Changes to the Labor Code and the Law "On salary payments" from September 23, 2010 became effective in November 19, 2010.
According to the final provisions of the Article 115 of the Labor Code of Ukraine the terms of salary payment can be regulated not only by collective agreement, but also by own regulatory document of the employer, approved by the elective body of the labor union organization. The terms could be also approved by another body elected by the collective group that could consist of elected and authorized representatives of the work collective.
Moreover, the Law sets that the salary for the certain period shall not be paid later than within seven days from the date of the mentioned period end. As before, salary should be paid not less than 2 times a month and the time interval of salary payment should not exceed 16 days.
Meanwhile the salary amount for the first part of the month is set by the collective agreement or other approved regulatory document of employer, but it can’t be less than the payment for the actually worked time calculated on the basis of the employee remuneration rate.
If companies make salary payment once per month it is considered as violation of the labor legislation, even if employees applied themselves for salary payment once per month, as due to the laws of Ukraine it worsens working conditions of employees. In this case people, who are guilty in violation of labor legislation, bear responsibility in accordance with applicable laws, i.e. administrative responsibility (articles 41 and 412– penalty in the amount from 510 UAH till 1700 UAH) and criminal responsibility (article 175, 212 and 212-1).
Besides, it is quite possible that if the company makes salary payment once per month, during tax audit it can be treated as avoidance from the payment of taxes and other obligatory charges to the budget, and also other insurance payments to social and Pension fund of Ukraine. In this case punitive sanctions will be imposed.
Don’t hesitate to contact us if you have any questions regarding the above mentioned changes in Labor legislation.
Kiev accace team will be happy to provide you with further clarifications.