave can be carried over to the next year.
For certain professions or industries, persons with disabilities, and young employees below 18 years of age, there are longer minimum paid annual holidays (from 28 to 56 calendar days).
Annual leave can be partially replaced, at the request of the employee by payment in lieu, only for the part exceeding 24 calendar days.
There are certain categories of employees where employers have to grant additional annual leave:
- third category of disabled persons – 26 calendar days
- first or second category of disabled persons – 30 calendar days
- minors – 31 calendar days
- educators – 56 calendar days
Employees who have irregular working hours shall be provided with additional annual leave of up to seven calendar days per year.
The total number of days of annual vacation (both basic and additional) cannot exceed 59 calendar days.
The first 5 days of each period of an employee’s sickness is paid for by the employer, and thereafter the compensation is covered by the Ukrainian State Social Security Fund.
The employee must submit a medical certificate only after his/her recovery. The sick leave allowance ranges from between 50% to 100% of an employee’s average salary depending on the length of their employment insurance record as follows:
- Up to 3 years – 50% of the average daily earnings
- 3-5 years – 60% of the average daily earnings
- 5-8 years – 70% of the average daily earnings
- >8 years -100% of the average daily earnings
Due to the COVID-19 pandemic, new provisions have been introduced to allow sick leave to be granted with the payment of 50% of the employee’s average daily earnings, regardless of length of employment insurance records (and 100% for medical workers), to employees who are required to self-isolate.
Maternity & Parental Leave
Women are entitled to 70 days of maternity leave prior to the expected delivery date and 56 days (70 days for complications or multiple deliveries) starting from the delivery date. Salary payment during maternity leave is based on a submitting to the employer a sick leave medical certificate. When calculating maternity pay, the employer will consider the employee’s average salary in the 12 months prior to the maternity leave.
Paternity Leave/Caregiver Leave
A father (or another adult family member of a single father/mother, such as a grandparent) is entitled to up to 14 calendar days of unpaid leave to take care of the child after birth.
A woman (or the child’s father, adoptive parent or guardian) is also entitled to unpaid leave until the child reaches the age of three (or six if the child needs home care).
An employee who has adopted a child is entitled to a one-time paid leave of 56 calendar days and 70 calendar days in the case of the adoption of two or more children, excluding holidays and non-working days.
Employees are entitled to an unpaid leave of 10 days for marriage purposes.
Employees shall be granted unpaid leave for a period of 30 days or less as mentioned in the medical support for the care of a sick relative by blood or marriage.
Employees are entitled to unpaid leave for a duration of 7 days in relation to the death of relatives by blood or marriage and 3 days for other relatives.
- Employees elected to the elected trade union bodies in the organization are entitled to 6 days of paid leave for the purposes of union training.
- Employees who take external exams (primary/secondary school, post graduate studies, or who are enrolled in evening vocational schools, are granted an additional paid leave of up to 35 calendar days.
The below are other unpaid leaves available for employees:
- Up to 14 calendar days for a mother (or single father) of two or more children under the age of 15 or of a disabled child,
- Up to 14 calendar days for war veterans and other individuals rewarded for special services to the country,
- Up to 21 calendar days for individuals rewarded for special labor services to the country,
There are nine official holidays in Ukraine.
Benefits to the Employee in Ukraine
Mandatory employee benefits in Ukraine are provided within the state social security system. These include pension, unemployment, death, short-term and long-term disability benefits (from occupational illnesses or personal accident) and survivor benefits.
Supplementary employee benefits in Ukraine include retirement, life insurance, medical insurance and personal accident insurance.
Visas and Foreign Workers
The State Employment Service is responsible for issuing working permits to foreign employees, and the State Migration Service is responsible for providing foreign employees with temporary residence certificates.
The majority of labour law provisions apply equally to Ukrainian and foreigners, and foreign employees enjoy the same benefits and protections available to Ukrainian employees.
A Ukrainian employer must obtain a working permit for each foreigner that it intends to hire. A foreigner may be employed by several Ukrainian employers simultaneously, and each employer must obtain a separate working permit for him/her.
A decision on the issuance of a working permit is granted by the respective employment centre within seven business days of the date of receipt of the required documents from the employer. The employer shall pay the fee for working permit issuance within 10 business days of obtaining the decision of the respective employment centre.
A working permit may be issued for a term of up to three years for:
- seconded employees
- special categories of foreign employees (e.g. shareholders or beneficiaries of Ukrainian legal entities, professionals, graduates of the world’s top-ranked universities, creative and IT professionals)
- intra-company transferees
For all other foreign employees, a (renewable) working permit may be issued for up to one year.
The employer shall enter into an employment agreement with the foreign employee within 90 calendar days of the issuance of the working permit and shall submit a certified copy of the employment agreement to the respective employment centre within 10 days of its execution.
Public Holidays in 2022
|1.||New Year’s Day||January 3rd|
|2.||Orthodox Christmas Day||January 7th|
|3.||International Women’s Day||March 8th|
|4.||Orthodox Easter||April 24th|
|5.||Labour Day||May 2nd|
|6.||Victory Day||May 9th|
|7.||Trinity Day||June 12th|
|8.||Constitution Day||June 28th|
|9.||Independence Day||August 24th|