A Q&A guide to employment and employee benefits law in Ukraine.
The Q&A gives a high level overview of the key practical issues including: employment status; background checks; permissions to work; contractual and implied terms of employment; minimum wages; restrictions on working time; illness and injury; rights of parents and carers; flexible working; data protection; discrimination and harassment; dismissals; resolution of disputes between an employee and employer; redundancies; taxation; employer and parent company liability; employee representation and consultation; consequence of business transfers; intellectual property; restraint of trade agreements, relocation of employees and proposals for reform.
To compare answers across multiple jurisdictions, visit the employment and employee benefits Country Q&A tool.
The Q&A is part of the global guide to employment and employee benefits law. For a full list of jurisdictional Q&As visit global.practicallaw.com/employment-guide.
Scope of employment regulation
1. Do the main laws that regulate the employment relationship apply to:
Laws applicable to foreign nationals
Ukrainian law applies to foreign nationals working in Ukraine, unless Ukrainian law or international treaties to which Ukraine is a party provide otherwise, or:
Laws applicable to nationals working abroad
Ukrainian law applies to Ukrainian nationals working abroad only if:
2. Does the law distinguish between different categories of worker? If so, what are the requirements to fall into each category, the material differences in entitlement to statutory employment rights and are there any maximum time periods for which each category of worker can be engaged?
Categories of worker
Ukrainian law does not distinguish between different categories of worker. All individuals that are engaged under an employment agreement qualify as employees. An employment agreement covers performance of work by an employee who observes internal work rules, in return for the employer's obligation to pay remuneration and ensure a required level of labour conditions.
Employees are governed by employment laws and independent contractors are governed by civil law. While there is no particular legal test used to differentiate employees from independent contractors, the distinguishing criteria typically include the following:
The nature of actual relations between the parties, rather than the way they are formalised, is a key factor in determining whether an individual is an employee or an independent contractor.
Entitlement to statutory employment rights
All employees are entitled to all available statutory employment rights. However, minor limitations may apply to temporary employees.
As a standard approach, employment agreements are for an indefinite period. The parties can only sign fixed-term employment agreements if the law allows this or if the employer has a reasonable justification for offering temporary employment.
3. Are any grants or incentives available for employing people? Does any information/paperwork need to be filed with the authorities or given to new employees when employing people?
Grants or incentives
There are no generally applicable grants or incentives for employing people. However, a refund of unified social contributions is available to employers who:
The refund covers up to 100% of the paid unified social contribution for relevant employees and is available for a maximum of 12 months.
When each new person is employed, employers must make a filing with the tax authorities, where they disclose the employee's basic personal data. In addition, every time a new person starts working, an employer must make a record of the employment start date in an employment record book belonging to the employee.
4. Are there any restrictions or prohibitions on carrying out background checks in relation to applicants?
The possibility of an employer carrying out background checks is limited due to the restrictions of data protection and privacy laws. Processing of personal data or information on personal life in relation to job applicants requires express consent to be processed. However, an employer can process an applicant's personal data (including sensitive data like criminal records) without the applicant's consent if it is necessary for the proper performance of statutory obligations. For example, the employer may be obliged to check information about an applicant's health to hire applicants for certain jobs.
Any individual's personal data must primarily originate from the individual or from the documents issued by the individual or in the individual's name. Third parties can typically transfer an individual's data to other persons (for example, a prospective employer) only with their knowledge and having received their consent.
The law expressly prohibits employers from asking applicants to provide any information about their political affiliation, nationality, origin, registered residential address or any documents that are not required by law.
Permission to work
5. What prior approvals do foreign nationals require to work in your country? What information/paperwork needs to be kept or filed with the authorities when they start work?
Procedure for obtaining approval. Foreign nationals who plan to work in Ukraine must apply for a long-term (D-type) visa, which is valid for 90 days. The long-term visa is necessary to obtain a temporary residence permit allowing them stay in Ukraine for the whole period of their employment. The visa is not required for nationals of several countries with a visa-free regime with Ukraine (including Belarus, the Russian Federation and others).
Visas can be obtained from Ukrainian foreign diplomatic missions or Ukraine's foreign visa application centres. On applying for a long-term visa, foreign nationals who plan to work in Ukraine must submit a copy of their relevant employment permit (or a copy of their employment agreement if the employment permit is not required).
