Starting from 1 January 2015 Ukrainian employers may face with significant sanctions for labor law violation. The Law of Ukraine # 77-VIII introduces a number of changes to the Labor Code of Ukraine including the introduction of new fines for labor law violation.
Financial Fines
Financial fines are the fines imposed on the company’s bank account. Moreover, these fines are imposed not only on legal entities but on private entrepreneurs as well.
Consequently, legal entities and physical persons employing workforce bear the following financial responsibilities:
1. Violation of the norms listed below may lead to financial fines in the amount of 30 minimum wages (UAH 36.540) per each employee:
- Admission of an employee to work without formalizing an employment agreement (contract)
- Employment of employee on a part-time basis while in fact, working a full time.
In addition, the payment of salary (remuneration) without proper accrual and payment of Unified Social Tax may lead to financial fine in the amount of 30 minimum wages (UAH 36.540) per each employee.
2. Fine in the amount of 10 minimum wages (UAH 12.180) is imposed for a failure to comply with the minimum state guarantees related to the payment of labor (for example, nonpayment for the work performed at night, work on weekends and on holidays, overtime work etc.)
3. Fine in the amount of 3 minimum wages (UAH 3.654) is imposed for the following violations:
- Violation of payment of salary to employees as well as payment of other types of remunerations prescribed by Ukrainian laws for more than 1 month;
- Payment of them not in a full amount.
4. Fine in the amount of 1 minimum salary (UAH 1.218) is imposed for other labor law violations.
Administrative Fines
This type of fines is imposed directly on officials that are guilty for labor law violations.
1. A fine in the amount of 500-100 non-taxable minimum incomes (UAH 8.500 – UAH 17.000) is imposed for the following violations:
- Admission of an employee to work without formalizing an employment agreement (contract);
- Addition of a foreign employee to work without a work permit.
2. A fine for the late payment of salary or other prescribed payments to employees constitutes 30-100 non-taxable incomes (UAH 510 – UAH 1.700).
Maryna Shuliak
Eurofast Global, Kyiv office
maryna.shuliak@eurofast.eu
www.eurofast.eu