Minimum Wage
The Constitution of Ukraine guarantees everyone the right to get at least the minimum wage as determined by law. The minimum wage in Ukraine is determined at the national level. Minimum wage is revised by the Law of Ukraine on State Budget. Minimum wage is calculated as hourly and monthly wage. Wage is set a higher level for heavy work in harmful and hazardous working conditions, work is special geographical regions and geological conditions, and work with health risks. The list of such works is determined by the Cabinet of Ministers.
The minimum wage is the legally established lower bound of salary for the monthly (hourly) amount of work performed by the employee. It can’t be less than living wage for employable persons. If an employee who has completed the monthly (hourly) amount of work is paid a salary lower than the minimum wage, the organization makes an additional payment up to its level.
Employers who failing to pay the stipulated minimum wage rate are liable to an administrative fine of between 30-100 times non-taxable minimum incomes. Violation of the legislation on payment of labor is punishable by an administrative fine in the amount of 30 to 100 tax-free minimum incomes of citizens. Repeated violation within a year or in relation to a minor, a pregnant woman, a single father, mother or a person who replaces them and is raising a child under 14 years of age or a child with a disability entails a fine of 100 to 300 tax-free minimum incomes of citizens.
If this violation continues for more than one month (committed intentionally) it will be considered a criminal offense and punishable by a fine of 500 to 1,000 non-taxable minimum incomes, or correctional work for up to 2 years, or probation supervision for the same period, with the deprivation of the right to occupy certain positions or engage in certain activities for up to 3 years. The employee has the right to complain to the Labor Inspection or to sue.
Sources: §43 of the Constitution of Ukraine; §95 and 100 of the Labor Code; §3, 9-14 of the Law of Ukraine ‘About remuneration’ 24.03.1995 № 108/95-ВР; §41 of the Code on Administrative Penalties; §175 of the Criminal Code
For updated minimum wage rates, please refer to the section on minimum wage.
Regular Pay
Wage is the remuneration, calculated usually in monetary terms, which the owner or the authorized body is required to pay the employee for work performed. Wages depend on difficulty of labour and working conditions, professional skills, results of working and economic activity of the organization. While the minimum wage is determined under the law, there is no maximum sum of wages. According to the Ukrainian Labour Code, wages are subject to indexation taking into account inflation rate.
Wages must be paid at least twice a month (once every half month) on a day established by collective agreement or employer’s act, as agreed with trade union. More specifically, wages must be paid once in every 16 calendar days however not later than 7 days after the end of the period for which payment is made. Payment of wages can be made through bank transfer if worker has given written consent for that.
Wages for working by an employment contract with an irregular work schedule are paid for the time when the employee has actually worked.
If payment day coincides with a non-working day, wages shall be paid on the day before. Wages must be paid in legal tender, i.e., Ukrainian hryvnia. Payment of wages in the form of debt commitments and receipts or in any other form is prohibited. A collective agreement, by way of exception, may stipulate payment of certain part of wages in kind (according to the price not exceeding production cost of the product being given as in-kind payment) in an amount not exceeding 30 per cent of the monthly wage. These payments are equivalent to payments in a monetary form, and must be normal and desirable from employees’ point of view. The Cabinet of Ministers of Ukraine approves the list of the commodities that may not be used for in-kind payments.
Legislation prohibits limiting the rights of workers to freely dispose of their wages. Deductions from wages to make direct or indirect payments to employer or some other intermediary to get employment or keep a job are prohibited. Deductions from wages can be made only in cases as provided under the law. The total amount of all deductions on each wage period must not exceed 20 per cent, and in the cases stipulated by laws, - 50 per cent of the wages. The size of deductions from wages may not exceed 70 percent in cases of correctional work and alimony for minor children. It is not allowed to make deductions from severance pay, compensation and other payments by law. On payment of wages, employer must also inform the employees about gross wages, total size and ground of deductions and the net amount of wages to be paid.
Wages are paid on an hourly or piece rate basis, or other remuneration systems as specified under the law. Payment can be made as a result of individual and collective work. Employers are under obligation to pay timely and full wages, otherwise they are liable. Individuals violating legislation concerning the payment of wages face liability. Employers who failing to pay the stipulated minimum wage rate are liable to a fine of between 30-100 times non-taxable minimum incomes. Repeated violation within a year or in relation to a minor, a pregnant woman, a single father, mother or a person who replaces them and is raising a child under 14 years of age or a child with a disability entails a fine of 100 to 300 tax-free minimum incomes of citizens.
If this violation continues for more than one month (committed intentionally) it will be considered a criminal offense and punishable by a fine of 500 to 1,000 non-taxable minimum incomes, or correctional work for up to 2 years, or probation supervision for the same period, with the deprivation of the right to occupy certain positions or engage in certain activities for up to 3 years. The employee has the right to complain to the Labor Inspection or to sue.
In Ukrainian legislation, there is no mandatory provision regarding the payment of 13th or 14th salaries or other obligatory bonuses. These payments are considered additional incentive rewards that the employer may establish at their discretion.
According to the Labor Code of Ukraine, enterprises, institutions, and organizations, within their powers and at their own expense, may establish additional labor and social benefits for employees beyond those prescribed by law.
The conditions for introducing and the amounts of allowances, supplements, bonuses, rewards, and other incentive, compensatory, and guaranteed payments are determined by enterprises, institutions, and organizations independently in a collective agreement, subject to the norms and guarantees provided by legislation, as well as by general and sectoral (regional) agreements.
Sources: §9, 94, 97, 110 and 115 of the Labour Code; §23, 26, 33, 36 of the Law of Ukraine ‘About remuneration’ 24.03.1995 № 108/95-ВР; §41 of the Code on Administrative Penalties; § 175 of the Criminal Code
