Work, residence permit processes to undergo major overhaul

21 Sep 17

UKRAINE

IMPACT – MEDIUM

What is the change? Ukrainian officials will soon implement a major overhaul of some of the country’s key immigration programs.

What does the change mean? Effective Sept. 27, Ukrainian officials will enforce new rules for the country’s work permit and temporary residence permit programs. The changes will affect documentation requirements, validity periods, salary minimums, processing times, filing deadlines and fees and government rules on how permit applications will be adjudicated and when companies must provide notice of a change.

  • Implementation time frame: Sept. 27.
  • Visas/permits affected: Work permits and temporary residence permits.
  • Who is affected: Employers and foreign nationals looking to obtain or renew a work permit or temporary residence permit in Ukraine.
  • Impact on processing times: The new rules should improve processing times for both work permit and temporary residence permit renewal applications.
  • Business impact: The changes will ease some administrative requirements for businesses, but companies must be sure to follow all new rules in order to avoid unnecessary delays when submitting applications.

Key information: The changes will be introduced under a law passed in May of this year. The law includes major changes to both the work permit and temporary residence permit processes.

Among changes to the work permit program, the law will:

  • Alter documentation requirements. Health certificates and police clearances will no longer be required. Copies of university diplomas will only be required for applicants who have graduated from top 100 universities (as specified in international rankings used by the Ukrainian government). Employers will no longer be required to submit separate documentation confirming that the job does not need to be filled by a Ukrainian citizen and does not require access to Ukrainian state secrets. Instead, this document can be provided in the work permit application.
  • Require inclusion of a draft employment agreement. Employers will be required to include a draft employment agreement when submitting work permit applications. The existing requirement that copies of final employment agreements be provided once they are executed will remain in place.
  • Introduce a minimum salary threshold. Employers will be required to pay foreign employees at least 10 times the statutory minimum wage for Ukrainian workers. Currently, the wage minimum for Ukrainian workers is 3,200 hryvnias (about US$122) per month. This means the salary minimum for foreign employees will be 32,000 hryvnias per month. Exceptions will be made for foreign employees working at non-governmental organizations, charities, schools or other educational institutions. Employees working at such organizations will be required to receive a salary of at least 16,000 hryvnias per month. Wage requirements will not apply at all to graduates of top 100 universities, IT professionals working at software companies, employees working on projects that will result in copyrighted material or patented goods, or those who are founders, shareholders or ultimate beneficiary owners of the employer.
  • Introduce a new three-year work permit. Work permits valid for three years will be available to highly paid professionals (those making 50 times the Ukrainian salary minimum), graduates of top 100 universities, IT professionals working at software companies, employees working on projects that will result in copyrighted material or patented goods, or those who are founders, shareholders or ultimate beneficiary owners of the employer. In some cases intra-corporate transferees will be eligible for work permits of longer than three years, if the period of their assignment lasts longer than three years. The validity period for non-ICTs and for workers who do not qualify for three-year work permits as described above will be one year, renewable an unlimited number of times.
  • Ease requirements on when foreign nationals must obtain separate work authorization. Highly paid professionals (those making 50 times the Ukrainian salary minimum) will not be required to obtain separate work authorization for secondary employment, provided that the term of their secondary employment does not exceed the validity period on their work permit. Additionally, all work permit holders will be allowed to perform temporary duties for a colleague who is absent from his or her job. Such “double hatting” will be allowed provided it does not last longer than 60 days cumulatively within a calendar year.
  • Tighten notification requirements. Employers will be required to notify authorities within 30 days if (1) the company changes its name or undergoes a significant reorganization; (2) the employee’s job title changes; or (3) the employee obtains a new passport.
  • Permit renewal applications to be filed earlier. The law abolishes a provision that requires that renewal applications be filed no more than 40 calendar days before a work permit expires. It will be possible to file renewal applications more than 40 days, but not less than 20 days, before a work permit expires.
  • Shorten processing times for work permit renewals. The government standard for processing work permit renewals will be shortened from seven to three calendar days.
  • Introduce a new fee schedule. Fees will be pegged to Ukraine’s minimum subsistence wages, rather than its minimum statutory salaries. Fees for permits issued for up to six months will be the equivalent of two minimum subsistence wages (currently 3,200 hryvnias). Fees for work permits issued for between six and 12 months will be the equivalent of four minimum subsistence wages (currently 6,400 hryvnias). Fees for work permits issued for between one and three years will be the equivalent of six minimum subsistence wages (currently 9,600 hryvnias).

Besides changing application processes, the law will also change how authorities adjudicate work permit applications. Under the new rules, work permits will only be denied if (1) the employer fails to correct application deficiencies, (2) misses the deadline for submitting renewal applications or (3) if the employer is absent or in the process of being removed from the public register of business entities.

Among changes to the temporary residence permit program, the law will:

  • Allow foreign investors to become eligible for temporary residence permits. Foreign nationals who make significant investments in Ukraine will, for the first time, be eligible for temporary residence permits. Those with a confirmed investment of at least  €100,000 in a Ukrainian company will be eligible for temporary residence permits valid for two years.
  • Introduce a new three-year temporary residence permit. Temporary residence permits will correspond to the validity period of the foreign national’s work permit, including the new three-year work permit for highly paid professionals and other qualifying applicants (as described above).
  • Allow third parties to apply on behalf of a foreign national. The law explicitly allows third parties (i.e., proxy holders) to apply for temporary residence permits, including renewals, on behalf of a foreign national. The permits still must be picked up in person by the foreign national receiving the permit.
  • Change the deadline for submitting a renewal application. The law provides a deadline for submitting a renewal application of 10 days before the permit expires, as opposed to the current deadline of 15 days before the permit expires.
  • Shorten processing times for work permit renewals. The government standard for processing temporary residence permit renewals will be shortened from 15 to 10 calendar days.

Additional changes in the coming weeks and months should be expected. The law will have the effect of cancelling or updating a number of existing decrees that govern work permit and temporary residence permit processes, meaning additional directives are likely to be issued once it takes effect. Some points remain uncertain at this time, including whether companies will continue to be required to advertise job vacancies before recruiting a foreign national to fill the position.

BAL Analysis: Employers should become familiar with the new rules and anticipate additional changes in the weeks and months ahead. Applications that do not adhere to the new rules risk being delayed or rejected. BAL will continue to follow developments in Ukraine, including the expected promulgation of additional regulations governing work permit and temporary residence permit processes.

This alert has been provided by the BAL Global Practice group and our network provider located in Ukraine. For additional information, please contact your BAL attorney.

 

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