The Ukrainian government has approved a draft of the new Labor Code after two years of preparation, sending it to parliament for a first reading. This marks the first comprehensive review of labor legislation since 1971, replacing the outdated Soviet-era code. Over the past decades, Ukraine’s economy, technologies, workplace formats, and political system have radically changed.
The new code’s primary goal is to define labor relations clearly. It introduces eight specific criteria: if a work relationship meets these, it must be treated as formal employment, with all applicable taxes and social contributions. For businesses, this means reviewing all contracts and less flexibility in using independent contractors.
The number of contract types rises from six to nine, introducing new categories such as apprenticeship and project contracts, and legalizing remote and flexible working conditions. Electronic contracts are equated with paper contracts, pushing companies to invest in digital document management systems.
The minimum wage will now be set as a percentage of the average national wage, with an hourly minimum for part-time and flexible workers. Labor inspections will shift to a risk-based model: compliant companies will face fewer checks, while higher-risk companies will see more oversight.
The legislation incorporates over 30 EU directives, increasing employee protections but also adding obligations for employers. Other changes include an increase in unpaid leave, new safeguards for parents, and clear regulations for workplace video surveillance.
Implementation will take several months following parliamentary readings and amendments. Large businesses are better positioned to adapt; for smaller firms, the transition may be challenging and costly. Whether the new code will reduce legal disputes and simplify business processes—or create new hurdles—depends on how the law is enacted in practice.