Draft of the New Labor Code of Ukraine: What Employers and HR Professionals Should Expect

In early 2026, the Cabinet of Ministers of Ukraine submitted a draft of the new Labor Code, No. 14386, to the Verkhovna Rada. However, it was withdrawn and removed from consideration in July.

The revised version retains a number of ideas from the previous draft but also introduces new rules on employment contracts, fixed-term employment, workplace discipline, leave, dismissal, inspections, and employee monitoring.

In this article, we explain what changes the new draft Labor Code proposes and what they could mean for employers and HR professionals.

Draft New Labor Code: What We Know So Far

The principles underlying Ukraine’s current labor legislation, as reflected in the Labor Code of Ukraine, date back to the Soviet era and no longer meet modern economic conditions. According to the authors of the draft law, the existing labor legislation is burdened by excessive bureaucracy and contradictory secondary regulations.

The proposed labor legislation aims to:

• Increase business flexibility. The need to optimize costs and attract foreign investment calls for modern, flexible forms of work organization, which the new Code seeks to introduce.
• Formalize employment. Simplifying hiring procedures will help reduce informal employment and encourage the wider use of formal employment contracts.

The provisions of the new Labor Code will be aligned with European Union legislation and international legal instruments.

New Labor Code: Key Changes

The draft Labor Code proposes changes in key areas of employment regulation in Ukraine. Let’s look at the main ones.

📝 Mandatory Written Employment Contracts

Currently, a written employment contract is mandatory only in specific cases provided for under Article 24 of the Labor Code of Ukraine. In most cases, employment relationships are formalized through an employee’s application and an employer’s hiring order.

Under the new draft, all employment contracts, regardless of their type, will have to be concluded in writing.

The contract must be:

• Drawn up in writing.
• Written in the official state language.
• Prepared in two copies.
• Concluded before the employee starts work.

The contract will need to specify, among other things, the employee’s job duties, place of work and workplace, salary, working hours, leave entitlements, occupational risks, and grounds for termination of employment.

A transitional period is provided for employees whose employment relationships began before the Code enters into force and were not formalized through a separate written contract.

Such contracts will have to be concluded under the terms and conditions applicable on the date of formalization within one year, or within two years for legal entities employing more than 1,000 people.

The contract must also state that it formalizes the employment relationship established on the date the employee was originally hired by that employer.

🔎 Clear Definition of Employment Relationships and Combating Informal Employment

To reduce informal employment, the draft proposes establishing eight criteria for identifying an employment relationship. If five or more criteria are met, the relationship would be classified as employment.

1. Personal performance of work requiring specific qualifications.
2. Performing work assigned and supervised by the employer.
3. Employer regulation of the work process.
4. Performing work at a workplace designated or agreed upon by the employer, in compliance with internal workplace regulations.
5. Provision of tools, materials, and supplies by the employer.
6. Regular payment of remuneration (salary).
7. Employer determination of working hours and rest periods.
8. Reimbursement by the employer of travel expenses and other work-related costs.

These clear criteria will help distinguish employment contracts from civil-law agreements, including arrangements involving individual entrepreneurs (FOPs).

🔀 Employment Contracts Will Become More Flexible

The draft Code defines nine types of employment contracts and allows provisions from different contract types to be combined in a single agreement. Some of these types are already recognized under the current Labor Code, including zero-hours contracts and remote and home-based work arrangements, but the draft introduces a more systematic regulatory framework. These include:

• apprenticeship employment contracts (combining work and training);
• contracts with non-fixed working hours (payment based on hours actually worked);
• remote and home-based work contracts;
• domestic work contracts;
• temporary agency work contracts.

Written employment contracts will become the standard for employers. This will significantly reduce the risk of misunderstandings and legal disputes.

🗓️ Fixed-Term Employment Contracts: New Restrictions

The new draft proposes limiting the long-term use of successive fixed-term employment contracts.

For the same job function:

• no more than two successive fixed-term contracts may be concluded;
• their total duration must not exceed three years.

If fixed-term contracts are concluded with the same employee for different job functions, their total duration must not exceed five years.

Contracts will be considered successive if the gap between them does not exceed 42 days.

If an employer violates these restrictions, the contract will automatically be deemed an indefinite-term employment contract. The periods between fixed-term contracts will count toward the total duration of the employment relationship but will not be paid.

Exceptions are also provided, including contracts to replace temporarily absent employees, temporarily fill positions subject to competitive selection, perform public works, and employ certain categories of workers.

In addition, employers will be required to:

1. Offer an appropriate permanent vacancy within five days to a fixed-term employee who performs the same or similar work and meets the qualification requirements.
2. Consider an employee’s request for an indefinite-term contract within 30 days after the employee has completed six months of work.
3. Provide a written justification in the event of refusal (the employee may submit another request no earlier than 90 days later).

✍️ Changes to Employment Terms and Conditions

The draft changes the approach to modifying employment terms and conditions. As a general rule, terms specified in an employment contract may be changed only by mutual agreement between the employee and employer.

If the employer insists on changes for economic, technological, structural, or organizational reasons and the employee does not agree, the existing terms will remain in effect.

However, the employer will be able to initiate an economic dismissal procedure.

In such cases, the draft provides for:

• 60 days’ notice (currently two months);
• the possibility of terminating employment under the relevant procedure with severance pay of at least 30 average daily wages.

The draft allows the notice period to be replaced with monetary compensation if at least 15 days remain before it expires:

• by mutual agreement — at least twice the average daily wage for each working day by which the notice period is shortened;
• without the employee’s consent — at least three times the average daily wage for each working day by which the notice period is shortened.

