Ukraine's wartime legal environment has been in continuous motion since 2022. Successive amendments to Ukrainian employment legislation have altered obligations that foreign employers – and companies with Ukrainian staff on local contracts – may have assumed were settled. The most recent cycle of changes took effect in early 2025 and directly affects how employment contracts are formed. How dismissal and termination procedures must be conducted. Additionally, how social security contributions are assessed for employees working under simplified conditions.
Ukraine's updated employment regulations, effective from early 2025, impose revised requirements on written employment contracts, expand the circumstances under which wartime dismissal notice rules apply, and modify social security contribution thresholds for certain employee categories. Foreign employers maintaining a Ukrainian workforce – whether through a registered legal entity, a representative office, or a service-agreement structure – must audit their existing documentation and payroll arrangements without delay. Non-compliant employers face administrative penalties and potential liability for arrears of social security contributions.
This alert identifies the regulatory changes, maps which international business structures are affected, and sets out five immediate actions that compliance teams and their legal counsel should complete before the applicable deadlines pass.
What changed and when it took effect
Ukraine's labour legislation was substantially modified through amendments to the core body of Ukrainian employment law during the period of martial law. The changes that became operative in early 2025 focus on three areas.
Employment contract formalities. The updated rules require that every employment contract – whether concluded with a Ukrainian national or a foreign citizen employed in Ukraine – include specific clauses addressing wartime working conditions. Contracts that predate the amendments and lack these clauses are considered non-conforming. Employers were given a short transitional window, now effectively closed for most categories of worker, to bring existing agreements into compliance. A contract that does not meet the revised requirements is treated as deficient under Ukrainian employment legislation. This can affect enforceability of termination clauses and limit an employer's ability to rely on the agreed notice period.
Dismissal notice and termination procedure. The standard dismissal notice periods have been modified for certain grounds of termination, particularly where a business unit is operating under a reduced-hours or remote arrangement due to wartime conditions. The revised termination procedure introduces a written-notification requirement that differs from the pre-2022 baseline. Employers who rely on older internal HR procedures risk procedural invalidity when attempting to terminate employment, even where the underlying grounds are legally sound.
Social security and collective agreement obligations. Thresholds governing employer social security contributions have been adjusted. Separately, the obligation to maintain or register a collective agreement has been clarified for entities that employ more than a defined headcount threshold in Ukraine. Foreign employers operating through a branch or representative office are explicitly within scope. The updated rules also affect how the minimum social security base is calculated for employees on reduced pay due to wartime operational constraints.
For companies advising on corporate governance and entity structuring in Ukraine, these employment changes interact directly with decisions about whether to maintain a registered presence or operate through alternative commercial arrangements.
Who is affected – threshold criteria and business categories
The amended rules apply broadly. The following categories of foreign employer are within scope.
- Foreign companies with a registered subsidiary or branch in Ukraine employing staff on Ukrainian-law contracts.
- Representative offices of foreign entities that engage Ukrainian nationals, regardless of whether those individuals are classified as employees or service providers.
- Foreign employers that have continued to maintain Ukrainian employees on local payroll without a registered Ukrainian legal entity, using third-party employer-of-record arrangements.
- International organisations and NGOs operating in Ukraine under bilateral or multilateral frameworks, to the extent that they have not obtained a specific exemption under applicable international agreements.
The collective agreement obligation is triggered once an employer crosses the headcount threshold established under Ukrainian employment legislation. Employers below that threshold are not required to conclude a collective agreement but remain subject to all other amended requirements, including the revised employment contract clauses and the updated termination procedure.
A non-obvious risk for many foreign employers is the treatment of remote workers. Ukrainian employment legislation as amended in 2025 treats a Ukrainian-resident employee working remotely for a foreign entity as falling within the Ukrainian regulatory perimeter if the employment contract is governed by Ukrainian law or if social security contributions are being remitted to Ukrainian state funds. Simply labelling an arrangement as a service contract does not automatically remove it from the employment legislation regime. Courts and labour inspectors in Ukraine have consistently looked at the substance of the working relationship rather than the contractual label applied.
To receive an expert assessment of your employment compliance exposure in Ukraine, contact us at info@ferrazwhitmore.com.
Immediate actions for international companies
International employers should treat the following actions as time-sensitive. The compliance window is not open-ended. Labour inspections in Ukraine, though conducted under modified wartime procedures, remain active and can result in financial penalties and reputational consequences.
1. Audit all employment contracts. Review every active employment contract governed by Ukrainian law. Identify agreements that lack the wartime working-condition clauses now required. Prepare addenda and obtain employee signatures before the next scheduled payroll cycle.
2. Update dismissal and termination procedures. Revise internal HR policies to reflect the amended dismissal notice periods and written-notification requirements. Ensure that any pending or contemplated terminations follow the updated termination procedure rather than pre-amendment guidelines. A procedurally defective dismissal can be reversed by a Ukrainian labour court, generating reinstatement orders and back-pay liability.
3. Recalculate social security contribution bases. Have your payroll team or external advisers verify that the social security contribution base for each employee is calculated using the thresholds in force from early 2025. Pay particular attention to employees on reduced pay or partial working weeks, where the minimum base rules produce a different result than the nominal salary figure.
4. Assess the collective agreement obligation. If your Ukrainian headcount is near or above the applicable threshold, obtain a legal opinion on whether a collective agreement must be concluded or updated. Failure to comply with this obligation is a distinct ground for administrative liability, separate from contract-level non-compliance.
5. Review employer-of-record and service-contract arrangements. If you rely on third-party structures or service agreements to engage Ukrainian workers, instruct legal counsel to assess whether those arrangements satisfy the updated employment legislation requirements. Reclassification risk is heightened where the amended rules make the substance-over-form analysis more likely to produce an employment finding.
Foreign employers with questions about how these changes intersect with their specific entity structure can find further context in our overview of employment law services in Ukraine. For employers also monitoring developments in neighbouring CIS jurisdictions, our alert on employment regulation changes in Russia addresses comparable wartime and post-wartime labour law dynamics.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our employment law practice covers both EU member states and CIS markets, including Ukraine, where we assist foreign employers with employment contract compliance, social security structuring, termination procedure review, and collective agreement obligations. The firm combines Portuguese civil law expertise with English common law tradition to deliver cross-border employment solutions for international businesses operating in high-complexity or high-change regulatory environments. As a law firm with Ukraine practice coverage, we work with in-house legal teams and HR directors who need a lawyer in Ukraine with international perspective. To discuss your employment compliance situation in Ukraine, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.