Effective June 10, 2021, the Law of Ukraine “On Amending Certain Legislative Acts of Ukraine on Registering an Employee’s Labor Activities in Electronic Form” No. 1217-IX dated February 5, 2021 (hereinafter — Law No. 1217).

The start of this Law is the beginning of the end of the usual paper employment record books, which were used to fix labour relations.

 

The transition to electronic accounting will last for five years. This is exactly how much time is allocated for the Pension Fund to include missing information about employees’ work activities in the Register of Insured Persons of the State Register.

 

From June 10, 2021:

  • the 5-year period for submitting scanned copies of employment record books begins;
  • you must comply with the new rules of dismissal from work – issue a copy of the order to terminate the employment relations on any basis of dismissal;
  • entries in the paper employment record book are made only at the request of the employee;
  • all entries that were previously made in the paper employment record book must be entered in the electronic register through the PFU portal;
  • the employer will no longer keep employment record books, they remain with the employee;
  • we determine whether an employee is accepted to the principal place of work or part-time, already at the request of the employee, and not upon submission of the employment record book;
  • the (non-) accrual of USC in the amount of at least the minimum is affected by such a statement.

 

Within five years, employers for employees or employees for themselves will be able to transfer missing information about their employment to the Pension Fund in electronic form.

Transfer via the Pension Fund’s electronic services web portal (portal.pfu.gov.ua).

 

There will be two options available (!):

  • in the form of scanned copies of employment record books. Go to the Personal account on the PFU web portal. In the section “Communications with PFU”, select the service “Information about the employee’s work activity”. Read the instructions and go to the Downloads section. Filling out the form for your employee. Attach (1) scanned copies of the employment record book and (2) a scanned copy of the employee’s consent to the processing of personal data. Scanned copies must be clear and contain pages in chronological order. The recommended scanning resolution must be 300 dpi. The image format must be jpg or pdf; the size of each file must not exceed 1 MB;
  • in the form of digitized copies of the employment record book — by creating a corresponding entry in the personal account of the insurer or insured person on the web portal of electronic services of the Pension Fund.

 

 

 

 

 

 

In other words, it will be possible to enter information about employment from the employment record book in the section “Information about employment” and add scanned copies of the documents based on which the records were made. This is a more time-consuming option.

 

In any case, we advise you to take your time. PLEASE NOTE!

The Pension Fund must establish the procedure and deadlines for submitting employment information.

This is explicitly stated in clause 2, Section II of Law No. 1217.

If we talk about the deadline for submission, then, presumably, the PFU will first want to get information about the work experience of those employees who do not have long left before retirement. However, the young people will be left for later. After all, it is not enough to get information (including scanned copies of documents). It must be adequately processed.

 

What personnel issues do employers face starting from June 10, 2021?

 

Let us start with those employees who, as of June 10, 2021, are in employment relations with an employer (legal entity or individual entrepreneur).

 

Employer-legal entity. Here, the issue of providing information about employees’ work activities to the Pension Fund comes first.

 

Of course, the legislator does not establish the employer’s obligation to send such information. They can be received by the Pension Fund directly from the insured person, i.e. the employee.

Nevertheless, employers-legal entities keep their employment record books. You cannot just give them to employees. In this case, employers-legal entities will probably have to fill in the Register of Insured Persons with missing information.

 

PLEASE NOTE!

 

After providing information to the Pension Fund, we issue the existing employment record books at the enterprise to employees against signature. Even if there is only a record of employment. Note that now there is no explanation of where exactly the employee must put their signature on receiving the employment record book.

 

For this purpose, the Accounting Log for Movement of Employment Record Books and inserts thereto (Standard Form No. P-10) is suitable. In column 12 of this Log, the responsible person of the employer may indicate the date of providing information and the basis for issuing the employment record book, for example: “June 21, 2021, clause 2, Section II of Law No. 1217-IX dated February 5, 2021“, and in column 13, the employee will put their signature on receiving the employment record book.

 

Further, information about employment will be generated electronically. An employee can request the employer to enter information about their work and incentives and awards for success in their work (if any) in their employment record book. And the employer will be obliged to fulfil this requirement.

 

However, the employer does not keep the employment record book. One made an entry and gave it to the employee. If an employee who was hired before June 10, 2021 leaves, but has not yet been transferred information about their work activity to the Pension Fund. In this case, we proceed according to the usual old scheme. On the day of dismissal, we make a final payment with the employee and issue him/her a duly completed employment record book with a record of dismissal from work.

