Volodymyr Zosimov, Lawyer, EBS

On October 15, 2022, the Law of Ukraine “On Amendments to Certain Laws of Ukraine Regarding Employment of Foreigners and Stateless Persons in Ukraine and Provision of Mediation Services in Employment Abroad”

No. 2623-IX dated September 21, 2022 came into force (hereinafter – Law), which made significant changes to the Law of Ukraine “On Employment of the Population” and the Law of Ukraine “On the Legal Status of Foreigners and Stateless Persons” in the part related to the issuance of permits for the employment of foreigners and stateless persons.
As the authors of the law themselves pointed out, this law is designed to simplify for employers the provision of labor needs that can be met by employing the labor of foreigners and stateless persons, ensuring equal working conditions for citizens of Ukraine and foreigners, de-criminalization of labor relations, as well as improving legislation in this area and elimination of legal conflicts.
Looking ahead, let’s say that this law really facilitates the access of foreigners to the domestic labor market to a certain extent, but at the same time it removes certain opportunities that foreigners had before the entry into force of this law.

Looking ahead, let’s say that this law really facilitates the access of foreigners to the domestic labor market to a certain extent, but at the same time it removes certain opportunities that foreigners had before the entry into force of this law.

Therefore, the law changes the list of categories of foreigners who have the right to obtain a permit, and establishes the following categories, namely:

  1. foreign employees;
  2. seconded foreign workers;
  3. intra-corporate assignees;
  4. foreigners and stateless persons, in respect of whom a decision has been made to issue documents to resolve the issue of recognition as a refugee or a person in need of additional protection;
  5. persons who have submitted an application for recognition as a stateless person, and persons who are appealing the decision to refuse recognition as a stateless person;
  6. foreigners and stateless persons who arrived in Ukraine for the purpose of studying in institutions of higher education and intend to work during the period of study and after graduation, provided that they are employed no later than 30 calendar days before the end of the period of study Ukraine.

As you can see, the so-called “special categories of foreigners” such as IT specialists, highly paid professionals, founders and beneficiaries of Ukrainian legal entities, graduates of universities included in the top 100 world rankings, and workers in creative professions are completely absent from this list. As follows from the logic of the Law, from now on all these categories fall under the general category – “foreign employees”.
The Law also adds a new category – students of domestic universities. According to the logic of the creators of the Law, such an innovation is designed to make life easier for foreign students, because at the same time, certain changes were made to the Law of Ukraine “On the Legal Status of Foreigners and Stateless Persons”, which overall looks like an attempt to allow such students to receive a temporary residence permit based on a permit for employment and stay in Ukraine after graduation, at least for 1 more year.
Also, the Law finally resolved the issue of the need to obtain a permit for foreigners who signed a gig contract, now they must obtain a permit on general grounds.
Accordingly, following the abolition of “special categories of foreigners”, the Law introduced changes to the terms for which a permit is issued. The term of up to 3 years was left only for seconded foreign workers and intra-corporate assignees. All others are advised to settle for a term of up to 2 years. On the one hand, this is a significant relief for those foreigners who previously fell under the general category, because it is now possible to extend the permit twice as often, but on the other hand, all those foreigners who previously had a “special category” and received a permit for 3 years now will submit documents to employment centers more often.
The following significant changes are the fee for issuing a permit. Fees have been increased, and in some cases significantly. Yes, for permits up to 6 months, the fee is 3 subsistence minimums (there were 2), for permits up to 1 year inclusive – 5 subsistence minimums (there were 4), for permits up to 2 years inclusive – 8 subsistence minimums (previously there were none) for permits up to 3 years – 10 subsistence minimums (there were 6). That is, for the general category, the fee has doubled from now on (but the permit term has also been doubled). At the same time, the amount of the fee for extending the validity of the permit is reduced by one subsistence minimum from the amount of the fee for issuing the permit for the corresponding period.
The list of persons to whom the permit is issued free of charge has also been expanded. From now on, this category also includes foreigners who came to Ukraine to study at universities, as well as foreigners who took a direct part in repelling and containing the armed aggression of the Russian Federation against Ukraine.
In contrast to the increase in the fee for the permit, the Law abolished the salary requirements for foreigners. Until now, the requirement for foreigners’ wages to be 10 times the minimum wage was for many employers the main obstacle to employing a foreigner. As the authors of the Law themselves explained, the requirements for the amount of wages of foreigners massively encourage employers to avoid paying such wages (10 minimum wages) and to register such foreigners for a part-time work week. We would like to add that such a requirement prompted many employers to resort to more radical methods such as informal employment, which in turn led to more “exotic” schemes for obtaining temporary residence permits for such “unemployed” foreigners.
Therefore, in terms of salary, the requirements for foreigners are the same as for citizens of Ukraine, i.e. not less than 1 minimum wage per month.
The payment procedure for issuing a permit has also been changed. The employer must make the payment before submitting the documents for the permit. In case of refusal to issue a permit, the paid funds must be returned to the employer within 10 days from the date of the decision on refusal.
Positive innovations also include the possibility of working without a permit in part-time positions at one employer, if the term of the employment contract for the part-time position does not exceed the term of the permit at the main place of work. It is also possible to combine work in the position defined by the permit with work in the position of a temporarily absent employee, provided that the combination lasts no more than 60 calendar days during the calendar year.
The law expanded the list of grounds for cancellation of a permit. Added the following grounds:

