The labor code applicable to Ukrainian business

As of April 2026, a new Labor Code has not been introduced in Ukraine. Employers and employees continue to be subject to the Labor Code of Ukraine, the Law of Ukraine "On the Organization of Labor Relations under Martial Law", the Law of Ukraine "On Vacations", as well as secondary legislation regarding employee registration, tax notification, military registration, and electronic registration of labor activity. The draft of the new Labor Code was submitted by the Cabinet of Ministers to the Verkhovna Rada as draft law No. 14386 dated January 15, 2026, but it is merely awaiting consideration and is not an active law. (itd.rada.gov.ua)

What labor rules apply to businesses in 2026

The fundamental act remains the Labor Code of Ukraine. It determines how to conclude an employment contract, how to formalize hiring, what working time regimes exist, when to grant vacations, how to pay wages, and how to conduct dismissals. During martial law, some of these rules apply with the consideration of the special Law No. 2136-IX, which allows the employer and employee to work under separate temporary rules. (Legislation of Ukraine)

Therefore, claims that a "new Labor Code" is already active in Ukraine, that the annual vacation for everyone is 28 days, or that the employer pays a penalty of 0.05% or 0.5% for delayed final settlement upon dismissal, do not correspond to the current legislation. These were elements of various concepts and draft approaches, but not norms that entered into force. Currently, the general annual basic vacation is at least 24 calendar days, and for a delay in settlement upon dismissal, a different liability mechanism applies — the payment of average earnings for the delay time, but for no more than six months. (Legislation of Ukraine)

How to properly register an employee in 2026

An employee cannot be allowed to work without proper registration. Before starting work, the employer must:

Upon employment, the employee submits an identity document, a work record book if available, or information about labor activity from the register of insured persons, and in cases specified by law — an educational document, medical document, military registration document, and other documents if expressly required for a specific position. (Legislation of Ukraine)

The notification to the tax authority is submitted according to the procedure approved by the Cabinet of Ministers Resolution No. 413. The employee cannot begin work before the employer has formalized the hiring and submitted such a notification. For businesses, this is one of the most sensitive requirements, because the actual admission to work without registration is a separate violation with financial and administrative consequences. (Legislation of Ukraine)

Electronic work record book: what the employer needs to know

In 2026, the recording of labor activity is already built around the electronic register. Law No. 1217-IX transferred the recording of labor activity into an electronic format through the register of insured persons. If a person is getting a job for the first time, the employer issues a paper work record book only at the employee's request. The transition period for submitting data to the electronic work record book ends on June 10, 2026. The Pension Fund explicitly clarifies that the information can be submitted by both the employer and the employee via the PFU web portal. (Legislation of Ukraine)

For an entrepreneur, this implies a practical point: HR data must be managed so that information can be confirmed electronically, while paper documents should only be kept where required by law or needed to prove seniority, working conditions, benefits, or payments. (Legislation of Ukraine)

What forms of labor relations are realistically available to businesses

Current legislation already allows employers to use several models of labor organization without any "new code".

Indefinite and fixed-term employment contracts

The general rule is that an employment contract can be indefinite or fixed-term, provided there are legal grounds to limit the term. The written form is mandatory in cases expressly provided by the Labor Code, as well as when demanded by the employee. For businesses, a written contract in most cases provides the best protection because it documents the position, salary, work schedule, workplace, liability, and additional terms. (Legislation of Ukraine)

Home-based and remote work

Home-based and remote work are distinct legal regimes. Home-based work is performed at the employee's residence or in another pre-determined premise. Remote work is performed outside the employer's premises in any location chosen by the employee, using information and communication technologies. Separate articles of the Labor Code and approved standard forms of employment contracts govern these regimes. In 2025, the rules on home-based and remote work were further clarified by Law No. 4339-IX. (Legislation of Ukraine)

For an entrepreneur, it is important not to confuse these regimes in one wording. If an employee works "from home" but can change their workplace at will, it is more likely remote rather than home-based work. If the work is tied to a specific location, equipment, or living conditions, it is home-based work. Improper formatting does not always result in an automatic sanction, but it creates disputes regarding time regimes, equipment provision, labor protection, and evidence of completed work. (Legislation of Ukraine)

Zero-hours employment contract

The Labor Code already includes a contract with non-fixed working hours. This is a special type of employment contract under which the specific time for performing work is not set in advance, and the employee's obligation to work arises when the employer provides the work. However, this regime is strictly limited by law: for an employer with more than 10 employees, contracts with non-fixed working hours cannot exceed 10% of all employment contracts, and if there are fewer than 10 employees, only one such contract is permitted. In addition, the employee is guaranteed payment for at least 32 hours of working time per month, even if the actual work was less. (Legislation of Ukraine)

For small businesses, this tool is convenient for uneven workloads, but using it to hide regular continuous employment is risky. If an employee essentially works continuously on a set schedule, a non-fixed working hours contract does not solve the problem but only increases the risk of disputes. (Legislation of Ukraine)

Simplified regime for regulating labor relations

The Labor Code contains a simplified regime for small and medium-sized enterprises with an average number of employees up to 250, as well as for cases where an employee's salary exceeds 8 minimum monthly wages. In such a regime, the parties can detail the working conditions directly in the employment contract, and the volume of internal HR bureaucracy can be reduced. But this regime does not negate the obligation to maintain proper accounting, submit reports, observe wage guarantees, and comply with special military rules. (Legislation of Ukraine)

