Complete Reset of Labor Relations: What the Draft Law on the New Wage System Proposes
As previously reported by the Judicial and Legal Newspaper, draft law No. 14387 "On a Fair Wage System in Ukraine" is awaiting first reading in the Verkhovna Rada. On February 18, the Committee on Social Policy and Veterans' Rights Protection recommended that parliament include the document on the agenda and adopt it as a basis.
The Labor and Employment Inspection of the Dnipro City Council noted that the document proposes a complete revision of approaches to wage formation and the establishment of uniform rules for the public, private, and civil sectors.
What changes are proposed?
- Transition to a grade-based wage system
Instead of the usual tariff grid, the introduction of grades is proposed — a system where the pay level is determined by the complexity of the position, responsibility, employee qualification, and market value of the work.
In fact, this means moving away from a formal approach to a more flexible reward model.
- New wage structure
The draft law provides for dividing payments into three components:
- basic (fixed) salary;
- additional (variable) part — bonuses, allowances, supplements;
- additional benefits from the employer — social packages, employee support programs, and other forms of incentives.
- Minimum wage as a guaranteed social standard
The document clarifies that the minimum wage is a state guarantee below which an employer has no right to pay for the work norm performed by an employee regardless of the form of ownership of the enterprise or the payment system.
- Establishment of uniform principles for wage formation
Main principles include:
- fairness;
- non-discrimination;
- market conformity;
- financial justification;
- transparency;
- stability;
- voluntary agreement on wage conditions.
- Introduction of wage confidentiality regime
One of the most debated innovations is the introduction of so-called wage secrecy.
Information that may be protected includes:
- official salaries;
- wage structure;
- individual payments to specific employees;
- internal bonus systems and other incentive programs.
- New mechanisms of state control
It is planned to create special regulatory tools — the Executive and General Tables, which will determine the permissible limits of annual wages for positions in the public service sector.
When might the changes take effect?
If adopted, the law will come into force on January 1, 2027.
It is also important that after coming into force, this law will have priority even if other special laws provide for higher maximum wage limits.
What does this mean for employers?
If adopted, businesses, government bodies, and HR departments will have to review internal wage regulations, bonus systems, staffing schedules, and approaches to personnel policy.
The draft law could become a point of complete reset of labor relations in the field of remuneration.
Subscribe to our Telegram channel t.me/sudua and to Google News SUD.UA, as well as to our VIBER, Facebook page and Instagram to stay updated on the most important events.
