In accordance with the legislation, salary is paid regularly on working days within the timeframe set by collective agreement or employer’s normative act, agreed with the elective body of the primary trade union organization or other authorized representative for the labor collective body (and in the absence of such bodies − representatives, elected and authorized by labor collective), but not less than twice a month over a period of time not exceeding 16 calendar days and not later than seven days after the expiration of the period for which the payment is made. However, some companies may delay payment of salaries to employees for various reasons.What kind of liability to be for such an employer − in the following.
Verification of financial information
In case of delayed payment of salary, the owner or an authorized body thereof is obliged, at the request of the elected trade union bodies, to submit written permission to receive information from banks on the availability of funds in the accounts of the company, institution, organization or to obtain such information from banks and provide it to the trade union body.
In case of refusal by the owner or an authority authorized by him/her to provide such data or permission to receive information on his/her actions or inaction can be appealed to the court (Art. 251 of the Labor Code, hereinafter − Labor Code).
Payment of compensation
If a company, organization or institution nevertheless did not meet the terms of payment of wages and owed salaries to employees, on the basis of requirements of Art. 34 of the Law of Ukraine “On Labor Remuneration” of 24.03.1995 No. 108/95-ВР (hereinafter − the Law on Labor Remuneration), it is obliged to compensate employees for the loss of part of their salary in connection with violation of terms of its payouts. Compensation is made taking into account the index of growth of prices for consumer goods and tariffs for services in accordance with the procedure established by the current legislation.
On the basis of para. 9 of sec. 1 of Art. 134 of Labor Code, head of the company, institution, organization of all forms of property, guilty of untimely payment of wages for more than one month, which led to compensation for violating the terms of its payment, and provided that the State Budget of Ukraine and local budgets, legal entities of state ownership have no arrears to this company, is financially liable in the full amount of damage caused by their fault to the company, institution, organization. This position is set out in detail in the letter of the Highest specialized court of Ukraine on consideration of civil and criminal cases “Generalization of the practice of using the courts of legislation regulating the material liability of employees for the damage caused to the employer” of 01.09.2015.
Payment of fines
In addition, one should not forget about the presence of Art. 265 of the Labor Code, according to which legal entities and individuals − entrepreneurs who use hired labor, are liable in the form of a fine:
- in the amount of one minimum wage at the time of detection of the violation (in 2017 − UAH 3 200.00), provided that the period of payment of wages for the first part of the month is missed less than a month (para. 8 of sec. 2 of Art. 265 of the Labor Code);
- in the case of breach of established time limits for the payment of wages to employees, other payments provided for by the labor legislation, for more than one month, their payment is not fully paid − in the amount of three times the minimum wage established by law at the time of detection of the violation (para. 3 of sec. 2 of Art. 265 of the Labor Code) (in 2017 − UAH 9 600.00).
Article 265 of the Labor Code does not define the limitation period for bringing economic entities to liability for violations of labor legislation.
In accordance with para. 3 of Art. 265 of the Labor Code, fines, which imposition is provided for in para. 2 of Art. 265 of the Labor Code, are financial sanctions and do not fall under the administrative and economic sanctions defined in para. 27 of the Commercial Code of Ukraine of 16.01.2003 No. 436-IV (hereinafter − CCU), they are not subject to the norms of Art. 270 of CCU: the application of fines within six months from the date of detection of the violation, but not later than one year from the date of its commission.
Officials authorized to exercise control over the observance of labor legislation have the right to take a decision on imposing fines provided for in para. 2 of Art. 265 of the Labor Code, irrespective of the date of the commission of the offense and/or the date of its detection.
Administrative liability
In addition, it should be noted that there are time limits for imposing administrative liability under Art. 38 of the Code of Ukraine on Administrative Offenses of 07.12.1984 No. 8073-Х (hereinafter − CAO):
- for one-time violations − within two months from the date of their commission;
- for continuing violation − no later than two months from the date of detection.
That is, if the company violated the terms of payment of wages once, for example, did not pay salary in September 2017, an administrative fine may be imposed on officials only in October-November 2017. Controllers will not be able to impose fines under these conditions in December 2017.
If the company did not constantly pay salaries for the first half of the month, for example, in September, October, November 2017, then it is possible to impose an administrative fine in December 2017.
An administrative fine for violating the terms of payment of wages and salaries not in full in accordance with Art. 41 of CAO is from 30 to 100 non-taxable minimum incomes of citizens (hereinafter − NTMIC) (from UAH 510.00 to 1 700.00).
A repeated breach of one year or a violation of the payment of wages or payments in full in respect of a minor, a pregnant woman, a single parent, a mother or a person who substitutes for them and educates a child under the age of 14 or a disabled child entails an administrative fine in the amount of 100 to 300 NTMIC (from UAH 1 7000.00 to 54 000.00).
Criminal liability
Also, be aware of criminal responsibility in the following cases:
- unreasonable non-payment of wages in more than one calendar month, intentionally committed by the head of a company or a private entrepreneur, entails a fine from 500 to 1 000 NTMIC (from UAH 8 500 to 17 000) or correctional labor for a term up to two years, or imprisonment for up to two years with the prohibition to occupy certain positions or to carry out certain activities for a term up to three years (para. 1 of Art. 175 of the Criminal Code of Ukraine from 05.04.2001, No. 2341-ІІІ (hereinafter – Criminal Code);
- unreasonable non-payment of salary in more than one month, committed intentionally by the head of the company, if such non-payment was the result of misuse of funds allocated for these purposes. The fine is from 1 000 to 1 500 NTMIC (from UAH 17 000 to 25 500) or restraint of liberty for a term up to three years, or imprisonment for a term up to five years with the prohibition to hold certain positions or to carry out certain activities for a term up to three years (para. 2 of Art. 175 of Criminal Code).
It should be noted that according to the Criminal Code it is necessary to prove the existence of intent. In this case, its characteristic features are:
- awareness of the employee of the social harm of his/her behaviour;
- anticipation of negative consequences of such behaviour;
- desire for harmful consequences as a result of such behaviour or their conscious admission.
