The new amounts of the minimum wage and the minimum subsistence level in Ukraine in 2019

According to the Law of Ukraine “On the State Budget of Ukraine for 2019” (hereinafter referred to as “the Law on the State Budget”), as from January 1, 2019, the following amounts of minimum wage (hereinafter referred to as “the MW”) are established:

• the minimum monthly wage – UAH 4 173
• the minimum hourly wage – UAH 25.13.

The MW serves as the basis for calculating, in particular, the following indices:

• the maximum accrual basis for the Unified Social Tax (15 MW = UAH 62 595) and, accordingly,
• the minimum amount of the Unified Social Tax (UAH 918.06)
• the maximum amount of the daily allowance for business trips within Ukraine, which is not included in the taxable income of individuals without documentary confirmation (0.1 MW = UAH 417.30)
• the minimum amount of the authorised capital of joint-stock companies (1250 MW = UAH 5 216 250).

Also, because of the MW increase, fines for labour law violations also increased.

The largest fine of UAH 417 300 (equivalent to 100 MW) is prescribed for denial of access to conducting inspections related to detecting unregistered employees or payment of wages without accrual and payment of the Unified Social Tax.

In 2019, each detected unregistered employee will entail a fine of UAH 125 190 (i.e., 30 MW).

Failure to comply with the minimum state guarantees for labour remuneration or non-observance of statutory guarantees and benefits for employees fulfilling their military duties will entail a fine of UAH 41 730 (i.e., 10 MW) per employee.

The Law on the State Budget also established the amounts of the minimum subsistence level for able-bodied persons:

• as from January 1, 2019 – UAH 1 921
• as from July 1, 2019 – UAH 2 007
• as from December 1, 2019 – UAH 2 102.

The new amount of the minimum subsistence level influences, among other things, the following indices:

• Court fee rates (these are collected in the appropriate amount from the minimum subsistence level for able-bodied persons established by the law as of January 1 of the corresponding year)
• Wage indexation
• Fines for non-submission of the report on controlled transactions and/or documents on transfer pricing, or non-inclusion in such a report of information on all transactions conducted during the reporting period.

HOW CAN GOLAW HELP?

• Consulting on matters of labour law and employment
• Development of documentation on labour matters
• Audit of compliance of activities with the labour law requirements and adherence to labour safety standards
• Support during inspections conducted by regulatory authorities as regards compliance with labour law
• Appealing against the results of inspections conducted by regulatory authorities
• Protection of interests in labour disputes and conflicts