⏸️ Suspension of Employment Contracts Will Become a General Legal Mechanism

Current legislation primarily links the suspension of employment contracts to martial law.

The new draft proposes making it a general mechanism under labor law.

In particular, an employment contract may be suspended if an employee is absent and fails to report the reason for their absence for more than three working days.

In such cases, the employer will be able to formalize the suspension by issuing an order.

🚫 Reprimands Will No Longer Be a Standard Disciplinary Sanction

The draft does not include a system of disciplinary sanctions equivalent to the current Labor Code provisions, under which a reprimand is one of the main disciplinary measures.

A violation will be considered repeated if it occurs within one year of the previous violation. To dismiss an employee for a repeated violation, the employer will need to:

1. Document the first violation in a written report in any format and inform the employee of it within five working days.
2. Issue a written warning within ten days about possible dismissal in the event of a repeated violation.
3. After a repeated violation, give the employee an opportunity to provide an explanation.
4. Complete the dismissal no later than 30 days after discovering the violation and 180 days after it occurred.

🕒 Absence for an Entire Working Day Will Constitute Unauthorized Absence

Under the current Labor Code, unauthorized absence includes being absent from work without a valid reason for more than three hours during a working day.

Under the new draft, unauthorized absence will be defined as absence without a valid reason for the entire working day.

Therefore, an employee’s absence for only part of the working day will not qualify as unauthorized absence under the new rules, although it may be treated as another violation of employment duties.

🕵️ Labor Inspections and Compliance Checks

The draft provides for two forms of state oversight:

1. On-site labor inspections.
2. Remote inspections with the employer’s consent.

The document sets out more detailed rules regarding the grounds for inspections, time limits, inspection authorizations, reports, orders, inspectors’ requests, and appeal procedures.

The general inspection period will be up to ten working days, or up to five working days for employers with no more than 50 employees. The period may be extended in cases specified in the draft.

Inspectors will be allowed to make audio recordings, take photographs, and record videos without the individual’s consent. Employers will also have the right to record inspections using audio, photo, and video equipment.

If an employer fails to provide documents in response to an inspector’s written request within the specified period, the relevant facts may be established based on available documents and information. These findings will be considered accurate unless the employer proves otherwise or a court rules differently.

💵 Higher Penalties for Undeclared Employment

Under current legislation, the fine for allowing an employee to work without a formal employment contract is equivalent to 10 minimum monthly wages per employee. For single-tax payers in Groups I–III, a warning is issued for the first violation.

The draft proposes:

• 15 minimum monthly wages — for each undeclared employee;
• 30 minimum monthly wages — for a repeated violation;
• eliminating the separate warning provision for single-tax payers.

What Will Change for Employers and HR Professionals?

The new draft Labor Code proposes both greater formalization of employment relationships and new opportunities for employers.

For employees, the proposed changes include:

• 28 calendar days of basic annual leave;
• new paid parental leave to care for a child up to the age of eight — two months for each parent;
• restrictions on the use of successive fixed-term contracts;
• additional safeguards regarding changes to employment terms and conditions;
• rules on monitoring work email and video surveillance.

At the same time, additional social leave for employees with children will be reduced from 10 to 7 days (no more than 10 days where multiple grounds apply), and unused days generally cannot be carried over to the following year.

Key changes for employers will include:

• mandatory written employment contracts;
• clear criteria for determining employment relationships;
• the ability to regulate non-disclosure agreements (NDAs) and certain non-compete agreements in greater detail;
• new rules for dismissal on economic grounds;
• the possibility of increasing overtime to 250 hours per year under collective arrangements (with a general limit of 180 hours instead of the current 120);
• a new system of state labor oversight;
• higher penalties for violations of labor legislation.

This will require reviewing employment contract templates, HR documents, internal policies, and procedures for changing employment terms, dismissals, working time records, and leave management.

When Will the Changes Take Effect?

The new Labor Code is not yet in force. Draft Law No. 16010, submitted by the government on September 2, 2026, is awaiting consideration at a plenary session of the Verkhovna Rada. On September 25, 2026, the relevant parliamentary committee recommended adopting it as a basis for further consideration and rejecting the alternative Draft Law No. 16010-1. The text may undergo significant changes before the second reading.

The alternative Draft Law No. 16010-1 was registered by Members of Parliament on September 16, 2026. It proposes recognizing a relationship as employment if three of the eight criteria are met, retaining the annual overtime limit of 120 hours, maintaining 10 days of additional social leave for employees with children, preserving reprimands as a disciplinary sanction, and establishing employees’ right to disconnect.

Therefore, employment relationships continue to be governed by existing legislation, including the current Labor Code of Ukraine.

Digitalization of Employment Relationships

Government-led digitalization of the labor market complements the processes that Ukrainian businesses are already implementing in practice. Electronic HR document management allows employers to digitize not only individual documents but also entire HR workflows — from hiring and leave management to transfers and dismissals.

For example, Vchasno Kadry helps automate HR administration and manage documents online. The service allows companies to configure approval workflows, roles, and access permissions, maintain employee profiles, manage hiring, transfers, and dismissals, administer leave, and sign HR documents using electronic signatures.

Vchasno Kadry also supports digital onboarding: candidate information can be collected online, including through Diia Sharing, used to create a digital employee profile, and automatically incorporated into HR documents without having to enter the same information repeatedly.

For employees, this means being able to submit requests and sign documents directly from their smartphones. For HR professionals, it means managing HR processes and documents within a single system.