On 07/08/2022, the Verkhovna Rada of Ukraine considered in the first reading and adopted as a basis the draft Law of Ukraine “On Amendments to Certain Laws of Ukraine Regarding Employment of Foreigners and Stateless Persons in Ukraine” No. 5795 dated 07/16/2021 (hereinafter – the draft law) . The draft law proposes to amend 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 that concerns the issuance of work permits for foreigners and stateless persons.

As the authors of the draft law indicate, the purpose of its adoption is to simplify for employers the need for labor. This need can be satisfied by employing the labor of foreigners and stateless persons, ensuring equal working conditions for citizens of Ukraine and foreigners, decriminalizing labor relations, as well as improving legislation in this area and eliminating legal conflicts.

Therefore, the Draft Law proposes to change the list of categories of foreigners who have the right to obtain a permit, namely:

foreign employees;

seconded foreign workers;

intra-corporate assignees;

foreigners and stateless persons, in respect of whom a decision was made to issue documents to resolve the issue of recognition as a refugee or a person in need of additional protection;

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;

foreigners and stateless persons who have arrived in Ukraine for the purpose of studying at institutions of higher education and intend to work in Ukraine during the period of study and after graduation, provided that they are employed no later than 30 calendar days before the end of the study period.

As you can see, the so-called “special categories of foreigners” such as IT specialists, highly paid professionals, founders and beneficiaries, 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 Draft Law, all these categories will now fall under the general category – “foreign employees”. Also, the Draft Law adds a new category – university students. Such an innovation, according to the logic of the creators of the project, is designed to make life easier for foreign students, because the project simultaneously proposes to make certain changes 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 work permit and stay in Ukraine after graduation, at least for 1 more year.

Here it should be noted separately that the draft law was developed even before such a basis for obtaining a permit as gig contracts appeared in the Law “On Employment of the Population”, therefore they do not appear in the draft. In our opinion, this should be taken into account by the legislators during the second reading.

Accordingly, following the abolition of “special categories of foreigners”, the draft law proposes to make changes to the terms for which the permit is issued. It is proposed to keep the term up to 3 years only for seconded foreign workers and intra-corporate assignees. All others are advised to settle for a term of up to 1 year.

The following significant changes are the fee for issuing a permit. The fee is proposed to be increased, in some cases significantly. Thus, for permits up to 6 months, the fee will be 3 subsistence minimums (currently 2), for permits up to 1 year inclusive – 5 subsistence minimums (currently 4), for permits up to 3 years – 10 subsistence minimums (now 6). That is, in the vast majority of cases, such an increase will be insignificant.

In contrast to the increase in the fee for the permit, the draft law proposes to cancel the salary requirements for foreigners. As the authors of the project themselves explain, the requirements for the salary of foreigners massively encourage employers to avoid paying such a salary (10 minimum salaries) and to hire such foreigners for a part-time work week. Therefore, it is suggested that foreigners should have the same requirements as citizens of Ukraine, that is, at least 1 minimum wage per month.

The authors of the draft law also propose to expand the list of grounds for cancellation of the permit by adding the following:

  • receipt of a request to revoke a permit from the National Police, the SBU, 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;
  • 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 the single contribution to the mandatory state social insurance for a person whose work permit was obtained, from the date of concluding an employment contract (contract) with a foreigner or stateless person during the validity period of the permit.

On the other hand, it is proposed to exclude such grounds for cancellation as the employer’s failure to pay the fee for the issuance or extension of the permit. The project proposes that employers will pay the indicated funds before submitting the documents and in case of refusal, such funds should be returned to the employer.

The draft law also attempts to regulate many procedural issues that are currently not regulated at all or not clearly regulated. It is proposed to regulate the issue of issuing duplicate permits in case of loss or damage of the originals (currently there is no such procedure at all). The project offers various clarifications to the procedure for making a decision on issuing (extending) a permit in terms of the terms of decision-making by the employment center, the procedure for publishing these decisions, and the interaction of employment centers with other authorities. It is proposed to make certain changes to the list of documents submitted to the employment center in one case or another. So, for example, to obtain a new permit, instead of a copy of a draft employment contract, it is suggested 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, it is proposed that 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 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.

Among other changes, the draft law proposes to regulate the procedure for submitting documents to the employment center. Here, the legislators have come up big and propose to approve as many as 5 ways of submitting 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 draft law can be characterized as ambiguous. On the one hand, lawmakers want to abolish the so-called “special categories of foreigners” and equate everyone to the general category, which receives a permit for only one year. 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 three times more often and also three times more often to go through the procedure of obtaining a temporary permit at the Ministry of Internal Affairs. On the other hand, the abolition of the requirements for the salary of foreigners is a significant relief, which has long been demanded by business.

Also, legislators will have to somehow reconcile the changes with the presence of such a basis for obtaining permission as a gig contract. Taking into account the attention that the state paid to the implementation of DIA CITY and gig contracts, the cancellation of such a basis for obtaining a permit to employ foreigners will look like a significant step back in the process of establishing relations between the state and the IT community.

Taking into account the fact that the Cabinet of Ministers of Ukraine is the initiator of the draft law, the probability of its adoption is quite high.