Expiry and renewal
Cost. The regular visa fee is USD65. The fee is higher for expedited service and for applicants from certain countries according to any reciprocity or bilateral treaties to which Ukraine is party.
Time frame. The visa is issued within ten business days for regular service applicants and within five business days for expedited service applicants. There is no need to renew or apply for a new visa if a foreign national renews the employment permit and relevant temporary residence permit.
Sanctions. Employing a foreign national without a visa does not carry any sanctions for the employer. However, failure of a foreign national to obtain a visa can result in a fine for the individual up to UAH5,100 and the possibility of expulsion from the territory of Ukraine.
Procedure for obtaining approval. Foreign nationals require a work permit to work in Ukraine, which is issued by local departments of the State Employment Service of Ukraine. A work permit is not required for foreign employees who permanently reside in Ukraine, employees of representative offices of foreign companies, as well as certain other categories of foreign employees. Applying for a work permit is the responsibility of the employer.
The general validity term of a work permit is one year, however, it may have a longer validity period of up to three years for certain categories of foreign employees (highly-paid, creative, information technology professionals and others).
Cost. The current fee for issuing or extending a work permit ranges between UAH4,204 and UAH12,612, depending on the validity period of the permit.
Time frame. The regular term is seven business days for issuing a work permit and three business day for extending the permit.
Sanctions. Employing a foreign national without a work permit can result in a fine imposed on the employer of 20 minimum statutory salaries (currently UAH94,460) and an administrative fine imposed on a company's responsible officer in the amount of up to UAH17,000.
Procedure for obtaining approval. To legally stay in the territory of Ukraine for the period of employment, foreign nationals need a temporary residence permit, which is issued for the period of validity of the work permit or employment agreement. Individuals can apply to local immigration authorities for a temporary residence permit based on their passport document with a long-term visa and relevant work permit (or employment agreement if receiving a work permit is not necessary).
Cost. The fee for issuing or extending the permanent residency permit is UAH728.
Time frame. Temporary residence permits are issued or extended within 15 business days.
Sanctions. Employing a foreign national without a permit does not carry any sanctions for the employer. However, unless the foreign national has any other legal basis to stay in Ukraine, failure to secure the permit can result in a fine of up to UAH5,100, along with the possibility of expulsion from the territory of Ukraine.
Restrictions on managers and directors
6. Are there any restrictions on who can be a manager or company director?
There are no specific statutory age restrictions for managers or company directors, except for general minimum age restrictions (typically 16 years).
A foreign national cannot be a manager or director of a company if the obligations of the position require access to state secrets.
A person cannot be a manager or company director if prohibited from this function by a court. There are certain other restrictions for officers and directors of joint stock and certain other types of companies (for example, public servants, governmental or municipal officials, and individuals with unexpunged or unspent criminal records for economic offences). In addition, there are industry or sector-specific limitations, for example, on education, experience and reputation (including banks and financial institutions).
Regulation of the employment relationship
7. How is the employment relationship governed and regulated?
Written employment contract
Ukrainian law distinguishes between an employment agreement (which is used to formalise employment relations in most cases) and an employment contract (which is a more flexible form of employment agreement that can be used only in situations expressly provided by law). The rules differ on the minimum formal requirements that must be included in each of these types of document.
For employment under an employment agreement, signing a single document instrument is not mandatory to formalise the relevant employment relationship. Instead, an employer can issue an administrative order on employment of the relevant employee. The only explicit formal requirement is to specify a probation period, if any.
The law requires that an employer and an employee agree on the job to be performed by the employee, and certain other conditions. However, the law does not specify how to formalise these conditions, that is, whether they can be included in any employment-related document or communicated in another way.
If the parties sign an employment contract (where allowed by law), they must include in it provisions on:
Employment agreements (contracts) with employees for work in Ukraine must be in Ukrainian.
Statutory employment rights and guarantees are implied into the employment agreement (contract) irrespective of the way the employment relationship is formalised.
Collective agreements with trade unions or employee representatives are automatically binding on all company employers. Relevant social partners can sign national, territorial, or sector-specific agreements setting out terms for all employees working in a particular area or sector.
8. What are the main points to consider if an employer wants to unilaterally change the terms and conditions of employment?
Ukrainian law permits an employer to change the essential labour conditions of its employees (particularly, salary and work schedule) on organisational grounds (if it reorganises its work or production) and provided that employees continue working in the same professions, qualifications or positions. The employer must notify relevant employees of the future changes at least two months before implementation. The employee's consent is not required, however, the employee can object to the modified labour conditions (which may serve as a ground for termination).
