The Ultimate Guide to Employment Laws in Ukraine: Essential Compliance Tips for Employers

Ukraine, strategically located between Europe and Asia, offers an appealing environment for businesses seeking access to a skilled workforce at competitive wages. With ongoing economic reforms and an alignment of labor laws with European Union standards, Ukraine provides unique opportunities for employers. However, navigating Ukraine’s employment laws requires a deep understanding of regulations governing employment contracts, wages, working hours, employee rights, and social benefits. This guide offers a comprehensive overview of Ukrainian labor laws and highlights how WeHireGlobally’s Employer of Record (EOR) services can simplify hiring and compliance for international businesses.

Key Employment Regulations in Ukraine

Ukraine’s employment laws are primarily governed by the Labor Code of Ukraine, alongside other labor-related acts, establishing fundamental protections for employees and promoting fair labor practices. Here are some essential aspects that employers should be aware of:

1. Employment Contracts

Under Ukrainian law, a written employment contract is mandatory for all employees, detailing job title, description, compensation, working hours, holiday entitlements, and termination procedures. Employers may offer either indefinite or fixed-term contracts, though fixed-term contracts are generally reserved for specific roles, such as seasonal work or project-based employment. The Labor Code requires contracts to be in Ukrainian, with translations in the employee’s native language if necessary, ensuring clarity in employee rights and responsibilities.

2. Working Hours and Overtime

Ukraine adheres to a standard 40-hour workweek, usually divided into five 8-hour days. Overtime must be compensated at 1.5 times the regular hourly wage, with some sectors offering higher rates. Ukrainian law also allows flexible arrangements, such as remote work, which has become increasingly popular due to digital transformation and recent post-pandemic shifts.

3. Wages and Employee Benefits

The minimum wage in Ukraine, set annually by the government, is currently UAH 7,000 per month (around 195 USD). Many industries, including IT, finance, and engineering, pay significantly above this minimum. Employees are entitled to several benefits, including:

• Paid Annual Leave: A minimum of 24 days each year.
• Sick Leave: Compensated based on employment length.
• Public Holidays: Paid leave on national holidays like Independence Day and New Year’s.
• Parental Leave: Female employees receive 70 days of maternity leave before and after childbirth, and fathers can take up to 14 days of paternity leave.

4. Termination and Dismissal

Ukrainian law protects employees from unfair dismissal. Terminations must be justified, citing causes such as poor performance or redundancy, and often require written notice and severance pay. Severance depends on tenure, with a minimum of one month’s salary per year worked for cases of redundancy.

5. Health and Safety Standards

Ukrainian employers are legally required to maintain safe work environments, which include providing adequate training, safety equipment, and ensuring compliance with health and safety standards, especially in high-risk sectors such as construction and mining.

Social Security and Taxes in Ukraine

Ukraine’s social security system covers pensions, healthcare, and unemployment benefits. Employers remit social security contributions, totaling approximately 22% of an employee’s gross salary, while employees are taxed at a flat rate of 18% on income. Employers are responsible for withholding and submitting these contributions to the tax authorities.

Employer of Record (EOR) Services in Ukraine: Simplifying Compliance with WeHireGlobally

For businesses aiming to establish a Ukrainian workforce without forming a legal entity, WeHireGlobally offers a solution through its Employer of Record (EOR) services. Acting as the official employer, WeHireGlobally handles payroll, tax compliance, benefits, and other administrative responsibilities, allowing international companies to hire in Ukraine without extensive local requirements. Here’s how WeHireGlobally can streamline employment in Ukraine:

• Compliant Employment Contracts: WeHireGlobally ensures contracts meet Ukrainian legal standards.
• Payroll Management: WeHireGlobally handles payroll processing, tax withholdings, and social contributions.
• Tax and Benefits Administration: The EOR oversees tax filings and benefits, including health insurance, paid leave, and sick leave.
• Risk Mitigation: WeHireGlobally minimizes legal risks by ensuring full compliance with local labor laws.

For companies expanding into Ukraine or hiring remotely, the EOR model through WeHireGlobally offers a fast, cost-effective way to manage a Ukrainian workforce without establishing a legal presence in the country.

Conclusion

Ukraine’s labor laws aim to protect employees and promote a fair business environment. By understanding these regulations and leveraging the support of WeHireGlobally’s Employer of Record (EOR) services, international businesses can ensure smooth compliance with Ukrainian labor laws. An EOR helps companies expand their workforce, manage administrative tasks, and adhere to local regulations, allowing employers to focus on core business growth and operations in Ukraine.