Hire in Ukraine

Employer of record in Ukraine

If a lack of speed or local expertise are among your top concerns when expanding to or employing workers in Ukraine, an employer of record may be the best option for achieving your global growth objectives.

An employer of record, sometimes known as an international PEO, enables you to quickly hire and onboard workers in Ukraine ―often in as little as two weeks―without having to take on the cost and risk of establishing a local entity.

Learn about the hiring, employment, payroll and benefits requirements for workers in Ukraine and how our employer of record service, EOR, and local HR experts can help you manage your international employment needs.

Hiring in Ukraine

The principal law governing employment is the Labor Code of Ukraine, adopted in 1971. Although the Labor Code and other labor laws have been amended numerous times, they still include many Soviet concepts and other contradictions, inconsistencies, and gaps that can make their proper implementation difficult.

A general feature of Ukrainian labor law is its pro-employee orientation. Parties to the employment agreement cannot waive any employee-protective provisions stipulated by the law even if the employer and the employee provide consent to such an amendment.

Employment contracts in Ukraine

As you look to hire employees in Ukraine, here are some standard regulations you’ll need to know to create a compliant contract, as well as how an employer of record and PEO can provide support for your unique HR needs.

Working hours

The Labor Code stipulates a 40-hour workweek, generally for five days. The law does not mention the workday period, as this is usually left to the employer’s discretion or negotiation between the employer and its major trade union organizations. The Labor Code permits six-day workweeks which entails an average workday of seven hours considering a 40-hour workweek.

Employees work either a five-day week (with two mandatory days off) or a six-day week (with one mandatory day off).

Sunday is generally recognized as the common day off. However, for employees working five-day weeks another regular day off can be established if the business requires it, normally Saturday or Monday.

Employees are entitled to an unpaid workday break of up to two hours and a weekly rest break of at least 42 hours.

The Labor Code mentions two main methods for paying overtime:

• Piece-rate, where the employees’ remuneration is based on performance as measured against a set standard
• Time-based, where employees’ remuneration depends on the amount of additional time an employee engages in work.

In a piece-rate system, each hour of overtime must be paid at 100% above the standard hourly rate for the relevant work. In a time-based system, overtime must be compensated at double the hourly rate.

The maximum overtime permitted by the Labor Code is four hours for every two consecutive days of work up to 120 hours per year.

Compensation

As you consider the appropriate salary to offer new employees, keep in mind:

• Effective January 1, 2024, the minimum wage is 7,100 Ukrainian hryvnias per month and 42.60 hryvnias per hour.
• Effective April 1, 2024, the monthly minimum wage will be 8,000 hryvnias per month and 48 hryvnias per hour.
• Night work, (between 10 p.m. and 6 a.m.), must be compensated at a higher rate than work performed within regular hours (i.e., between 6 a.m. and 10 p.m.). Actual compensation should be determined by the general industry rate or a collective bargaining agreement and cannot be less than 20% above the standard hourly rate.
• Under the Labor Code, an employee is entitled to double time for work on holidays and days off and compensation for business trips, relocation, and other work-related travel. Pay cannot be docked for an innocent failure to meet production targets (as agreed to by the parties according to existing industry standards).
• Compensatory time off in lieu of payment for overtime is prohibited by law.
• Employees must be paid at least twice a month at intervals of no longer than 16 days.

As your employer of record in Ukraine, we can provide you with resources and insights about employee compensation, so you are better equipped to make a competitive employment offer.

Bonuses

Bonuses are at the discretion of the employer.

Rules for a bonus scheme may be established in individual employment agreements, collective bargaining agreements, internal orders of the employer, or other employer/employee agreements.

Probationary period

A probationary period may not exceed three months. However, if the primary trade union organization agrees, the probationary period may last up to six months in certain cases (e.g., for some public officers).

Termination and severance

Under Ukrainian law, it is generally difficult to terminate an employee without the employee’s consent.

Employees may terminate their employment by providing two weeks’ written notice. The two-week notice period may be shortened if an employee cannot continue to work for justifiable reasons (e.g., retirement, university enrollment, change of residence).

An employer may terminate employment anytime during the probationary period if an employee is found unsuitable for the position.

On termination of employment, all wages and compensation for all unused annual leave due to the employee must be fully paid on the last day of employment. When an employee is terminated with changes related to the organization (e.g., liquidation, reorganization, staff redundancy, change of job requirements), the employee is also entitled to a severance payment, which cannot be less than the worker’s average monthly wages.

Employee benefits and paid leave in Ukraine

When negotiating terms of an employment contract with a candidate in Ukraine, here are some of the statutory benefits and paid leave requirements to remember, as well as how an employer of record can support your company’s benefits strategy.

Maternity leave

Female employees are entitled to 70 calendar days of paid prenatal leave and 56 calendar days of paid post-delivery and child care leave (70 days in cases of multiple births or post-delivery complications).