Ukrainian law allows temporary transfer of employees to other positions for up to one month in the event of an emergency situation.
9. Is there a national (or regional) minimum wage?
There is a national minimum wage. Starting from 1 January 2020, a minimum wage is UAH4,723 a month and UAH28.31 an hour. Mandatory salary caps apply to certain positions in the public sector.
Restrictions on working time
10. Are there restrictions on working hours? Can an employee opt out on either an individual or collective basis?
The normal duration of employee working time cannot exceed 40 hours a week. A shorter working time will be established:
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. In the case of a six-day working week, the duration of daily work cannot exceed:
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.
Employees are entitled to rest breaks not exceeding two hours. A break is not included in working time. In general, a rest break will be provided four hours after the beginning of work.
For shift workers, the duration of breaks between work shifts cannot be less than double the duration of the worked shift (including lunch time). Employees cannot work two successive shifts.
11. Is there a minimum paid holiday entitlement?
Minimum paid holiday entitlement
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:
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.
There are eleven public holidays a year. Public holidays are paid and not included in the minimum annual holiday entitlement.
Illness and injury of employees
12. What rights do employees have to time off in the case of illness or injury? Are they entitled to sick pay during this time off? Who pays the sick pay and, if the employer, can it recover any of the cost from the government?
Entitlement to paid time off
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.
Entitlement to unpaid time off
Employees who need to complete a sanatorium resort treatment based on a medical certificate can request unpaid leave for the duration specified in the medical certificate.
Recovery of sick pay from the state
The sick leave allowance paid from the sixth day of sick leave is subject to recovery by the Social Security Fund of Ukraine.
Statutory rights of parents and carers
13. What are the statutory rights of employees who are:
Ukrainian law provides maternity leave for pregnant employees/employees who have given birth, of 126 calendar days (or 140 calendar days for multiple births or in case of a complicated confinement). Maternity leave is fully paid (100% of an employee's average salary) from the Social Security Fund of Ukraine.
Men whose wives are on maternity leave can take up to 14 days of paternity leave. This leave is unpaid.
Ukrainian law does not provide for any specific regulations on leave for a surrogate mother or parents under a surrogacy arrangement. Surrogate mothers have the right to regular maternity leave (see above, Maternity rights), while parents under a surrogacy arrangement have parental rights (see below, Paternity rights).
Ukrainian law grants paid maternity leave to persons adopting a newborn baby directly from a maternity hospital. This leave is for 56 days (70 days if two or more children are adopted). The leave is provided to one of the adoptive parents. Adoptive parents are also entitled to take parental leave under general conditions (see below, Paternity rights).
Employees have a right to parental leave to take care of a child beyond maternity leave. The maximum duration during which parental leave must be taken is three years after the birth of the child (meaning that the employee can take either all of that period before the child reaches the age of three or any part(s) of the period).
The parental leave is available to any of the following:
The leave is a shared and is a transferrable entitlement, that is, any of these persons can take the whole leave or any portion of it within the statutory leave duration (three years after the birth of the child). This leave is unpaid.
An employee can take sick leave to take care of a family member who needs personal care. The statutory sick leave entitlement equals three days per instance of disease, with the possibility to extend this in certain cases. Sick leave to take care of a family member is paid by statutory sick leave allowance.
In addition to sick leave entitlement, employees can request up to 30 days of unpaid leave per instance of illness of any family member that needs personal care.
Continuous periods of employment
14. Does a period of continuous employment create any statutory rights for employees? If an employee is transferred to a new entity, does that employee retain their period of continuous employment? If so, on what type of transfer?
Statutory rights created
Employees with a long period of continuous employment have precedence to remain at work in the face of economic dismissals. A statutory employee's right to basic paid annual leave in the first year of their employment depends on their period of service (typically an employee must be employed for at least six months to have a right to basic annual leave).
Consequences of a transfer of employee
Employees do not retain their period of continuous employment on transfer to a new entity.
Fixed term, part-time and agency workers
15. To what extent are temporary and agency workers entitled to the same rights and benefits as permanent employees? To what extent are part-time workers entitled to the same rights and benefits as full-time workers?