We also give the employee a copy of the dismissal order.

 

 

 

 

 

 

 

PLEASE NOTE!

 

Providing the employee with a copy of the dismissal order on the day of dismissal becomes the responsibility of the employer. Having an employment record book on hand, he/she can also transmit information about their work activity to the Pension Fund through the insured person’s office on the web portal of electronic services of the Pension Fund.

 

Employer-individual entrepreneur. He/she does not keep employees’ employment record books. Labour documents are on the hand of employees. Therefore, nothing prevents the latter from submitting information to the Pension Fund independently without the participation of an entrepreneur.

 

If we dismiss an employee on June 10, 2021 or later, be sure to ask him/her if he/she has passed on information about their employment to the Pension Fund.

 

If:

  • no, we make an entry about the dismissal in the employee’s employment record book and give him/her a copy of the dismissal order;
  • yes, we issue a copy of the dismissal order to the employee. Nevertheless, we make an entry about dismissal in the employment record book only if the employee desires so.

We work with employees who are hired from June 10, 2021 or later under the new rules.

 

PLEASE NOTE!

 

When applying for employment, the person will provide the employer with either an employment record book (if any) or information about employment from the Register of Insured Persons.

 

What kind of information is this? Will they be relevant for the employer when hiring an employee? It is hard to say. After all, today, the Pension Fund draws information about employment from Appendix 5 (D5) of the Joint Report. This report is quarterly. Therefore, PFU employees learn about labour news (acceptance/transfer/dismissal) with a significant delay.

 

In any case, the employer must comply with the requirement of the Labour Code. Therefore, if the employee does not provide an employment contract, we send him/her to the Pension Fund.

 

You need to understand how to hire an employee: at the principal place of work or part-time.

The Law on USC stipulates that the principal place of work will be the one that is determined by the employee as the main one according to the submitted application (before the withdrawal).

 

What kind of application is this, and to whom is it submitted? In the application for employment, we ask the employee to indicate the form of employment clearly: at the principal place of work or part-time, he/she is employed.

 

We recommend that you ask the employee for an employment record book when applying for a job and then act ad hoc.

If the employment record book is located:

  • at another employer, since, according to the employee’s information, information about their work activity has not yet been transmitted, we understand that we will be able to accept this employee exclusively on a part-time basis. Therefore, we ask him/her to indicate this form of employment in the work status.
  • We send an employee to the Pension Fund to get information about their employment since it is this Fund that keeps the Register of Insured Persons;
  • on hand of the employee, then:

1) we find out from him/her whether he/she does not work based on an employment contract at another enterprise (at an individual entrepreneur). We carefully study the employment record book, whether there is an entry in it when applying for a job without a record of dismissal. If there is, please provide a copy of the dismissal order (such an order is not provided for in the Labor Code);

2) please indicate in the application for employment the form of employment: full-time or part-time

 

Please note!

 

If an employee provides an employment record book, the employer has the right to read it and then must return it to such an employee.

 

The fact is that Article 48 of the Labor Code stipulates that the employee’s employment record book is kept.

The employee may ask the employer to enter information about the job or promotion in the employment record book. You cannot refuse!

 

Make entries in the employment record book and give it to the employee for safekeeping.

 

About scanned copies and providing employment information. Since the employee has an employment record book on hand, if required, he/she will be able to provide the necessary information about the work experience to the Pension Fund. Therefore, you do not need to scan for new employees.

 

However, if you want, you can help them. For this, you will be able to calculate the insurance length of service for sick leave only according to the data of the Register of Insured Persons of the State Register, including the data available in it on the labour activity of employees. Such changes to the recording of sick leave will be made in Part 2 of Article 21 of the Law on Social Insurance.

 

If you do not want to help, do not have time for it, or the employee wants to scan on their own, we recommend that you make a copy of their employment record book before giving it away. In case the employee gets sick, and the calculation requires insurance experience, but it is not in the State Register because the employee did not transfer it, and you do not have the employee’s employment record book.

 

However, what if the employee does not have an employment record book, but he/she wants to start one because he/she does not trust technological progress? No problem! Even if an employee is applying for a job for the first time and does not have an employment record book, he/she can apply to the employer with a request to issue it. And again, the employer will not have the right to refuse.

 

It should be noted that the Cabinet of Ministers of Ukraine will have to determine the procedure for maintaining employment record books in the new conditions. Therefore, perhaps very soon, we are waiting for changes here as well. However, it is clear that it is too early to talk about the final farewell to paper employment record books.