The State Social Insurance Fund pays for maternity leave at 100% of the parent’s average monthly salary for six months.

Vacation

Employees are entitled to 24 calendar days of paid annual leave after working for an employer for six consecutive months. Before the expiration of these six months, employees can take paid annual leave on a pro-rata basis for the time they have been employed.

The full period of paid annual leave must be granted before the expiration of the initial six months of employment to certain employees upon their request (e.g., pregnant women, women with two or more children under the age of 15, or a disabled child, disabled persons and persons under the age of 18).

Paid annual leave is extended for some categories of employees. Employees under the age of 18 are entitled to 31 calendar days of annual leave, for example, and employees involved in hazardous work (e.g., mining) or those who have special working conditions (e.g., irregular schedules) are entitled to additional annual paid leave of up to 35 days.

Holidays

Employees are entitled to the following paid public holidays:

• New Year’s Day
• Orthodox Christmas Day
• International Women’s Day
• Orthodox Easter Sunday
• Trinity Sunday
• Labor Day (two days)
• Day of Remembrance and Victory
• World War II Victory Day
• Orthodox Trinity Sunday
• Ukrainian Constitution Day
• Ukrainian Statehood Day
• Independence Day
• Ukraine Defender’s Day
• Christmas

Holidays that fall on weekends (or other days off) shift to the next business day. Working days before a public holiday are reduced by an hour.

Sick leave

Employees unable to work due to sickness or other temporary disability are entitled to compensation for their entire absence from work. A registered medical practitioner must certify sickness or other temporary disability and its expected duration. However, after four consecutive months, an employee may be terminated.

The employer pays for the first five days of sick leave and the State Temporary Disability Fund for the remaining time. The amount of compensation depends on the length of the worker’s employment:

• 60% of the average salary for employees with up to five years of continuous employment,
• 80% for employees with five to eight years of continuous employment and
• 100% for employees with more than eight years.

Certain employees (e.g., persons affected by the Chernobyl nuclear accident) are entitled to receive 100% of their average salary as compensation for sick leave regardless of their length of employment.

Health coverage

Employees may retire with a full pension at age 60 with at least 15 years’ coverage. Partial pensions are available for employees who meet the age requirements and have 15 to 34 (men) or 15 to 29 (women) years of coverage.

Effective January 1, 2018, employees may retire with a full pension at age 60 if they have at least 25 years’ coverage. The required length of service will grow annually by 12 months and reach 35 years in 2028. Employees with 15-25 years of pensionable service by January 1, 2018, may retire at 63. From 2028, pensions at the age of 65 will be awarded to persons with 15-25 years of pensionable service.

Employers must make a single monthly contribution of 22% of payroll to the unified social insurance fund covering pension, temporary disability, unemployment and accident benefits. Employees do not contribute.

Additional benefits

In addition to healthcare benefits, employees in Ukraine are entitled to pension, which is funded by government tax revenues, as well as workers compensation, which is covered through mandated employer insurance. Employer social costs will cover a large portion of employee benefits in Ukraine, but we can consult with you about supplemental coverage options, such as additional pension contributions or life insurance if needed.

Updated: March 28, 2024

Employee onboarding with an employer of record in Ukraine

We write and validate all local employment contracts, streamlining the onboarding process for you and your Ukrainian employees—all you have to do is provide relevant information and review and approve the employment agreement. As your employer of record in Ukraine, we will:

• Schedule a welcome call to discuss HR and employment information for Ukraine, as well as answer any questions
• Prepare a customized employment contract in English or other local language
• Share the employment contract and benefits information with the new employee for signature and review
• Gather tax and banking information from the employee to set up payroll
• Provide a local point of contact to the employee to answer any questions regarding their employment, local HR or payroll

The entire onboarding process for the employee is often completed in as little as two weeks.

Partner with Safeguard Global as your Ukraine employer of record and PEO

With over a decade of service, we are the longest-serving employer of record and PEO provider in the international market. Organizations around the world rely on EOR, our employer of record solution, to expand and hire in 170+ countries around the world, quickly and compliantly.

We’ve seen just about every global employment circumstance imaginable—and with our extensive knowledge of local law and culture, we know what it takes to get employment right in Ukraine. We provide written contracts in the local language, salaries in the local currency and HR support in your employees’ time zone.

Additionally, as a global payroll provider we support payroll administration—including payments, filings and other calculations— all around the world and can accommodate the payroll outsourcing needs of any size organization.

Whether you’re looking to hire as part of a strategic expansion or to meet specific talent needs, our global solutions advisors can walk you through your international hiring options so you can make the right choice for your organization. Contact us today.

Disclaimer

The information provided on or through this website is for informational purposes only and does not constitute legal advice. Safeguard Global expressly disclaims any liability with respect to warranty or representation concerning the information contained herein, including the lost essence, interpretation, accuracy and/or completeness of the information in transit and language translation.