Parties can conclude a fixed-term employment agreement when it is not possible to establish labour relations for an indefinite period in view of:
If, on expiry of the effective term of a fixed-term agreement, an employment relationship exists in fact, and neither party requests termination, the agreement will be deemed extended for an indefinite period of time.
Any renewals continuing the initial fixed-term employment (whether extending the agreement or concluding consecutive agreements) carry the risk that a local court will challenge the temporary character of employment. Similarly, entering into a fixed-term employment agreement without justification for it may result in it being misclassified into an indefinite one.
Temporary workers have the same rights as permanent workers. However, as opposed to permanent workers, temporary workers can only request early termination of their employment agreement on their initiative if they have a specific reason to terminate it (for example, sickness or pregnancy).
Agency workers are entitled to the same rights and benefits as permanent employees of the agency company. Their time schedule and payment conditions must be not worse than the employees of the user company.
Part-time workers have the same rights and benefits as full time employees.
16. Is there a statutory right for employees to request to work flexibly?
Ukrainian law views a flexible work schedule as a working time arrangement, under which there can be both fixed and flexible working time during a day.
Normally, the time of starting and ending the working day and of a lunchbreak are flexible, while the main part of the working day is fixed.
An employee can request to work flexibly at any time, whether at the start of employment or in the course of employment irrespective of the period of service or any other criteria.
However, there is no statutory obligation for an employer to agree to such requests. The option to work flexibly and key terms and procedures relating to a flexible work schedule are usually contained in the internal labour rules of an individual employer.
17. Are there any requirements protecting employee privacy or personal data? If so, what are an employer's obligations?
Employees' data protection rights
Employees' rights under applicable data protection legislation include the right to:
Employers' data protection obligations
Employee consent is needed to process personal data because the scope for data processing that an employer can conduct under a statutory permit is limited. A special regime is provided for sensitive data, which includes data on membership of political parties and professional unions, criminal convictions, data related to health, sexual life, biometric or genetic data. Processing of sensitive data requires unequivocal consent to be processed, unless processing is necessary to perform an employer's obligations under the law (subject to appropriate protection measures).
Under the general proportionality requirements, personal data must be processed transparently in a way that corresponds to the purpose of the data processing. The composition and contents of personal data must be appropriate, adequate and non-excessive (that is, proportional) with regard to the established purpose for data processing.
Employers must notify employees about the content and composition of data collected, the purpose of data collection and the persons to whom the data is transferred.
Discrimination and harassment
18. What protection do employees have from discrimination or harassment, and on what grounds?
Protection from discrimination
Ukrainian law prohibits any discrimination in employment, in particular, breaching equal opportunities and direct or indirect restriction of employee rights based on:
Employees who face discrimination can seek for compensation of damages, including moral damages. This protection applies equally to all employees who face discrimination in any form, irrespective of length of their employment.
There is no any legally mandated sexual harassment training under Ukrainian law.
Protection from harassment
Harassment at work qualifies as a form of prohibited discrimination, with the same protections as for discrimination.
19. Do whistleblowers have any protection?
There is no any generally applicable protection for whistleblowers.
A special protection mechanism applies to persons who inform on alleged violations of Ukrainian anti-corruption laws. In particular, these persons or their close relatives can claim compensation of six average salaries instead of the normal remedy of job reinstatement, if their dismissal occurred due to reporting of the alleged violation by the whistleblower. In addition, anti-corruption laws prohibit employers form taking any negative measures against these employees or their close relatives due to reporting the alleged violation. Prohibited negative actions include dismissal, disciplinary actions, change of employment conditions, refusal of promotion, salary reduction nand so on.
Termination of employment
20. What rights do employees have when their employment or employment contract is terminated?
Notice periods vary depending on the reason for termination.
No notice period applies if 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 initiative of an employer are:
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 labour-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 payment of six months of average salary.
Procedural requirements for dismissal
The procedural requirements for dismissal vary depending on the reason for termination. No filings are required for dismissals, except for some cases of redundancy (see Redundancy/layoff). When dismissing employees who are trade union members, an employer will typically seek prior approval from the trade union.
An employer's failure to comply with the procedure for termination can result in:
21. What protection do employees have against dismissal? Are there any specific categories of protected employees?
Protection against dismissal
Employees can only be dismissed for the reasons and under the procedures set out in Ukrainian labour law. For a limited category of employees, certain additional reasons can be provided under their employment contract.