Working time and rest periods during martial law

During martial law, special rules of Law No. 2136-IX apply to certain employers. For workers at critical infrastructure facilities, standard working hours can be increased to 60 hours per week. For workers who legally have shortened working hours — up to 40 hours per week. The employer may independently determine a five-day or six-day workweek, and the weekly uninterrupted rest can be reduced to 24 hours. (Legislation of Ukraine)

These rules are not a blanket permission for any business to automatically transfer all employees to a 60-hour week. They are tied to a special status and the needs of the production process under martial law conditions. For an ordinary business, doing so without proper justification is an area of elevated risk for labor disputes. (Legislation of Ukraine)

In active combat areas or areas under the threat of hostilities, the employer may independently define the procedure for conducting HR management, time tracking, and document storage, provided there is a reliable accounting of the work performed by the employee and labor costs. The law also allows the parties to agree on alternative ways of creating, sending, and storing orders, notices, and other documents, including the use of electronic communication. (Legislation of Ukraine)

Vacations: what is actually provided by law

The general annual basic vacation for an employee in Ukraine is at least 24 calendar days for the worked working year. For specific categories of employees, the law stipulates a longer duration. Thus, there is no universal rule of "28 days for everyone" in current law. (Legislation of Ukraine)

The Law of Ukraine "On Vacations" continues to provide not only for annual vacations but also for educational, creative, social, and other types of leave. Therefore, the argument that creative or other special types of leave were simply "removed from the legislation" contradicts current norms. (Legislation of Ukraine)

During martial law, the employer has the right to limit the provision of the annual basic leave to 24 calendar days for the current working year. For employees involved in work at critical infrastructure facilities, the employer can refuse to grant any type of leave, except for maternity leave and parental leave for a child under three years. Additionally, at the employee's request, unpaid leave can be granted without the time limit set by the general law, and this period does not count toward the seniority giving the right to annual basic leave. (Legislation of Ukraine)

Payment for vacation time must be made before it begins, unless otherwise provided by law, the employment contract, or a collective agreement. For the employer, this means the procedure for paying vacation pay should be explicitly regulated in internal documents or contracts to avoid disputes over payment deadlines. (Legislation of Ukraine)

Wages and payment terms

Wages are paid to employees regularly on working days no less than twice a month. The interval between payments cannot exceed 16 calendar days, and the payment must be made no later than 7 days after the end of the period for which it is carried out. This is a basic norm that remains mandatory for both small and large businesses. (Legislation of Ukraine)

On the day of dismissal, the employer must pay the employee all due amounts. If the employee did not work on that day, the settlement must be made no later than the day after presenting a demand for settlement. If the employer violates this deadline, liability under Article 117 of the Labor Code arises: they must pay average earnings for the entire delay time up to the day of actual settlement, but for no more than six months. Current law does not include a general penalty of 0.05% or 0.5% for every day of such delay. (Legislation of Ukraine)

Dismissal during martial law

Martial law legislation has given employers some additional flexibility. In particular, during the period of martial law, an employee may be dismissed on the employer's initiative even during their temporary incapacity to work or vacation, except for maternity leave and parental leave up to three years of age. The date of dismissal in such cases is the first working day following the end of temporary incapacity or vacation. At the same time, the employee's absence from the workplace due to hostilities in the work location is not considered grounds for dismissal for absenteeism, provided there is no evidence of voluntary non-performance of duties. (Legislation of Ukraine)

Separately, it should be noted that the provisions of a collective agreement during martial law cannot simply be "turned off" unilaterally by the employer at their discretion. Following the 2025 amendments, suspension of specific collective agreement provisions is possible by mutual consent of the parties in the manner determined by the agreement itself. (Legislation of Ukraine)

Payroll taxes and base figures for 2026

From January 1, 2026, the minimum wage is 8,647 UAH per month and 52 UAH per hour. This is the basic benchmark for HR planning, staffing tables, verifying minimum wage guarantees, and calculating certain tax indicators. (Legislation of Ukraine)

For a standard salary under an employment contract in 2026, the following generally apply:

For certain categories, there are special rules; in particular, for workers with disabilities, the UST rate for the employer can be 8.41% in cases expressly provided by law. (lv.tax.gov.ua)

For an entrepreneur, this implies that the risk of "saving" on undeclared labor in 2026 remains high: aside from HR sanctions, there are also additional tax assessments, UST, and associated fines. (Legislation of Ukraine)

Business liability for violating labor legislation

The financial liability of employers for labor legislation violations is defined in Article 265 of the Labor Code. It includes, in particular, actually admitting an employee to work without finalizing an employment contract, paying salaries "in envelopes", violating minimum state guarantees in labor remuneration, and other infractions. Separately, officials may bear administrative liability under Article 41 of the Code of Administrative Offenses. (Legislation of Ukraine)

During martial law, state control has a special regime. General Cabinet of Ministers Resolution No. 303 limited the holding of planned and some unplanned state supervision activities, but did not abolish control entirely. Exceptions may apply for the labor sphere and related areas, and financial sanctions under Article 265 of the Labor Code can also be applied based on court decisions establishing the fact of work without proper registration. (Legislation of Ukraine)

Jurisprudence worth considering by the employer

In matters of settlement upon dismissal, an important benchmark remains the practice of the Supreme Court regarding Article 117 of the Labor Code. The Supreme Court confirms in its official messages that compensation for settlement delays is calculated under this article's rules, but the court may assess the proportionality of such a payment considering the circumstances of the case. For a business, this matters for two reasons: firstly, delaying final settlement is genuinely expensive; secondly, the settlement upon dismissal must be documented as carefully as the dismissal itself. (Supreme Court of Ukraine)

What an entrepreneur needs to do in 2026

A practically secure HR model for business in 2026 looks like this:

Official sources

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