Overview of the updated rules for employees' reservation for businesses and non-governmental organisatiоns
Overview of the updated rules for employees' reservation for businesses and non-governmental organisations
The Cabinet of Ministers of Ukraine (hereinafter referred to as the "CMU") adopted Resolution No. 1332 on November 22, 2024. This resolution modifies the procedures for obtaining of critical status by enterprises, institutions, and organisations and reservation of employees. The EVERLEGAL team has compiled a comprehensive overview of these changes concerning businesses and non-governmental organisations.
Amendments to the criteria for obtaining of critical status
As before, under the general rule, for the purpose of obtaining critical status enterprises, institutions, and organisations must confirm their compliance with three or more criteria specified in paragraph 2 of the Criteria and Procedure for determining enterprises, institutions, and organisations that are critically essential for the functioning of the economy and ensuring the livelihood of the population during a special period, as well as critically essential (hereinafter referred to as the "Criteria").
However, compliance with the following two criteria has now been rendered mandatory for enterprises, institutions, and organisations:
- there are no debts on payment of taxes and single social contribution, as verified by an appropriate certificate or an extract from the State Tax Service information system;
- the average salary at the enterprise, institution, or organisation for the last calendar quarter must not be lower than 2,5 minimum wages (now UAH 20,000), as confirmed by a certificate issued by the enterprise, institution, or organisation.
It is important to emphasise that permanent establishments of non-residents (foreign companies, organisations) operating in Ukraine (representative offices of foreign business entities, foreign and international NGOs) continue to be subject to the criteria set out in paragraph 20 of paragraph 2 of the Criteria: compliance with the criterion set out in subparagraph 4 of paragraph 2 of the Criteria, operation in Ukraine for the last two calendar years; accreditation (registration) in Ukraine; and tax registration.
We also note that within 10 days from the date of entry into force of CMU Resolution No. 1332 dated November 22, 2024, ministries, other state bodies with jurisdiction over the entire territory of Ukraine, regional, Kyiv and Sevastopol city administrations must establish new criteria for determining the importance of an enterprise, institution or organisation for the relevant sector of the economy or for the needs of the territorial community with the approval of the Ministry of Economy and the Ministry of Defence.
Restrictions on the number of persons liable for military service who can be reserved
By a decision of the Minister of Defence of Ukraine, the number of conscripts who can be reserved may be increased.
The total number of conscripts for the purposes of compliance with the restrictions does not include women conscripts. The number of conscripts for reservation shall be taken into account as of 18 May 2024, and in case of an increase in their number or in case of establishment of the enterprise/institution after 18 May 2024 – as of the date of submission of the lists of employees proposed for reservation.
Changes to the procedure for submitting lists of employees proposed for reservation
The lists will be formed and submitted by the head of the critical enterprise/institution or authorised person exclusively in electronic form using the Unified State Web Portal of Electronic Services (hereinafter referred to as "Diia Portal").
If a critical enterprise/institution does not have an identification code according to the Unified State Register of Enterprises and Organisations of Ukraine or there are not technically capable of generating a list through the Diia Portal for other reasons, the list is submitted to the relevant state authority that recognized it as critical. Representative offices of donor agencies and implementers of international technical assistance projects should submit such a list to the Secretariat of the CMU. Such authorities submit the list via the Diia Portal in the interests of the relevant enterprise/institution.
Within 72 hours of the list being formed, the Diia portal automatically transfers the conscript to a special military registration for the deferral duration, provided that the established requirements for reservation of the employee are met.
Please also note that for correct reflection of data on employees liable for military service in state registers, employers are obliged to submit information to the Pension Fund of Ukraine no later than the next day regarding the following events:
- employment or dismissal of an employee
- transferring an employee from one structural unit to another or transferring them to another permanent position or job
- reinstatement of an employee at work
- suspension/renewal of an employment contract
Requirements for reservation of an employee and granting them an automatic deferral
- the military registration of the employee
- employment of an employee in a critical enterprise/institution
- accrual salary to the employee for each month of the last reporting period (quarter) not lower than the 2,5 minimum wages (now UAH 20,000). Please note that for the reservation of an employee, the salary must not fall below the specified threshold.
In case the salary does not meet this requirement, it will be the basis for the cancellation of the deferral granted to the employee.
- update of the personal data specified in clause 2 of Section II "Final and Transitional Provisions" of the Law of Ukraine dated 11 April 2024 No. 3633-IX "On Amendments to Certain Legislative Acts of Ukraine on Certain Issues of Military Service, Mobilisation and Military Registration", i.e. the address of residence, telephone number, e-mail address (if any). It does not matter whether the employee updated the data within or outside the time limit specified in the above provision.
- not being on the wanted list.
It is also worth noting that employees who have been granted deferrals from mobilisation for other reasons are not eligible for reservation by an employer.
Regarding the validity of previously adopted decisions on the recognition of enterprises/institutions as critical and the issued deferrals
All deferrals granted to conscripts by the Ministry of Economy or via the Diia portal before the entry into force of CMU Resolution No. 1332 dated November 22, 2024 remain valid for the period for which they were granted, but no longer than until February 28, 2025. If the deferral was granted to the employee conditionally beyond the specified date, it will expire on February 28, 2025. There will be no automatic extension if the deferral period expires before February 28, 2025. Decisions on recognising enterprises as critical, which are in force as of November 22, 2024 but expire by November 30. 2024 (inclusive), will be extended until December 31, 2024.
Follow our updates to learn more about important legislative changes in a timely manner.
Our experts: Svitlana Teteria, Counsel; Кaryna Pidmurniak, Associate
