The Rada supported fines for employers for wage arrears

The Verkhovna Rada of Ukraine has adopted in the first reading draft law No. 9510, initiated by the head of the parliamentary committee on social policy, Halyna Tretyakova. The document provides for a significant strengthening of the protection of employees' rights in the event of salary delays, especially in situations of employer insolvency.

One of the main innovations of the draft law is the introduction of a mandatory penalty in case of salary delay for more than 15 calendar days after the end of the month. The amount of the penalty is not less than the NBU discount rate for each day of delay. Compensation is also provided in accordance with current legislation for the loss of part of the income due to untimely payment.

In addition, the employee is given the right to temporarily stop work in the event of such a delay, which should encourage employers to adhere to payment deadlines.

The document proposes the creation of a special guarantee institution that will pay compensation to employees in the event of the employer's insolvency. The amount is up to three average monthly salaries, but no more than 12 minimum salaries. In this case, compensation payments will be taken into account in the insurance period.

The grounds for issuing court orders are also being expanded - from now on, the amount of the debt may include interest and compensation.

The Ministry of Finance has expressed disagreement with the project, warning that implementing the initiative will require additional expenditures from the state budget, which is a concern in the context of martial law and budget constraints.

According to the State Statistics Service, at the beginning of 2022, wage arrears reached UAH 3.1 billion. The largest amounts — over UAH 2.2 billion — fell on industrial enterprises. The largest debtors were state-owned and municipal enterprises.

Despite the warnings of government officials, the parliament supported the initiative, which could be an important step towards real protection of workers' labor rights.

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