Protected employees include:
These employees are protected from dismissal on an employer's initiative on any grounds except for liquidation of the employer.
Resolution of disputes between an employee and employer
22. Is there a governmental or independent organisation to which employees can refer complaints in the event that there is a dispute between the employee and the employer?
There are several institutions to which employees can refer their complaints.
Employment disputes commissions
Companies that employ over 15 employees can create employment disputes commissions to consider disputes of their employees. The existence of an employment disputes commission within an employer does not preclude an employee form referring a dispute directly to a court. Both an employer and employee can challenge a decision of an employment dispute commission before a court.
In practice, creation of employment disputes commissions within local companies is rare these days.
Cost. Free of charge.
Courts of general jurisdiction
Courts of general jurisdiction are the main institutions to consider disputes between employers and employees. These courts consider claims for unlawful termination, recovery of wage arrears or other employment-related compensations, financial liability of employees, and any other disputes related to protection of the rights of an employee or an employer.
There are three instances of the general jurisdiction courts, which include local courts of first instance, courts of appeal and the Supreme Court. Employees can choose whether to file a court claim to a local court at the location of the employer or at the employee's registered place of residence. Employers must apply to courts at the registered place of residence of the employee. The up to date list of courts and their contact details are available at https://court.gov.ua/sudova-vlada/sudy/.
Cost. No fee applies in cases on recovery of wage arrears or on unlawful termination when an employee seeks for job reinstatement. In other cases, the fee for submitting a court claim ranges between UAH840.80 and UAH10,510, depending on the merits of the claim.
Trade unions. Although trade unions do not have a right to resolve employment disputes, they have certain possibilities in protecting their members. Trade unions are able to react to a violation of the labour rights, for example, by:
The State Labour Service of Ukraine. The State Labour Service of Ukraine is a governmental authority in charge of overseeing compliance of employers with labour laws. In has the power to monitor employers' compliance with labour laws and fine them for identified violations. An employee can initiate an employer's audit by filling a complaint with the Sesvice.
Contacts for the Labour Service central office are: 14 Desyatynna Street, Kyiv 01061; tel. +38 (044) 279 00 85; website address: http://dsp.gov.ua/.
23. How are redundancies/layoffs defined, and what rules apply on redundancies/layoffs? Are there special rules relating to collective redundancies?
Definition of redundancy/layoff
Redundancy implies either elimination of certain positions within a business, or reduction of a number of employees in certain positions. The reasons for redundancy must contemplate objective changes in the organisation of production and labour, for example, reorganising or restructuring the entity.
The procedure for making redundancies includes:
In addition, if there is a trade union organisation operating within a company, it must be consulted three months before dismissals and its approval sought for dismissal of each particular employee who is a member of the union.
Redundancy/lay off pay
In the case of redundancy, an employer must pay severance of at least one month's average salary of the dismissed employee. Collective agreements can provide for a higher amount of severance.
Redundancy qualifies as collective if:
Collective redundancy requires the state employment centre to be notified two months in advance.
Employee representation and consultation
24. Are employees entitled to management representation (such as on the board of directors) or to be consulted about issues that affect them? What does consultation require? Is employee consultation or consent required for major transactions (such as acquisitions, disposals or joint ventures)?
No management representation powers are provided to employees under Ukrainian law. Representatives from a trade union or other employee representative body that is a party to a collective bargaining agreement can be present (without voting rights) at meetings of managing bodies of joint stock companies and state-owned enterprises.
Employers have an obligation to co-ordinate with a trade union or other employee representative body on matters concerning forms and systems of payment for labour, as well as a company's internal work rules. Where a trade union operates within a company, it is also mandatory to consult with its representative about planned redundancies, as well co-ordinate with them on the following:
There is no obligation consult or obtain consent from employees for major transactions.
25. What remedies are available if an employer fails to comply with its consultation duties? Can employees take action to prevent any proposals going ahead?
Failure of an employer to comply with its consultation duties in cases of redundancies can result in reinstatement of dismissed employees and compensation for unearned wages and moral damages.
Trade unions can request that shareholders remove a company's chief executive officer where consultation duties have not been complied with. This request can only be challenged in court. Failure of an employer to comply with consultation duties might also serve as a reason to challenge the relevant employer's decisions.
Consequences of a business transfer
26. Is there any statutory protection of employees on a business transfer?
Automatic transfer of employees
Transferring the business entails automatic transfer of its employees.
