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Employing Foreign Nationals: How Do Things Stand with Their Rights?

27.08.2019

Leonid Gilevich, Counsel

Source: Yurydychna gazeta

The Constitution of Ukraine provides that the foreigners and stateless persons staying in Ukraine on legal grounds shall enjoy the same rights and freedoms and shall bear the same responsibilities as the citizens of Ukraine, except as established by the Constitution, the laws or international treaties of Ukraine.

A similar principle is reflected in the Law of Ukraine On the Employment of Population. According to Article 3 thereof the foreigners and stateless persons permanently residing in Ukraine, having been recognized in Ukraine as refugees, having been granted asylum in Ukraine, having been recognized as persons in need of additional protection, having been granted temporary protection, as well as persons having received a permission to immigrate to Ukraine, shall have the right to employment on the grounds and under procedure established for the citizens of Ukraine. At the same time, the foreigners and stateless persons who arrived in Ukraine for job placement for a fixed period of time shall be hired by the employers on the basis of a work permit for foreigners and stateless persons, issued in accordance with the procedure established by the Law of Ukraine On the Employment of Population, unless otherwise provided for by the international treaties of Ukraine.

The foreigners and stateless persons shall not be appointed to a position or engage in labor activities if the appointment to such position or engagement in such activities, according to the legislation, requires Ukrainian citizenship, unless otherwise provided for by the international treaties of Ukraine ratified by the Verkhovna Rada of Ukraine.

The aforementioned peculiarity of the employment of foreign nationals — on the basis of permit issued by a competent state authority in accordance with the procedure established by law — is consistent with the world practice, since the states are interested in the employment of their own citizens in the first place and are ready to admit to the national labor market only those foreigners that are really highly demanded in that specific period of time. In addition, the issue of the foreigners’ employment is closely related to migration risks, thus, the statutory procedure for obtaining a work permit is usually associated with acquiring the right to stay, temporarily or permanently, in the state of employment.

It should be mentioned that for the first time the procedure of employment of foreigners was regulated at the level of the law, but not the resolutions of the Cabinet of Ministers of Ukraine, back in 2017. It was then that the Law of Ukraine On Amendments to Certain Legislative Acts of Ukraine Concerning the Removal of Barriers to Attracting Foreign Investment No. 2058-VIII came into force. 10 years before that the issue of obtaining a work permit for foreigners was regulated by three different regulations, which gradually replaced each other. However, such an evolution of legislation is not always intended to simplify the procedure.

For instance, the most recent of such regulations — the Resolution of the Cabinet of Ministers of Ukraine “The Issues of Issuance, Extension and Revocation of the Work Permit for Foreigners and Stateless Persons” No. 437 — required the employer to provide “a document issued by a health care facility stating that a person does not suffer from chronic alcoholism, substance abuse, drug addiction or other infectious diseases, the list of which is determined by the Ministry of Health”. Such wording resulted in many employers facing with the fact that such a certificate was virtually impossible to obtain outside Ukraine, so the foreigner had no other choice but to come for the relevant examination to Ukraine. This meant an additional expense for the foreigner or his potential employer in a situation where obtaining a work permit and the employment itself was still in question.

The amendments introduced by the Law No. 2058-VIII significantly simplified the employment of foreigners in Ukraine and brought in a more differentiated approach to different categories of workers.

Work Permit for Foreigners

Ukrainian employers have the right to use the labor of foreigners and stateless persons (hereinafter referred to as the foreigners) in Ukraine on the basis of a permit issued by the territorial bodies of the State Employment Service (employment agencies). It is important that the work permit is issued to the employer, not the foreigner, and, therefore, such permit is issued for the foreigner’s employment with a specific employer in a particular position. The labor of foreigners can be used in various positions in one or several (two or more) employers, provided that permit is obtained for each of the positions in question.

The legislation of Ukraine does not provide for permit that would grant a foreigner a general right to work in Ukraine for a certain period of time at any employer and in any position (although such permits exist in many other states).

In order to obtain such work permit the employer submits to the territorial body of the State Employment Service the documents required by Article 42-2 of the Law of Ukraine On the Employment of Population. The list of such documents was significantly reduced in 2017. As a rule, it consists of the employer’s statement, copies of the pages of the foreign national’s passport, a color photograph of the foreigner, and a copy of the draft employment contract with such foreigner.

The application for permit is considered within 7 business days, and the application for extension of a permit or introduction of amendments therein – within 3 business days. It is important that the application for the permit extension shall be submitted by the employer no later than 20 calendar days before the actual expiration of such permit.

In most cases, the permit is issued for the duration of the employment contract, but not more than 1 year. For certain categories of foreigners such period can be extended to 3 years. In addition, special periods are set for the seconded foreign workers, as well as for the so-called “in-house assignees” (the corresponding status is defined in the Protocol on Ukraine’s accession to the World Trade Organization). The permit may be extended an unlimited number of times subject to the availability of relevant grounds for the above.

