Hiring Talent And Managing Payroll In Ukraine

Agreements

• The Ukrainian Labor Laws distinguish between an employment agreement and an employment contract. While employment agreements are widely used, employment contracts are used in particular cases.
• Employment contracts are more flexible and can have additional provisions. It must be well-written with all the necessary employment information. Conditions like termination, duty, employment length, and rights should be mentioned.
• Ukraine has two types of contracts: definite or fixed and indefinite or open-ended.
• Indefinite or open-ended contract - A contract with no fixed end date is called an indefinite contract. It is mutually agreed upon and can be terminated by both parties. An employee can terminate the contract without stating a specific reason. The employer has to say a valid reason for termination.
• Definite or fixed-term contract - A contract that ends on a fixed date is called a fixed-term contract. It is agreed upon for a certain type of work and a fixed time. There is no minimum or maximum duration for a fixed contract in Ukraine.
• However, there are certain rules for the renewal of a fixed contract. If a fixed contract is renewed more than once, it will be treated as an indefinite contract.

Onboarding Process

• The company will collaborate with its HR team if there is a job vacancy. A job description is prepared, which has details about the job.
• Once the appropriate description is prepared, it is uploaded on the company's official sites and other platforms.
• The employer may choose to publish the vacancy in local newspapers and magazines.
• Candidates submit their applications by verifying their eligibility criteria.
• The HR team shortlists candidates on the given criteria and rounds of assessments.
• Final shortlisted candidates can negotiate with the employer regarding the job. Once both parties agree, the candidate is hired as an employee.

Minimum Wage

Payroll Cycle

Annual Bonus

Health Benefits

• The employer is responsible for maintaining the health and safety of its employees.
• An employee must declare health issues, if any.

Working hours and overtime

• Work hours: Work hours in Ukraine are of 40 hours a week. It usually expands over 8 hours of work in 5 days. If workdays extend to 6 days a week, the working hours reduce to 7 hours per day.
• Break: An employee is entitled to an unpaid break every day. The break time must not exceed 2 hours. Every company has a different time for a break.
• Overtime: Overtime is not allowed in Ukraine. The employer can not request any employee to work overtime. In some cases, however, an employee may work overtime. In this case, the employee is entitled to get double pay

Social Security

• Social Security in Ukraine covers maternity, paternity, sick, and disability leaves.
• An employer has to contribute 22% to the social security fund.

Taxes for Employees

• Every employee is obliged to pay an income tax in Ukraine. A flat-rate income tax of 18% is levied on an employee.
• A military tax of 1.5% is levied on an employee. It is a mandatory tax in Ukraine.
• An employee does not have to contribute to the Social Security Fund.

Termination

• Termination of employment in Ukraine is a complex process. The employer has to state a valid reason for termination.
• An employee does not need to state the reason for resigning.

Severance Pay

• An employee is entitled to one month's salary as severance pay in case of termination.
• A corporate officer gets 3 to 6 months' salary on termination.
• The employee does not get any severance pay on resignation.

Employees or Contractors

• A person who works for a company and gets paid is called an employee.
• An organization or company that hires employees is the employer.
• There are two types of recognized employment in Ukraine - employees and self-employed.
• A penalty is imposed if an employer is found guilty of an employee's misclassification.
• The employer has to pay all legal benefits to such a misclassified employee.
• The employer has to pay all taxes and other contributions on behalf of the employee.

Final Words