Ukraine PEO & Employer of Record

WeHG provides an International PEO and global Employer of Record service in Ukraine to companies willing to join the Ukrainian market or recruit local/expat employees in this country.

Traditional approach requires establishing a subsidiary in Ukraine.  However our solution allows you to start the operations in Ukraine within days hence save time and money.  WeHG would hire candidates on your behalf while you maintain full operational control of their work. So legally they would be our employees, on our local payroll, 100% compliant but will work on your behalf. 

Ukraine fast facts

Population, million: 43,626,593
Land area: 603,628 km²
Capital: Kyiv
Local currency: Ukrainian hryvnia (UAH)

GDP per capita:$ 4,146.53 million
GDP in currency:$ 380.55 billion

Laws applicable to foreign nationals:

On the Legal Status of Foreigners and Stateless Persons

Indicate the legislative acts and other regulations that govern the relations between employer and employee:

• Labour Code, 
• Collective bargaining agreements, 
• Company internal regulations  
• Individual employment contracts

Employment & Labor Laws in Ukraine

Necessity of written employment contract

This is necessary.

Collective agreements

The collective agreement consists at the companies, in organizations, the organizations (further – the companies) irrespective of patterns of ownership and housekeeping which exercise wage labor and have the right of the legal entity.

The collective agreement can consist in structural sectionings of the company within competence of these sectionings.

The agreement consists at national, industry, territorial levels on the bilateral or tripartite basis:

• at the national level – the general agreement;
• at industry level – industry (cross-industry) agreements;
• at territorial level – territorial agreements.

The collective agreement consists between the employer on the one hand and one or several trade-union organs, and in case of lack of such organs employee representatives, the elite and representatives labor collective on the other hand.

The parties of collective agreements are the parties of the social dialogue which structure is determined according to the legislation on social dialogue.

The agreement at the regional level consists between local authorities of the government or regional associations of entrepreneurs if they have the corresponding powers, and associations of labor unions or other authorized labor collectives organs.

Different forms of engagement: employment, contracting, work with private entrepreneur

There are two main types – Employment (labour) agreement and civil agreement.

Ukraine Employment Contract

Types of employment agreements

Fixed-term agreements – any limitations, such as max duration or number of fixed-term agreements.

Ukraine working hours

9am-18pm, Monday to Friday. 8 hours per day, 40 hours per week.

Overtime

Up to 120 hours per calendar year. Paid at double rate, or additional days off for each day of overtime work. It is possible not to pay overtime if it is set in the employment agreement that an employee has flexible working time. 

Vacation leave in Ukraine

Employees are entitled to ten paid holidays per year (New Year’s Day, Christmas Day, International Womens Day, Orthodox Easter Day, Labor Day,  Victory Day, Trinity, Constitution Day, Independence Day, Defender of Ukraine Day).

Employees in Ukraine are entitled to a minimum of 24 days off per year.

Sick leaves

The duration of the sick leave is determined by a doctor, and can be for up to 4 consecutive months (after which the employment may be terminated). The employer pays the employee´s average salary (for the last 6 months) for the first 5 days of the sick leave, while afterwards the cost is borne by the state social security fund.

Ukraine Maternity Leave

A maternity period starts 70 days before the expected birth date and ends 8 weeks after delivery. For the period of maternity leave a working place is reserved for an employee.

Ukrainian Severance Laws

Severance payments

In case of an employee leaving the company on his own will or by mutual agreement the final dismissal payment consists of: 

• payment for unused (accrued) vacation days 
• final month salary

In case the employer terminates the employment the final payment consists of:

• payment for unused (accrued) vacation days
• 2 months salary (notice period)
• 1 month compensation (severance)

Procedural requirements for dismissal

Pursuant to the Labor Code, an employer may terminate a labor agreement only in a limited number of cases, including, but not limited to: 

• staff redundancy; 
• the employee´s systematic failure to fulfill his or her employment duties ( If there supporting documents); 
• the employee´s insufficient qualifications or deteriorating health condition( If there supporting documents); 
• the employee´s unjustified absence from the workplace for more than 3 consecutive hours during one working day(If there supporting documents); 
• and certain others. 

Ukraine Tax

In Ukraine, the Social Security Rate is a tax related with labor income charged to both companies and employees. Revenues from the Social Security Rate are an important source of income for the government of Ukraine because they help to pay for many social programs including welfare, health care and many other benefits.

Social security tax – 22 % from profit (net income), but not less than 22 % from minimal wage in Ukraine (i.e. in 2020 not less than UAH 1039.06 per month) and not more than 22% from 15 minimal wages in Ukraine (i.e. in 2020 not more than UAH 15,585.9).

Health Insurance Benefits in Ukraine

Because the public health system is considered to be of poor quality, private health insurance coverage is typically provided by employers in Ukraine.

Additional Benefits in Ukraine

Meal vouchers are an optional benefit in Ukraine.

General market practice benefits/additional allowances

At additional request Acumen can provide you with the additional services and equipment:

• Leased cars (we have agreements with international leased car providers)
• Office rent
• Computers
• Mobile 
• Secretarial support

Ukraine Holidays

Annual paid vacation is 24 calendar days by Labour Code per annum.
2 calendar days is accrued per 1 working month.
First vacation may be taken in 6 months after the start of employment.
One part of the holidays must be at least 14 calendar days.

An employee may accumulate vacation, but it is desirable that this amount does not exceed 48 days, as prohibited by the legislation of Ukraine, as an employee cannot work without vacation for more than 2 years. Employees may use their vacation at any time of the year, but it must be consistent with the management of the company and cannot interfere with its operations.

Public Holidays:

• New Years Day
• Christmas Day
• International Womens Day
• Orthodox Easter Day
• Labor Day
• Victory Day
• Trinity
• Constitution Day
• Independence Day
• Defender of Ukraine Day

Why Choose WeHireGlobally

WeHG takes care of all the onboarding hurdles, payroll, compensation and benefits, tax filing, and termination of employment. Our Employer of Record solution allows you to manage your overseas teams efficiently while minimizing cost and risk.