Minimum salary is a state social guarantee that is obligatory for enterprises of all ownership forms

Press service of the State Tax Service of Ukraine, published 27 December 2023 at 10:52 Chapter: News

Minimum salary is a state social guarantee, obligatory throughout the territory of Ukraine for enterprises of all ownership forms, management and individuals who use work of employees under any payment system. Amount of employee's salary for a fully completed monthly (hourly) rate of work cannot be lower than amount of the minimum salary (Articles 3- 3¹ of the Law of Ukraine № 108/95-VR as of 24.03.1995 "On remuneration", hereinafter – Law № 108).

According to the Budget code of Ukraine, amount of minimum salary is determined by the Law on the State budget of Ukraine for relevant year.

Law of Ukraine on the State budget of Ukraine for 2023 establishes minimum salary in the amount of 6 700 UAH starting January 1, 2023.

Articles 35-36 of the Law № 108 stipulate that control over compliance with labor legislation is carried out by the central executive body, which implements state policy on supervision and control over compliance with labor legislation and tax authorities. Tax authorities have a right to conduct audit without prior warning the payer in cases provided for by the law. Legislative violations on labor remuneration are subject to disciplinary, material, administrative and criminal liability according to legislation.

Sub-paragraphs 54–545 of Paragraph4 of Regulation on the State Labor Service of Ukraine, approved by Resolution of the Cabinet of Ministers of Ukraine № 96 as of 11.02.2015 "On approval of Regulation on the State Labor Service of Ukraine" stipulate that State Labor Service of Ukraine, according to tasks assigned to it, conducts monitoring in sphere of salaries in a timely manner and not lower than minimum amount of salaries determined by the state and imposes, in cases provided for by the law, fines for legislative violations, non-fulfillment of requirements of officials of the State Labor Service of Ukraine.

Article 265 of the Code of Labor Laws of Ukraine stipulates that officials of state authorities and local self-government bodies, enterprises, institutions and organizations guilty of violating labor legislation are liable according to current legislation.

Legal entities and individuals-entrepreneurs who use hired labor are liable in the form of a fine, in particular, in case of non-compliance with the minimum state guarantees in payment for work in the amount of twice minimum salary established by the law at the time of detection of violation for each employee, in respect of which violation has been committed.

In addition, please note that according to Article 24 of the Law of Ukraine № 1058-IV as of 09.07.2003 "On obligatory state pension insurance" (hereinafter – Law № 1058), insurance length of service is a period (term) during which person is subject to obligatory state pension insurance and for whom monthly insurance premiums are paid in amount not less than the minimum insurance premium.

Insurance period is calculated in months. Incomplete month of work, if the insured person was subject to obligatory state pension insurance or voluntarily participated in system of obligatory state pension insurance, is included in the insurance record as a full month, provided that amount of insurance premiums paid for this month, taking into account amount of insurance premiums, paid based on the minimum salary, is not less than the minimum insurance contribution (Part 3 Article 24 of the Law № 1058).

As follows, due to the non-payment or incomplete payment of single social contribution, employees lose insurance experience and possibility of receiving decent old-age pension, disability pension, in connection with a loss of the breadwinner and in other cases provided for by the law.

Since the minimum salary is a state social guarantee, obligatory throughout the territory of Ukraine for enterprises of all ownership forms and management, employers must strictly comply with current legislation on salaries.