Companies, sole proprietorships, and also, private individuals employing cooks, nannies, drivers, etc. can hire workers. In that case, they all become employers and are required to comply with labor legislation. Read on to find out about all nuances of documenting employees.
When is an employment contract needed?
Employers often make civil law-regulated agreements with employees, not employment contracts. However, you cannot choose options in this case. The employee-employer relationship must always be documented in the form of employment contract. A civil law-regulated service agreement can be made with an independent contractor or a self-employed person, i.e., a private entrepreneur or sole proprietor running an own business.
As a rule, a person is considered an employee if:
- you hire them to a certain position with certain responsibilities, and determine their work procedures and working hours;
- you control how they do their job, when and where;
- you pay them a fixed hourly wage / weekly or monthly salary;
- you pay for the work process, not for work results;
- you provide them with equipment and materials to do their job;
- you give them days off, paid vacations, etc.
Do the rules of documenting employees differ for legal entities, private individuals or sole proprietors?
The procedure of documenting the legal relationship with hired employees is the same for all employers. It includes three main steps:
- making an employment contract;
- issuing a hiring order (or directive for sole proprietorships);
- reporting it to the State Tax Service.
What documents is an employee required to provide?
To make an employment contract, an employee is required to provide:
- their passport or another identity document;
- their taxpayer identification number;
- their labor book (if available).
If necessary for work purposes, you may also request an employee to provide a certificate of education, medical clearance, etc.
Important! You are forbidden to require your employees to provide information about their political affiliation, ethnicity, origins, or registration of the place of residence or stay.
Am I required to make an employment contract in writing?
An employment contract can be made in written or verbal form.
The written form is obligatory:
- when the employee insists on it;
- in the case of organized hiring of employees;
- for employees working in areas with special natural conditions or high health risk (for example, in a radioactively contaminated location);
- when making a contract;
- if the employee is a minor;
- if the employer is a sole proprietor or private individual;
- for employees of religious organizations;
- for employees performing alternative service;
- for employees engaged in public works;
- for farm employees;
- for employees hired to work from home;
- in other cases required by law.
Otherwise, you can make a verbal agreement. For that purpose, an employee must write a request for employment, made in the name of the head. On their part, the head will write their resolution on the request.
In what form an employment contract must be made?
If you are a private individual or a sole proprietor, you must use an approved form.
If you are a legal entity, you may use an arbitrary contract form, specifying:
- the employee’s job responsibilities;
- working time and time off;
- benefits, guarantees and compensations;
- remuneration and bonus eligibility terms;
- additional pays, overtime pays and other.
An employment contract may have:
- indefinite validity term;
- a defined validity term;
- a validity term for performance of certain work.
After making an employment contract, you have to issue an employee hiring order or directive. See: standard employment order form.
What to do after making a contract?
You have to report the hiring of a new employee to the State Tax Service.
- the report must be filed in the approved form before the commencement of employment;
- the report must be filed by the owner of business, an owner-authorized representative or the private individual with the tax authority having jurisdiction over the place of their registration as flat social security tax payers;
- the report may be filed in electronic or paper (if the number of employees does not exceed five) form;
- the reported information is filed in the register of insureds and the register of insured persons.
Important! Beginning from 2015, private individuals and sole proprietors do not register employment contracts with the State Employment Service. They assign numbers to employment contracts themselves, and enter the relevant records in the labor book.
For additional information, contact the State Labor Service of Ukraine.
Code of Labor Laws of Ukraine, Article 24. Making an employment contract
Order 260 of the Ministry of Labor and Social Policy of Ukraine of 08.06.2001 approving the Form of employment contract between an employee and an individual employing hired workforce, and the Procedure of registering an employment contract between an employee and an individual employing hired workforce
Resolution 413 of the Cabinet of Ministers of Ukraine of 17.06.2015 on the procedure of reporting the hiring of new employees to the State Fiscal Service and its branches
Order 58 of the Ministry of Justice, Ministry of Labor and Ministry of Social Protection of 29.07.1993 approving the Instruction on the procedure of keeping employee labor books
By Maria Datsiuk
“Go into Light!” campaign is carried out as part of the project “On the way toward safe, healthy and declared employment in Ukraine” funded by the EU and implemented by the International Labor Organization.