Ukraine is an Eastern-European country rich in history and culture, with beautiful natural landscapes and a population of warm, highly educated, and intelligent people.
Following the 2022 Russian invasion of Ukraine, many companies have turned their support towards the war-torn country by hiring remote workers from Ukraine. However, hiring remote workers in Ukraine can be difficult logistically without the right support in place.
Without existing operations in Ukraine, companies must work with an Employer of Record (EOR) to ensure they are fully compliant with Ukraine’s complex labor and tax laws.
In this article, we will go over the role and responsibilities of an Employer of Record, the benefits of working with an EOR when hiring workers in Ukraine, how to hire international workers through an EOR, and more.
The Benefits and Challenges of Hiring Remote Employees in Ukraine
Following the COVID-19 pandemic, many companies developed the infrastructure to employ remote workers, giving them access to a larger talent pool and the ability to hire employees in all corners of the world. Ukraine is particularly desirable for employers for a variety of reasons.
Here are just a few benefits of hiring remote Ukrainian workers:
- Ukrainians tend to be highly educated, and many Ukrainian nationals have specialized skills in areas like IT, engineering, and finance.
- Many Ukrainians are fluent in English and are known for having an incredibly strong work ethic
- Teamwork, loyalty, and a strong sense of responsibility are all qualities that many Ukrainians possess. Ukrainians are also known for having a friendly and easy-going nature
The downside to employing remote workers in Ukraine is that employers must navigate the country’s labor and tax laws and ensure they are compliant. This can be a significant obstacle for employers that don’t have an office in Ukraine.
An Employer of Record is a great solution to this common challenge.
What is An Employer of Record?
For any employers looking to hire remote workers in a country where they don’t have existing operations, an Employer of Record (EOR) will act as the legal employer for their international staff.
An EOR takes care of many administrative and human resource-related tasks, including:
- Managing payroll
- Issuing benefits
- Filing taxes and making appropriate deductions
- Drafting contracts
An EOR will also ensure your business is compliant with Ukrainian employment laws and regulations while you manage the day-to-day activities of your staff, such as:
- Managing communications
- Reviewing and overseeing their work
- Assigning tasks
- Hosting meetings
The Benefits of Working With an EOR in Ukraine
Working with an EOR enables companies to quickly expand their workforce in Ukraine without the administrative burdens that come with setting up an office in a new country. As a result, employers are able to rapidly respond to market demands or opportunities and fill job vacancies.
An EOR also helps you save a lot of time and money, as setting up operations abroad can be an incredibly expensive and time-consuming process.
Furthermore, Ukraine has complex and ever-changing employment laws, making it challenging for companies to stay up to date with all the legal requirements of employing staff in Ukraine. An EOR that has specialized knowledge when it comes to Ukraine employment laws and standard hiring practices will ensure that all necessary laws and regulations are met, reducing the risk of non-compliance.
Areas an Employer of Record Can Help With
Below, we explain in more detail an EOR’s main responsibilities when it comes to hiring and managing remote workers in Ukraine.
Drafting Contracts and Legal Documents
The EOR will be responsible for drafting employment contracts along with any other required legal documentation.
Payroll Management
An EOR will ensure your team gets paid on time while also calculating and processing employee wages, tax and social security contributions, and other payroll-related expenses.
In Ukraine, employee payroll deductions must be made for the following:
- Personal Income Tax (18%)
- Military tax (1.5%)
There is also a 22% employer payroll deduction that goes toward social security.
Issuing Benefits
An EOR will ensure your staff are receiving the benefits they are entitled to under Ukraine’s employment laws. This includes:
- Up to 126 days of paid maternity leave (70 days before the estimated due date and 56 days after the birth)
- Four months of paid sick leave (only five days are covered by the employer, with the rest paid out by social security)
- A minimum of 24 paid vacation days after completing six months of continuous employment
Borderless' EOR also provides medical, dental, life insurance, vision insurance, and retirement contributions.
Vacation and Public Holidays
In Ukraine, there are 12 public holidays that are considered non-working days.
This includes the following:
- January 1: New Year’s Day
- January 7: Christmas according to the Julian calendar
- March 8: International Women′s Day
- April 16: Velykden (Easter)
- May 1: Labor Day
- May 8 and 9: Victory Day over Nazism in World War II
- June 4: Trinity (Pentecost)
- June 28: Constitution Day of Ukraine
- July 28: Day of Ukrainian Statehood
- August 24: Independence Day of Ukraine
- October 14: Defender of Ukraine Day
- December 25: Christmas
It’s important to note that any time martial law is in place due to the ongoing war with Russia, the provisions of Ukraine’s labor code that cover holidays and non-working days do not apply.
What an EOR Doesn’t Help With
An EOR takes care of the administrative, legal and HR-related responsibilities required when managing a team of employees in Ukraine.
An EOR is not responsible for any of the following responsibilities:
- Managing or overseeing day-to-day operations
- Onboarding and training employees
- Managing employee communications
- Assigning projects
- Hosting team meetings
- Overseeing employee progress
As an employer, it’s your job to take care of the above responsibilities.
What to Look For in an EOR
When choosing an Employer of Record to take care of hiring and managing your staff in Ukraine, you should be considering the following factors:
Specialized Local Knowledge
Some Employers of Record operate in many different countries, so it’s important to make sure that the one you are considering working with has a team of legal experts specific to the country you are looking to hire from.
Your EOR should also have a deep understanding of the employment laws and regulations in Ukraine and be able to ensure compliance with all applicable tax regulations and labor laws.
Easy-to-Use Online Solutions
Look for an EOR with an online platform that is user-friendly while still being powerful enough to offer numerous functions.
Services That Meet All Your Needs
An EOR should offer a full suite of services that meet all of your specific needs. Ask lots of questions and make sure the EOR you work with is able to meet all of your requirements and is equipped to handle complex requests.
A Strong Customer Support Team
When it comes to retaining top talent, ensuring they are being paid on time and important administrative tasks are being handled is crucial. Because your EOR will be handling these responsibilities, having 24/7 customer support is essential in the event that any issues arise.
Steps For Hiring and Managing Employees Through an EOR in Ukraine
When working with an EOR, the process of hiring and managing workers in Ukraine involves the following steps:
- Determine the staffing needs of your business
- Begin your recruitment efforts
- Conduct interviews and check references
- Find a reliable Employer of Record
- Have your EOR draft employment contracts
- Onboard and train your Belgian employee(s)
- Your EOR will register the new employee with the Belgian authorities
- Your EOR will set up payroll and handle other HR tasks
- EOR will consistently make sure you are compliant with Belgian laws
- You focus on day-to-day operations and retention efforts
Why Borderless Should Be Your Top Choice When Seeking an Employer of Record
Working with an Employer of Record is a requirement for any business looking to hire workers in Ukraine without having an office there. However, not all EORs are equipped to handle your unique needs and requirements. Always look for an Employer of Record like Borderless that has experience hiring and managing workers in Ukraine and is well versed in the country’s complex laws and employment practices.
Borderless is an Employer of Record that is set up to help manage employees in over 150 countries, including Ukraine. Our platform is designed to help companies like yours grow their team and hire, pay, and manage Belgian workers while ensuring you are fully compliant with Ukraine’s tax and employment laws.
If your business is looking to hire workers in Ukraine and requires the services of an Employer of Record, contact our team at Borderless today to book a demo.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
