Payment of wages: terms, periodicity of payment and fines for untimely payment of salary

by Feb 4, 2020

First and foremost, every enterprise should be paid employees.
   Terms and periodicity of salary payments are regulated by Part 1 and Article 2 of Article 115 of the Labor Code and Part 1 and 2 of the Law of Ukraine “On Labor Remuneration”.

  1. Thus, in the said normative legal acts it is stated that employers are obliged to pay wages to employees at least twice a month, due to a period of time that does not exceed 16 calendar days.
It is worth noting that the labor law establishes the minimum amount of salary payments per month. Therefore, in a statutory act, an enterprise or a collective agreement may provide for wage claims more than twice a month, for example, once a week or every ten days. Under the terms of labor law, the employer’s obligation is to pay wages at least twice a month, regardless of the employee’s consent or desire to receive a salary once a month. Otherwise, the employer is considered an offender.
What to do in case of getting a wage earner by cash in cash? In this case, the employer should ensure the withdrawal of the amount of the advance in the bank and redeem this amount at the company’s cash desk. In case of non-receipt by the employee of an advance payment in cash, after 5 working days the employer makes a register of the deposited amounts and loses the amount of advance received by the employee not received by the employee in the bank and pays it with the salary for the second half of the month.
The employer is liable for violations of labor laws and in the case where the employee did not receive wages for the first or second half of the month due to lack of necessary funds in the enterprise account.
  2. The Labor Code provides that employers are obliged to pay wages to employees not later than 7 days after the expiration of the period for which the payment is made.
The specified condition should be observed both for the advance, and for wages in the second half of the month.
In accordance with the provisions of this norm, the advance must be paid not later than the 22nd of this month, salaries for the whole month are paid not later than the 7th day of the month following the current month (the month of payment of salary).
At the same time, it is not necessary to forget to observe the conditions for 16 calendar days between payment of wages. This means that it is prohibited to pay the salary for the first half of the month, for example, the 15th, and in the second half of the month, the 6th day, as the number of calendar days between these payments is more than 16.

  3. Employers must pay wages on working days. If the day of payment of salaries coincided with the festive / non-working day or the day off, the salary must be paid before the day before.
At the same time, the next payment of wages will be made on the dates specified in the collective agreement or other regulatory act of the enterprise.
It should be noted that in this case, the gap between wage payments may exceed 16 calendar days and this will not be considered a violation.

  Responsibility
   For legal entities and individual entrepreneurs who use hired labor, fines are imposed in the following amounts: 3 minimum wages (as of May 2019 – UAH 12,519) – for violation of the established time limits for payment of wages to employees, other payments provided for by labor legislation , in more than one month, the payment is not in full.
Article 41 of the KUpAP provides for administrative liability for violation of the established time periods for payment of wages, for the payment of wages not in full amount, which results in the imposition of a fine on officials of enterprises, institutions and organizations irrespective of the form of ownership and individual entrepreneurs from 30 to 100 tax-free minimum incomes of citizens.
Violation of the conditions for payment of wages provides even criminal liability. Thus, in accordance with Article 175 of the Criminal Code unreasonable non-payment of wages to citizens in more than one month, committed deliberately by the head of an enterprise, institution or organization irrespective of the form of ownership, provides for punishment in the form of:

  • a fine of 500 to 1000 non-taxable minimum incomes of citizens;
  • corrective labor for a term up to two years;
  • imprisonment for up to two years;
  • with the deprivation of the right to occupy certain positions or engage in certain activities for a term up to three years.

   If failure to pay due to misuse of funds intended for payment of wages is punishable as a fine of 1000 to 1500 non-taxable minimum incomes, or restraint of liberty for a term up to three years, or imprisonment for a term up to five years, with deprivation of the right to occupy certain positions or engage in certain activities for a term up to three years.
Thus, with the aim of avoiding responsibility for the untimely payment of wages to an employee, it is necessary to comply with the terms and conditions stipulated by labor legislation.

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