The President of Ukraine Volodymyr Zelenskyi signed the Law "On Amendments to the Law of Ukraine" On the State Budget of Ukraine for 2020 "№ 822-IX, which was adopted by the Parliament at its extraordinary session on August 25, 2020.
"These are the steps we can take towards a decent standard of living for Ukrainians. With the increase in the minimum wage, the incomes of public sector workers will increase: teachers, educators, social workers, as their salaries are calculated according to a single tariff grid, as well as doctors." noted Vladimir Zelensky.
As a result, from September 1, the minimum wage is increased:
- in the monthly amount from UAH 4,723 to UAH 5,000;
- in the hourly amount from UAH 28.31 to UAH 29.20.
Instead, the subsistence level remains unchanged. It was last increased on July 1, 2020.
Minimum monthly salary and salary of employees
The amount of the employee's salary for a fully performed monthly (hourly) rate of work may not be lower than the amount of the minimum wage (Part 1 of Article 31 of the Law of Ukraine "On Remuneration of Labor" of 24.03.1995 В 108/95-VR, hereinafter - the Law on wages). Therefore, starting from September 2020, they are paid at least UAH 5,000 per month and UAH 29.20 per hour.
In turn, the minimum salary (tariff rate) is set at a rate not less than the subsistence level set for able-bodied persons on January 1 of the calendar year (Part 6 of Article 6 of the Law on Remuneration of Labor). Therefore, this indicator remains unchanged during 2020 - UAH 2,102.
Therefore, according to these innovations, although employers are not obliged to change salaries from September 2020, which are provided by employment contracts or staffing, we still consider it appropriate to raise their size to the minimum wage to avoid sanctions. Often in organizations, the pay system is "tied" to the size of the minimum wage with "pegged" to inter-job ratios. Thus, the growth of the minimum wage will lead to a multiple increase in salaries. As all positions in the staff list are subject to changes, taking into account the need for additional payments, it is advisable to approve the staff list in a new version.
Therefore, if the staff list provides for salaries (tariff rates) in the amount of the minimum wage, then in case of its increase, an order should be issued to amend the staff list in order to eliminate violations in the remuneration of employees.
If the employee is charged a smaller salary, the employer faces a fine.
According to Art. 265 of the Labor Code, employers are financially responsible for violating the deadlines for payment of wages to employees for more than one month and its payment in full in the form of a fine of 3 minimum wages (now it is 15,000 UAH).
A number of indicators are determined depending on the size of the minimum wage or subsistence level, which is established by law as of January 1 of the tax (reporting) year. That is, their size is fixed on 01.01.2020, and they are valid throughout 2020.
So for the whole of 2020 remain unchanged:
- the amount of social tax benefit, as well as the maximum amount of income that entitles to it;
- non-taxable amounts of daily expenses;
- tax-free amount of gifts;
- non-taxable amount paid in favor of domestic higher and vocational education institutions;
- the amount of tax-free charitable assistance;
- tax-free payments or reimbursements from trade unions;
- real estate tax;
- single tax for payers of groups 1 and 2;
- car parking fee;
- transport tax;
- tourist tax;
- court fee;
- payment for administrative services and state duty;
- amounts of forgiven (canceled) debt, which are not included in the taxable income of an individual.
The President's Office also reminded that the increase of the "minimum wage" from September this year is the first stage, the second will be the increase from 2021 to 6 thousand hryvnias, and during 2021 the minimum wage should increase to 6.5 thousand hryvnias. funds to raise the "minimum wage" want to take from those who have saved on debt service. The amount will be UAH 3.5 billion. Savings became possible due to the deviation of the actual exchange rate of the national currency against foreign currencies compared to the forecast rate taken into account during the preparation of the State Budget for 2020.