The fact of delayed wages in Ukraine is hardly understandable for many citizens of western countries. In fact, many workers are being paid for September or even August in November. How is it possible?

How the debt in wages accumulates

The system of delayed salaries formed for years and now it’s not surprising for Ukrainians when the company pays remuneration for August in September of even October.

Remember also that salaries in Ukraine are not paid weekly but monthly. Once an employee has worked for a month, he or she is supposed to be paid in the first week of the following month. However, it doesn’t happen for many workers.

At first, the salaries are delayed for days, then weeks, then months. There is no requirement for employers to pay interest on delayed remuneration, so this is another instrument for company to manage the cash flow in the business.

It is only now the government of Ukraine plans to introduce the law that would require employers to pay interest on delayed wages, Finance.ua reported.

The law has been drafted by the Ministry of Social Policies of Ukraine. It proposes to charge for every day of delay in remuneration over 15 days. The interest should be equal to the current default level as set by the Bank of Ukraine. The law would also allow employers to stop fulfilling their responsibilities until the salary debt is rectified by the employer.

In the case of bankruptcy of the company, the employees would be eligible to be paid up the amount equaling 3 monthly salaries.

It is not the first attempt to regulate delays in wages with the view to protect the workers. There was such legislation introduced in 2014 but the Ukrainian parliament rejected it.