Protection against dismissal
The mere fact of the business transfer may not serve as a reason for dismissal. However, there is no special protection against dismissals and an employer can dismiss employees using the redundancy procedure.
Harmonisation of employment terms
Harmonisation of employment terms for transferred and existing employees is possible subject to the applicable labour law restrictions (obtaining consent from the relevant employees, observing notice periods). However, any collective agreements that apply either to transferred or existing employees will remain unchanged for a year after the transfer, unless they expire earlier.
Employer and parent company liability
27. Are there any circumstances in which:
An employer is liable for damage caused by its employee in the course of performing the employee's duties. Subsequently, the employer that compensated for the damage can seek recourse against the employee under the applicable labour law procedures.
Parent company liability
Ukrainian law does not provide any instances in which a parent company can be liable for the acts of a subsidiary company's employees.
28. What rights do employees have on the insolvency of their employer? Is there a state fund which guarantees repayment of certain employment debts?
Employee rights on insolvency
Instituting insolvency proceedings does not automatically terminate or suspend employment relations. The administrator can initiate termination of employees according to general labour law procedures, particularly through redundancy. Almost all labour-related debts of an employer qualify as first rank debts.
State guarantee fund
There is no any state fund to guarantee repayment of employment debts.
Health and safety obligations
29. What are an employer's obligations regarding the health and safety of its employees?
An employer has a general responsibility to ensure safe and non-hazardous working conditions. An employer's health and safety obligations include:
Taxation of employment income
30. What is the basis of taxation of employment income for:
Foreign nationals working in Ukraine are subject to tax in Ukraine, irrespective of whether they qualify as residents or non-residents for tax purposes. Income tax applies to employment income paid by Ukrainian entities and representative offices of foreign entities in Ukraine.
Nationals working abroad
Employment income paid to Ukrainian nationals working abroad is subject to tax in Ukraine, provided that the Ukrainian national qualifies as Ukrainian resident for tax purposes. A Ukrainian resident is an individual who is physically present in Ukrainian territory for at least 183 calendar days in a consecutive 12-month period.
31. What is the rate of taxation on employment income? Are any social security contributions or similar taxes levied on employers and/or employees?
Rate of taxation on employment income
Salary and similar income is subject to:
Social security contributions
Salary and similar payments are also subject to unified social contributions (USC) at the rate of 22%. The USC base cannot be lower than the minimum statutory salary, and its maximum base is capped at 15 minimum statutory salaries.
32. Is it common to reward employees through contractual or discretionary bonuses? Are there restrictions or guidelines on what bonuses can be awarded, whether generally or in particular sectors?
It is quite common to reward employees through contractual or discretionary bonuses. There are no general restrictions or guidelines on payment of bonuses, however, certain rules or capped amounts can be provided for public sector employees.
Intellectual property (IP)
33. If employees create IP rights in the course of their employment, who owns the rights?
The employer and the relevant employee jointly own the proprietary rights created during work by a company's employees, unless otherwise provided by agreement between them.
Restraint of trade
34. Is it possible to restrict an employee's activities during employment and after termination? If so, in what circumstances can this be done? Must an employer continue to pay the former employee while they are subject to post-employment restrictive covenants?
Restriction of activities
There are no specific rules restricting an employee's activities during employment. As a general approach, limiting an employee's activities through an employment contract is questionable, unless an employer has a statutory reason to do so.
Post-employment restrictive covenants
There are no express rules on post-employment restrictive covenants and their application is arguable due to contradictions between them and the constitutional right to freedom of labour.
Relocation of employees
35. Can employers include mobility clauses in employment contracts, or take any other measures, to ensure that employees are obliged to relocate?
Mobility clauses in employment agreements are unenforceable because relocation of employees is only possible with their express consent. As an exception, temporary relocation for a period of up to a month is possible only in case of emergencies.
Once an employee agrees to relocate, an employer must cover any relevant travel expenses (for the employee and the employee's family), transportation expenses, a one-time relocation allowance (in the amount of one salary of an employee plus 25% of the employee's salary for each family member) and provide paid leave for the relocation period.
Proposals for reform
36. Are there any major proposals to reform employment law in your jurisdiction?
Ukraine anticipates major reform of its employment law through the adoption of a new Labour Code. A draft has been passed to parliament for consideration and voting. If adopted, the new Code will substantially reshape the current legal framework for employment relations in Ukraine.