Compensation for employers for hiring the unemployed persons and creating new workplaces

In 2023 the Ukrainian government has adopted significant regulations in employment that provide for compensation for employers for hiring the unemployed persons and creating new workplaces:

CMU Resolution No. 124 dated 10.02.2023, which approved the Procedure for Providing Employers with Compensation for Employment of Registered Unemployed Persons.
Resolution of the Cabinet of Ministers of Ukraine No. 338 dated 18.04.2023 "Some Issues of Providing Compensation to Employers of the Single Contribution to the Compulsory State Social Insurance for Employment in New workplaces", which approved two procedures:

• The Procedure for Compensation to Employers of a Part of Actual Expenses Related to Payment of the Unified Social Tax for Employment to New Jobs;

• The Procedure for Compensation to Small Businesses for Actual Expenses in the Amount of a Single Contribution to Compulsory State Social Insurance for Employment of Registered Unemployed Persons for New Jobs.

Together with the Law of Ukraine "On Employment of the Population", these resolutions provide for such types of compensations:

1. Compensation of the single contribution

In the amount of a single contribution (not more than double the minimum insurance contribution) for employment for at least two years of persons who:

• have additional guarantees in facilitating employment and have been in the status of registered unemployed for more than one month;

• have additional guarantees in facilitating employment and have been in the status of registered unemployed for more than one month.

Small business entities in the amount of a single contribution for the employment of registered unemployed persons for new jobs for at least two years.

The total duration of compensation is 12 months.

2. Compensation of 50% of actual labor costs

Compensation of 50 percent of the actual labor costs incurred by the employer (but not exceeding the minimum wage) for the employment of persons who have been registered as unemployed for more than one month:

persons with disabilities
participants of military operations,
who are no more than five years away from the age of eligibility for retirement pension.

The total duration of compensation is 6 months.

3. Compensation of 50% of the single contribution

If employees are hired for new jobs with a salary of at least three minimum wages over the next 12 calendar months, the employer is reimbursed for actual expenses in the amount of 50 percent of the amount of the accrued unified social contribution.

4. Compensation of 50 percent of the minimum wage

Compensation of 50 percent of the minimum wage for the employment of unemployed youth.

The total duration of compensation is no more than 6 months.

5. Compensation for Labor Costs for Employment of Internally Displaced Persons

Also, remains in force the Resolution of the Cabinet of Ministers of Ukraine No. 331 dated March 20, 2022, which approved the Procedure for Providing Employers with Compensation for Labor Costs for Employment of Internally Displaced Persons as a Result of Hostilities during Martial Law in Ukraine.

According to this Procedure, the expenses are reimbursed in the amount of the minimum monthly salary UAH 8,000/month (as of April 2024) for each employed person for whom the employer pays a single contribution for the period of martial law and within 30 calendar days after its cancellation or termination.

The total duration of expense reimbursement cannot exceed three months, and for persons with disabilities among internally displaced persons, it cannot exceed six months from the date of employment .

The employer can apply between 5 days and 6 months after the employment date. To do this, contact the employment center or use the Diia portal.