Hello, dear employers!
UAtalents team together with White&Case company collected frequently asked questions and prepared information about how to hire Ukrainians as a Slovak employer. We want to give you more understanding of how it works in Slovakia. Generally, we divided information into 5 different topics and so each topic we are going to analyze each separately:
- Residence and work permit;
- Employment contract;
- Social security insurance;
- Remote regular employee;
- Remote contract employee.
So, let's understand in more detail!
Residence and work permit
- Are Slovak employers allowed to employ refugees from Ukraine?
However, refugees who have been granted temporary refuge (in Slovak: dočasné útočisko), asylum (in Slovak: azyl), subsidiary protection (in Slovak: doplnková ochrana), or refugees for whom an asylum procedure has been initiated (this applies only during the emergency situation, which was declared in connection with the mass influx of foreigners into the territory of the Slovak Republic, caused by the armed conflict in the territory of Ukraine, or refugees who are asylum seekers and 6 months have elapsed since the commencement of the proceedings) may work in the Slovak Republic without the need for work permits.
Temporary refuge includes a work permit by legal default. Generally, temporary refuge may be issued until 4 March 2023 and its validity shall be automatically extended for an additional period of up to 6 months (the overall validity cannot exceed 1 year). Depending of the situation, the government may decide to shorten or lengthen the temporary refuge. The issuance of the temporary refuge may be granted immediately or within 30 days of filing the application (if justified, the authorities may lengthen the period for another 30 days, even repeatedly). Temporary refuge may be granted to (i) Ukrainian nationals and their family members; (ii) foreigners who are not citizens of Ukraine but who obtained permanent residence in Ukraine before 24 February 2022, who are not able to return to their country or region of origin under safe and stable conditions and their family members, and (iii) foreigners who are not citizens of Ukraine but who obtained international protection or equivalent national protection in the territory of Ukraine before 24 February 2022.
Ukrainian refugees granted with temporary refuge may be employed on the basis of a standard employment contract as well as on the basis of agreements on work carried out outside the employment (in Slovak: Dohoda o prácach mimo pracovného pomeru).
For completeness, further specific provisions and obligations related to the employment of third-country nationals are mainly stipulated in Act No. 5/2004 Coll. on employment services and on the amendment and supplementation of certain acts, as amended (the “Employment Services Act”), in particular, Sections 23a and 23b of the Employment Services Act.
A breach of the obligations under the relevant employment legislation applicable in the Slovak Republic may result in the imposition of a fine of up to EUR 200,000 on the employer.
2. Is there a possibility to employ refugees before they receive a visa?
Yes. Obtaining a visa is not substantive from this perspective. People seeking refuge from conflict in Ukraine can enter the Slovak Republic even without valid travel documents (e. g., biometric passport or visa). Ukrainian refugees are allowed to temporarily stay in the Slovak Republic for up to 90 days without the need to apply for temporary refuge, a visa or a temporary/permanent residence permit.
In the event that such Ukrainian refugees intend to work here, they must apply for a permit or they must grated such permit (depending on the specific permit, as further described below).
With respect to asylum, it is possible to employee refuges even before being granted such asylum. An applicant for asylum who is a citizen of Ukraine or a family member of a citizen of Ukraine may enter into an employment relationship within nine months from the commencement of the asylum assignment procedure during the emergency situation declared in connection with the mass influx of foreigners into the Slovak Republic caused by the armed conflict in the territory of Ukraine. A family member of a Ukrainian citizen means a spouse of a Ukrainian citizen and a parent of a minor child who is a Ukrainian citizen.
With respect to temporary refuge, an employer may employ such refugees only after they have been granted temporary refugee. Ukrainian refugees who have been granted temporary refuge enjoy the same access to the labour market as Slovak citizens (except for civil servants). As a result, they may enter into employment relationships with local employers without first obtaining a vacancy certificate corresponding to a highly qualified occupation, a vacancy certificate or a work permit
3. Which documents must the employer request from the employee?
The employer is obliged to request a respective permit from the third-country national (e.g. a permit granting temporary refuge, other forms specified in point 1 above) and to keep a copy of such document for the duration of employment of the third-country national.
The employer must inform the competent Office of Labour, Social Affairs and the Family (the “Labour Office”) (determined by the place of employment) of the employment of a person granted temporary refuge by completing and submitting the information card form within 7 business days of the commencement of employment. The information card form will also be used by the employer to inform the competent Labour Office of the termination of employment. In such an event, the information card form must be submitted no later than 7 business days after the termination of employment. Furthermore, the employer is obliged to request that the Ukrainian refugee present confirmation proving that they were granted temporary refuge status and to keep a copy of such confirmation at least until the termination of employment.
