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LAW OF UKRAINE

of March 24, 1995 No. 108/95-BP

About compensation

(as amended on 01-07-2022)

This Law determines the economic, legal and organizational principles of compensation of the workers consisting in employment relationships based on the employment contract with the companies, organizations, the organizations of all patterns of ownership and managing (further - the companies), and also with certain citizens and spheres of the state and contractual regulation of compensation and is aimed at providing the reproduced and stimulating functions of the salary.

Section I General provisions

Article 1. Salary

The salary is the remuneration estimated, as a rule, in terms of money which according to the employment contract the employer pays to the worker for the work performed by it.

The size of the salary depends on complexity and conditions of the performed work, professional and business qualities of the worker, results of its work and economic activity of the company.

Article 2. Salary structure

Base pay. It is remuneration for the performed work according to the established work regulations (regulations of time, development, servicing, job responsibilities). It is established in the form of the tariff charges (salaries) and price-work quotations for working and official pay rates for employees.

Additional salary. It is remuneration for work over the established regulations, for labor progress, ingenuity and for special working conditions. It includes surcharges, allowances, the warranty and compensation payments provided by the current legislation; the awards connected with accomplishment of shop orders and functions.

Other incentive and compensation payments. Payments in the form of remunerations following the results of work in year concern to them, award on special systems and provisions of payment within grants, the compensation and other money and material payments which are not provided by acts of the current legislation or which are made over established by the specified acts of regulations.

Article 3. Minimum wage

The minimum wage is the minimum wage established by the law for the monthly (hour) regulation of work executed by the worker.

The minimum wage is established at the same time in monthly and hourly sizes.

The minimum wage is the state social guarantee obligatory in all territory of Ukraine for the companies of all patterns of ownership and managing and physical persons using work of hired employees any wages system.

Article 3-1. Guarantees of providing minimum wage

The size of the salary of the worker for completely executed monthly (hour) regulation of work cannot be lower than the size of minimum wage.

In case of calculation of the size of the salary of the worker for ensuring its minimum size surcharges for work in adverse conditions of work and the increased risk for health, for work in night and overtime, traveling nature of works, awards to festive and to anniversaries are not considered.

If the accrued payroll of the worker who executed monthly regulation of work below legislatively established size of minimum wage, the employer carries out surcharge to the level of the minimum wage paid monthly along with salary payment.

If the salary size in connection with frequency of payment of its components is lower than the size of minimum wage, surcharge to the level of minimum wage is made.

In case of execution of an employment agreement about work on the terms of part-time, and also in case of failure to carry out by the worker in full of monthly (sentry) regulation of work the minimum wage is paid in proportion to the executed work regulation.

The minimum wage in hourly size is applied at the companies, in organizations, the organizations, irrespective of pattern of ownership and at the physical persons using wage labor in case of application of hourly pay of work.

Article 4. Sources of funds for compensation

Source of funds for compensation of employees of the self-supporting companies is the part of the income and other means received as a result of their economic activity.

For the organizations and the organizations financed from the budget are the funds allocated from the relevant budgets of grants and also part of income gained as a result of economic activity and from other sources.

Associations of citizens pay work of hired employees from the means created according to their charters.

Article 5. System of the organization of compensation

The organization of compensation is performed on the basis:

legal and other regulations;

the general agreement at the national level;

industry (cross-industry), territorial agreements;

collective agreements;

employment contracts;

grants.

Subjects of the organization of compensation are: public authorities and local self-government; employers, organizations of employers, merging of the organizations of employers or their representative bodies; labor unions, merging of labor unions or their representative bodies; workers.

Article 6. Wages systems

Wages systems are tariff also other systems which are created on estimates of complexity of the performed works and qualification of workers.

The tariff wage system includes: scales of charges, the tariff charges, schemes of official pay rates both professional standards and qualification characteristics (in the absence of professional standards).

The tariff wage system is used in case of job sharing depending on their complexity, and workers - depending on qualification and according to categories of scale of charges. It is basis for forming and differentiation of the sizes of the salary.

The scale of charges (the scheme of official pay rates) is created on the basis of the tariff charge of the working first category and interqualification (interofficial) ratios of the sizes of the tariff charges (official pay rates).

The scheme of official pay rates (tariff charges) of employees of the organizations, institutions and the organizations financed from the budget is created on basis:

the minimum official pay rate (tariff charge) established by the Cabinet of Ministers of Ukraine;

interofficial (interqualification) ratios of the sizes of official pay rates (tariff charges) and tariff coefficients.

The minimum official pay rate (tariff charge) is established in the amount of, it is at least subsistence minimum established for able-bodied persons for January 1 of calendar year.

Reference of the performed works to certain job grades and assignment of qualification categories by the worker is made by the owner or the body authorized by the owner according to professional standards in coordination with elected body of primary trade-union organization (the trade-union representative). In the absence of professional standards such reference can be performed according to qualification characteristics.

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