Changes in the salary payment procedure
Changes to labor legislation concerning companies which:
- make salary payments once a month; or
- make salary payments twice a month (make an advance payment first, and then pay any remaining salary), where the advance payment constitutes less than 50% of the employee’s monthly contracted salary, came into effect on 19 November 2010.
The above changes were made in accordance with Law of Ukraine 2559-VI, of 23 September 2010, “On making changes to certain legislative acts of Ukraine concerning the terms for the payment of salary.” According to the law, companies are required to pay salary taking into account the following:
- Salary payments must be made no less than twice a month, and the period between the payments should not exceed 16 calendar days.
- Any outstanding salary must be paid within 7 days of the end of the month, for which the payment is being made.
Thus, following an advance payment of salary, the remainder must be paid within 16 calendar days. At the same time, any salary in arrears must be settled within seven days of the end of the month.
According to current legislation, if a company fails to pay salary on time or in full, it is liable to pay a penalty of between UAH 510 and UAH 1,700 (i.e., 30-100 tax-free allowances, respectively).
Employees of the Ministry of Labor will ensure that employers fulfill the requirements of labor legislation. They are entitled to carry out an inspection on an employer at any time, without providing prior notice, provided that they present a valid identification document.