An institution may appear in Ukraine to guarantee the payment of arrears of wages
2 May 14:16
The Verkhovna Rada of Ukraine has approved as a basis a draft law that would strengthen the protection of employees in the payment of wage arrears, including in the event of employer insolvency (No. 9510). This was reported in the parliament, Komersant ukrainskyi informs.
The provisions of the new draft law are intended to ensure that employees’ rights to timely and full payment of wages are respected.
What new benefits will the employee receive?
First, it is proposed to grant an employee the right to temporarily suspend work in case of a delay in payment of wages for more than 15 calendar days.
Secondly, it is proposed to pay compensation to the employee in the amount of three average monthly salaries for the twelve months preceding the month in which the employer’s bankruptcy case was initiated or the employment contract was terminated in the event of the employee’s dismissal.
At the same time, the period for which the salary compensation was paid will be taken into account when calculating the insurance period for the purpose of granting pensions and insurance benefits at the expense of social insurance funds.
The draft law expands the grounds for issuing court orders, in particular, if a claim is made not only to recover the wages owed, but also the amount of compensation for the loss of part of the wage accrued as of the date of payment and penalties for violation of the terms of payment.
What new obligations will be imposed on the employer?
In the event of a delay in payment of wages for more than 15 calendar days after the end of the month for which payment is made, the employer will be obliged to pay the employee a penalty in the amount and on the terms specified in the labor or collective agreement and to pay the entire amount of wage arrears and the amount of compensation.
How salary debts will be reimbursed
The adoption of the draft law should help create a mechanism for compensating wages in the event of an employer’s insolvency and protect the economic rights of employees of bankrupt and liquidated companies.
The document, in particular, establishes the legal basis for the creation of a guarantee institution that will be responsible for satisfying the monetary claims of employees in the event of an employer’s insolvency.
Iryna Borzova, MP from the Servant of the People faction , draws special attention to the provision of the new draft law that obliges the state to create a state institution, a guarantee fund, which will pay wage arrears to employees in the event of an employer’s bankruptcy.
“European countries have state funds that are accumulated either from the state budget or a percentage of the unified social tax, and thus employees have some protection from the state and receive funds,” explained Iryna Borzova.
According to her, wage arrears in Ukraine are chronic and can amount to UAH 3 to 5 billion.
As of August last year, according to the data published on the Opendatabot platform, 1,872 companies owed salaries to their employees.
As you know, the State Statistics Service has not published information on wage arrears in Ukraine since the beginning of the full-scale invasion of Russia.
