When Vacation Pay Should Be Paid: Deadlines, Payment Rules, and What the Labor Code Provides

Payment of wages for the period of annual leave is an important guarantee of the employee's labor rights, which directly affects the planning of rest and financial stability during the vacation. That is why the legislation clearly regulates the procedure and deadlines for such payments, establishing mandatory rules for employers.

Therefore, it is important to correctly understand the current norms and changes that have occurred in labor legislation, as they determine the current procedure for paying vacation pay.

The deadlines for paying wages for the vacation period are defined by Article 21 of the Law of Ukraine "On Vacations" and part three of Article 115 of the Labor Code of Ukraine (LCU). These norms are currently in effect as amended by the Law of Ukraine dated July 1, 2022, No. 2352-IX "On Amendments to Certain Legislative Acts of Ukraine Regarding the Optimization of Labor Relations," which came into force on July 19, 2022.

What has changed in the legislation?

Before these amendments, the legislation stipulated that wages for the vacation period must be paid no later than three days before its start. Currently, this provision is no longer in force, and an updated procedure applies, according to which wages for the entire vacation period must be paid to the employee before its start, unless otherwise provided by law, labor, or collective agreement.

How does this work in practice?

• Wages for the vacation period must be paid before the start of the vacation, with the start of the vacation considered the first calendar day specified in the order granting it, but no later than this date;
• Vacation pay can be paid in advance — one, two, three days, a week, or another period before the vacation starts;
• Since the current legislation does not establish a specific date for paying vacation pay, the employer, in agreement with the trade union or representatives of the labor collective (if absent), must determine and fix this deadline in the collective agreement.

Is it possible to pay vacation pay after the vacation has started?

Although the legislation does not explicitly prohibit paying vacation pay after the vacation has started and allows for the possibility of providing a different procedure by labor or collective agreement, the provisions of Article 9 of the Labor Code of Ukraine should be considered. It establishes that terms of labor contracts that worsen the employee's position compared to the labor legislation of Ukraine are invalid.

Deferring the payment of amounts due to the employee to a period after the vacation starts is considered a deterioration of their position compared to the guarantees provided by the legislation regarding the deadlines for paying wages for the vacation period. To avoid labor disputes and conflicts, it is inadvisable to include provisions in labor or collective agreements that contradict the requirements of Articles 115 of the Labor Code of Ukraine and 21 of the Law of Ukraine "On Vacations."

It should also be taken into account that, in practice, state supervisory (control) authorities may consider the payment of vacation pay after the vacation has started as a violation of labor legislation, for which responsible persons may be held liable according to current legislation.

As noted by the Trade Union of Healthcare Workers of Ukraine, such violations of vacation pay deadlines are viewed as a risk to the observance of employees' labor guarantees and may lead to labor disputes and inspections.

What to do in force majeure situations?

Sometimes unforeseen circumstances arise when an employee urgently needs to take leave outside the schedule. In such cases, it is advisable for the employer and employee to timely and properly document the issues of deadlines and procedures for paying vacation pay, taking into account the specific circumstances.

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