  • receipt of a request to revoke a permit from the National Police of Ukraine, the Security Service of Ukraine, another state body that, within the limits of its powers, ensures compliance with the requirements of the legislation on the legal status of foreigners and stateless persons, signed by the head of the body, in the event that the actions of a foreigner or a person without citizenship violate the legislation on the legal status of foreigners and stateless persons or contradict the interests of ensuring the national security of Ukraine or the protection of public order, or if it is necessary to protect health, protect the rights and legitimate interests of citizens of Ukraine;
  • non-payment by the employer, according to the data of the register of insured persons of the State Register of Mandatory State Social Insurance, of a single contribution to the mandatory state social insurance for a person whose work permit has been obtained, within two months from the date of concluding an employment contract (contract) with a foreigner or a stateless person, except for cases provided by law.

The first reason for cancellation looks quite logical, especially in the conditions of the war with Russia, the state should have a quick tool for expelling unwanted foreigners. But on the other hand, if such a submission is signed only by the head of the relevant body, it opens up certain opportunities for abuse and corruption, especially in peacetime.
The second reason can become a significant obstacle for so-called “sleeping” companies that do not conduct economic activity, but at the same time have a director – a foreigner. From now on, such foreigners have a high chance of losing their work permit, which may entail the imposition of a fine on their employer for using a foreigner’s labor without a permit.
The law also regulates many procedural issues that are currently not regulated at all or not clearly regulated. Yes, the issue of issuing duplicate permits in case of loss or damage of the originals has finally been resolved (previously, such a procedure did not exist at all).
The law introduced various clarifications to the procedure for making a decision on issuing (extending) a permit in terms of the terms of making decisions by the employment center, the procedure for publishing these decisions, and the interaction of employment centers with other authorities. Certain changes have been made to the list of documents submitted to the employment center in one or another case. So, for example, in order to obtain a new permit, instead of a copy of the draft employment contract, from now on it is necessary to submit a draft of such an employment contract. Although such a change is not significant at first glance, those who have encountered this procedure know how usually employment centers are very meticulous about how a copy of the draft employment contract is certified. Therefore, replacing “project copy” with “project” should make life a little easier for employers.
A significant clarification to the permit extension procedure is the time limit when the employer can apply to the employment center to extend the permit. Thus, the employer will be able to submit documents to the employment center for the extension of the permit “no later than 20 and no earlier than 50 calendar days before the expiration of the validity of such a permit.” In our opinion, this restriction is of significant importance for those foreigners who, on the basis of a work permit, receive a temporary residence permit in Ukraine. For such persons, it is stipulated that it is possible to submit documents for the extension (exchange) of a permit no later than 15 working days (usually 21 calendar days) before the expiration of the permit. In these cases, both the permit and the permit usually expire on the same day, and therefore foreigners and their employers try to obtain an extension of the work permit in advance, in order to have enough time to submit documents for the permit. In the case of the introduction of the restriction “not earlier than 50 calendar days”, employers will have to submit documents for the extension of the permit on the very first day of such an opportunity, because if in the process of obtaining an extended permit it is necessary to correct or report documents, the time to submit documents for the permit will be not many. Also, this actually makes it impossible to extend a temporary residence permit for those foreigners who have to pass an inspection at the SBU to obtain a permit. In practice, an inspection at the SBU increases the period of obtaining a permit to 1.5-2 months, which in turn will lead to the fact that such foreigners will receive an extended permit already after the deadlines for submitting documents for the extension of the residence permit have passed.
Among other changes, the law changed the method of submitting documents to the employment center. Here, the legislators have come up big and offer as many as 5 ways to submit documents:

  1. in person, during an appointment at the employment center;
  2. by sending a postal item with a description of the attachment;
  3. through the employer’s electronic office on the official website of the employment center, or other state electronic systems of online services using an electronic signature and passing the verification procedure;
  4. through the center for providing administrative services;
  5. through the Unified state web portal of electronic services, including through the information systems of state bodies and local self-government bodies integrated with it” (if technically possible).

So, in general, this Law can be characterized as ambiguous. On the one hand, the legislators canceled the so-called “special categories of foreigners” and equated everyone to the general category, which receives a permit for 2 years. First of all, IT specialists who currently receive a 3-year permit will be affected here, as well as founders or beneficiaries who quite often were employed in “their” company in a managerial position. These categories will have to pay for a permit more often and also go through the procedure of obtaining a temporary permit at the State Department of Internal Affairs more often. On the other hand, the abolition of the wage requirements for foreigners is a significant relief that business has been demanding for a long time.

Volodymyr Zosimov,
Lawyer, EBS

Source: ЮРИСТ & ЗАКОН – Компетентна думка