On October 1, new legislative changes came into force in Ukraine, affecting restaurants, bars and cafés licensed for the sale of alcohol and tobacco. Owners of such establishments are now required to pay staff an official salary of at least two minimum wages—16,000 UAH, and in small towns—one and a half minimum wages (12,000 UAH). If the requirement is not met for three consecutive months, the license will be revoked.
The sector is already facing difficult times: analysts predict that up to 20% of Kyiv restaurants may close by the end of the year. Costs for food, energy, and rent have increased significantly, while revenues have dropped compared to the pre-war period. Finding enough staff is also a challenge.
The new requirements force owners to choose between staff cuts, higher wages, or changing prices and menu. Each option may decrease service quality and lead to loss of customers. A separate issue is tips, which are a major part of staff income in Ukraine; they are not included as part of the official wage and new rules may require including them in bills or changing how they are managed.
For small businesses, these changes are crucial: many local establishments, especially in district neighborhoods or farther from the centers, risk closing or working in the shadow economy to avoid the new obligations. This threatens to increase illegal alcohol sales and tax losses.
One stated motive for the new rules is to support the pension system. However, the lack of motivation to pay official wages and doubts about the future of the solidarity pension system push businesses and employees to unofficial agreements. Experts believe the law will lead to more closures, less tax income, and push part of the sector underground. Likely, only large chains will benefit, while small and family businesses remain under threat.