The legislation establishes a differentiated fee for the issuance or extension of the work permit. Depending on the period for which the permit is issued, this amount can vary from 2 to 6 minimum living wages for able-bodied persons established by law on January 1 of the calendar year in which the employer submitted the documents (as of the day it ranges from UAH 3 842 to UAH 11 526). The employer pays the fee within 10 business days from the date of receipt of a decision to issue or extend the permit.

The employer and the foreigner shall enter into an employment contract no later than within 90 calendar days from the date of issue of permit, and shall provide a copy of such contract certified by the employer to the body that issued the permit within 10 days after conclusion of such contract.

In cases set forth in Article 42-10 of the Law of Ukraine On the Employment of Population the employer is obliged to apply to the territorial body of the State Employment Service to cancel the permit. In particular, such an obligation exists in the event of termination of an employment contract with a foreigner. In addition, in many cases, it is that body that has the right to cancel the permit. For example, due to the employer’s failure to pay the fee for issuing or renewing the permit, the employer’s failure to timely provide a copy of the employment contract concluded with the foreigner, upon establishing the fact of using the foreigner’s labor on terms and conditions other than that determined by the permit or other employer, etc.

Certain categories of foreigners may be employed in Ukraine without such permit. Among them are foreigners permanently residing in Ukraine; those who have been given a refugee status or received a permission to immigrate to Ukraine; representatives of the foreign sea (river) fleet and airlines working for such companies in Ukraine; employees of foreign media accredited to work in Ukraine; employees of foreign missions registered in Ukraine; foreigners who arrived in Ukraine to participate in the implementation of international technical assistance projects, etc.

Special Categories

Starting from 2017 the Ukrainian legislation was amended by adding the concept of “special categories of foreigners and stateless persons applying for employment in Ukraine”. Such persons are foreign highly paid professionals (i.e. the foreigners or stateless persons whose wages are at least 50 minimum wages – as of the date UAH 208 650); founders and/or participants and/or beneficiaries (controllers) of a legal entity established in Ukraine; graduates of the world top hundred universities, in accordance with the list determined by the Cabinet of Ministers of Ukraine; foreign workers in creative professions; foreign IT professionals. For such categories it is possible to obtain a work permit for a longer period (up to 3 years), the requirements for the minimum wage of a foreigner do not apply, and the said foreign highly paid professionals have additional rights to work in secondary employment.

Minimum Wage

An employer can obtain permit if the employer is to pay a salary of at least 5 minimum wages (as of the date UAH 20 865) to the foreign employees hired by public associations, charitable organizations and educational institutions, as well as 10 minimum wages (as of the date UAH 41 730) for all other categories of employees. Minimum wage requirements do not apply if the permit is granted to employ special categories of foreigners.

Salary in a Foreign Currency

Before 2019 the Ukrainian legislation theoretically provided for the possibility of paying the salary to foreign workers in foreign currency (unlike Ukrainian citizens who could be paid in hryvnias only), however, in practice, due to inconsistency between a number of regulations, making such payment in a foreign currency was quite difficult. With the entry into force of the Law of Ukraine On Currency and Currency Transactions, the salaries to foreigners are to be paid in hryvnias only, however, (just as for Ukrainian citizens) the employment contract may set forth the amount of wage in foreign currency (which should be equivalently paid in hryvnias).

Salary Taxation

As a general rule, the salaries of foreigners working in Ukraine are taxed on the same basis and under the same procedure as the salaries of citizens of Ukraine.

Material Support and Social Services

The foreigners whose employers pay the unified social contribution (USC) are entitled to material support and social services provided by the Social Insurance Fund of Ukraine, including for the reason of temporary disability (“sick leave”). However, according to the State Fiscal Service of Ukraine, the foreigners working at representative offices of foreign companies shall not be subject to compulsory social insurance, and therefore are not entitled to receive material support and social services from the Social Insurance Fund of Ukraine.

Termination of Labor Relations

Although formally the labor legislation does not provide special grounds for the dismissal of foreigners, an employer who is required to obtain a work permit for the foreigner must be aware that a foreigner cannot work without such permit. Thus, in case the permit is cancelled or not renewed, the employer should be able to dismiss the foreigner. To this end, a fixed-term employment contract shall be concluded with foreigners, the term of which depends on the period of validity of the permit.

Stay in Ukraine

The work permit is the basis for obtaining by a foreigner of a residence permit, which allows him/her to stay and reside in Ukraine for the entire term of such permit. The relevant residence permit is issued by the territorial bodies of the State Migration Service of Ukraine. Unlike the work permit, the residence permit is received by the foreigner himself/herself, but not his/her employer, although employers provide foreigners with the assistance they need and usually organize the preparation of the required documents.

Other Rights

As for the rest the foreigners actually enjoy the same rights in relation to labor relations as the Ukrainian citizens do, in particular as regards the working hours, resting time, wage paying procedure, material liability, and other rights.

 
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