On March 17, 2015 a long-awaited procedure1 (the “Procedure”) became effective, finally allowing employers to claim compensation for salaries paid to employees that were mobilized but continue to receive an average income for the period of conscription.
Implications for employers
Under Ukrainian law, employees conscripted for military service are entitled to keep their place of work, job title and average income for the duration of conscription but no longer than for a year. Employers’ costs for payment of such average income are compensated from the state budget of Ukraine according to the procedure to be adopted by the Cabinet of Ministers of Ukraine. Even though the law providing for the compensation was adopted in May 2014, companies were prevented from receiving the compensation, as no procedure existed until now.
The Procedure requires companies to follow the following steps to receive the compensation:
- prepare report on average income payment costs, which must include the average income payment costs and information about the conscripted employees and details about the military commissariat that called up the employees, date and number of the call-ups and demobilization orders;
- approve the report with military commissariat to confirm the military service status of the employees; and
- file the approved report with district municipal social protection authorities before the 15th day of the month.
We note that the Procedure does not include provisions specifically dealing with the issue of whether companies may receive compensation for previous periods, during which an average income was paid to conscripted employees. Therefore, only practical application of the Procedure will show whether such compensation for previous periods is available.
Compensation of average income paid to mobilized employees is finally available to all companies in Ukraine. The Labour & Employment practice of Vasil Kisil & Partners is ready to provide specialized legal support in the course of claiming such compensation.