How can an employer receive compensation for employment of internally displaced persons
The Cabinet of Ministers of Ukraine adopted the Resolution No.331 dated 23 March 2022 "On Approval the Procedure for Providing the Employer with Compensation for Labour Costs for the Employment of Internally Displaced Persons due to Hostilities during Martial Law in Ukraine" (the "Procedure").
Who is an internally displaced person?
In the meaning of the Procedure, an internally displaced person is a person who:
- moved after the imposition of martial law on 24 February 2022 from the territory of hostilities defined in the list, approved by the Resolution of the Cabinet of Ministers of Ukraine No.204 dated 6 March 2022 "On Approval of the List of Administrative-Territorial Units Which Are Covered by Assistance Program for Insured Persons under "eSupport" Program"; and
- received a certificate of internally displaced person in accordance with the Procedure of processing and issuance of the certificate on registration of internally displaced person, approved by the Resolution of the Cabinet of Ministers of Ukraine No.509 dated 1 October 2014 "On the Registration of Internally Displaced Persons".
Amount and terms of compensation
The following cumulative conditions have to be satisfied to receive compensation:
- an employer is registered as a single social contribution payer, and have filed the tax report for the fourth quarter of 2021 or the annual report for 2021;
- the amount of the employee's salary for the fully fulfilled monthly (hourly) labour standard is not less than the minimum wage. Consequently, the monthly amount shall not be less than UAH 6,500, and the hourly amount shall not be less than UAH 39,26;
- such person is employed under a fixed-term or open-ended employment agreement (contract), gig contract, including secondary employment; and
- such person may be employed under the terms set out in the Procedure only once.
- The amount of compensation is UAH 6,500 per month for each employed person for whom a single social contribution is paid, and such amount will be paid during martial law and within 30 calendar days after its abolition or termination.
How to receive compensation?
In order to receive compensation, an employer has to submit an application to local employment service no earlier than 5 calendar days after formalizing the employment of an internally displaced person. The employer can submit the application in two ways.
1. In writing, or via the employment service's email
The application form is approved by the State Employment Center.
The following documents have to be submitted along with the application:
- a copy of an employment order;
- a document that confirms employment in accordance with terms of the Procedure (a copy of the employment agreement/gig contract);
- an employees' data (full name, tax identification number or passport series and number (for individuals who due to their religious beliefs refuse to obtain tax identification number, and have a respective mark in the passport); and
- a copy of a certificate of internally displaced person.
The relevant employment center has to pass the decision to provide compensation no later than five calendar days after receipt of the application.
2. Via the Diia Portal
An application has to be generated by means of the Diia Portal and submitted via the user's electronic account. The application should contain the information on the employer, its employees, the document that confirms employment, employer's current account.
Notification of employer on the results of data processing necessary to obtain reimbursement of costs is automatic. Information on the submitted applications will be entered in the Register of employers receiving compensation.
Transfer of Funds
The regional employment service transfers funds to an employer:
- for the first month of the employee's work – no later than five business days after passing a decision to provide compensation, or receiving information from the Register of employers receiving compensation via Diia Portal;
- for the second month of the employee's work – no later than five business days after receipt of the employer's notification confirming the continuation of employment (the employer has to send the notification via Diia Portal, or in writing to the employment service or via e-mail).
In case of employment termination, an employer have to return the unused amount of compensation to the local employment service account within five business days.
The employer has to return the difference between the amount of compensation (UAH 6,500) and the amount, calculated proportionally to the employee's actual labour hours during the month.
In order to check the accuracy of the provided information, and control the targeted use of funds, the employment service has the right to:
- conduct inspections at the employer's registered office, or at the employment center's office no later than 180 calendar days after the last payment of compensation; and
- receive necessary explanations from the employer on relevant issues, including in writing.
The employer is obliged to let the employees of the employment service in to conduct an inspection, and submit the relevant documents if the inspection takes place at the employment center's office.
The employer have to return to the Compulsory State Social Insurance Fund the funds received or used in violation of the Procedure, for instance, in case of submission of misleading documents and information provided for in the Procedure, misuse of the received funds or their use in violation of the Procedure.