- Is it necessary to provide an employment contract in Ukrainian language?
No. The employment contract may be in Slovak only. It would also be feasible to provide an English language employment contract. In any case, in accordance with the general principles of Act No. 311/2001 Coll., labor code, as amended (the “Slovak Labuor Code”), it is recommended that the employer makes sure that the employee understands the language and the content of the agreement (e.g. based on a confirmation from the employee).
2. Does the employment contract need to provide for specific provisions?
There do not appear to be any specific contractual provisions which the employer should aware of. An employment contract must contain standard statutory provisions pursuant to the Slovak Labour Code (as applicable to all employment contracts).
The employer may not employ a Ukrainian citizen without an appropriate permit (as set out in point 1 above). It is therefore recommended to stipulate that the commencement of the employment is subject to the condition precedent that the Ukrainian refugee provides such document.
Social security insurance
- Do Slovak employers have to pay social security contributions for employed Ukrainian refugees?
Yes. The Slovak labour law provisions apply to Ukrainian citizens employed in the Slovak Republic. All Ukrainian employees in the Slovak Republic are subject to Slovak social security laws like any other employee. This includes compulsory Slovak health and social insurance. Therefore, the employer is obliged to pay the statutory employer contributions for Ukrainian refugees as well.
2. Which documents must the employer request from the Ukrainian refugee?
The employer must request a copy of the permit (e.g. a document indicating the granting of temporary refuge) from the Ukrainian refugee. The employer must fulfil its registration obligations in this respect via submitting the registration list of a natural person (in Slovak: registračný list fyzickej osoby) to the Social Security Agency (in Slovak: Sociálna poisťovňa). Such registration list contains various information about the employee (such as e.g. personal information or bank account information). In case a Ukrainian employee has not been assigned a personal ID number, the employer shall submit the registration list in paper form (not electronically) and the Social Security Agency will generate a social security number to such Ukrainian employee for this purpose.
Remote regular employee
- Is it feasible for an employer in the Slovak Republic to employ Ukrainian citizens that still reside in Ukraine as (regular) employees?
It is feasible for a Slovakia-based employer to remotely employ Ukrainian citizens who still live in Ukraine. In general, the employment relationship would then be governed by Ukrainian employment, tax and social security law. For this reason it is recommended to employ Ukrainian individuals under a Ukrainian employment law contract, as the relevant Ukrainian law would apply anyway. However, please see the next section “Engagement of Ukraine-Based Private Entrepreneurs” for an alternative approach to classic employment.
2. Is it possible to remotely employ Ukrainian citizens that reside in a neighbouring country of Ukraine as (regular) employees?
It is also feasible to remotely employ Ukrainian citizens that have fled to neighbouring countries such as Poland, Hungary or Moldova. If the country is a member state of the European Union, the employment contract will be governed by the law of the country that the parties determine. If the applicable law is not determined by the parties, the contract will be governed by the law of the country in which the work is performed. Furthermore, the choice of law may not result in a less favourable employment regime for the employee.
If the country is not a member state of the European Union, the labour law of the country in which the Ukrainian citizen works will apply.
3. Is the employer of a (regular) employee obliged to pay tax in Ukraine?
The Slovak Republic and Ukraine entered into a double taxation treaty, according to which, the profits of a resident in one treaty country are generally only taxed in such country. However, if the enterprise has created a permanent establishment in the other country, the profits allocated to such permanent establishment are taxed in the country in which the establishment is situated. A case-by-case analysis of the tax law situation from a Ukrainian tax law perspective is recommended.
Remote contract employee
- Is it feasible for a company based in the Slovak Republic to employ a Ukrainian citizen that still resides in Ukraine as an independent contractor?
Yes, in general, an individual can be engaged as an (independent) “private entrepreneur” if such individual is materially independent from the instructions of the principal. The individual is responsible to register as such private entrepreneur. In such case, the individual would be responsible for paying income tax in Ukraine. Payments by the principal could be made to a bank account in Ukraine in Euros or US Dollars. Invoices are generally not subject to VAT in Ukraine, as the services would be provided to non-resident.
2. Is the employer (principal) of a Ukraine based private entrepreneur obliged to pay tax in Ukraine?
This is generally not the case. In the case of the engagement of the individual as a private entrepreneur who will be acting independently and providing services to a non-resident entity, such non-resident entity generally does not create a permanent tax establishment in Ukraine. A case-by-case analysis of the tax law situation from a Ukrainian tax law perspective is nonetheless recommended.
3. What should be avoided in order to safeguard the status of the private entrepreneur as independent contractor?
The individual must be materially free from instructions by the principal. Therefore, specific deliveries should be pre-agreed in the individual contract/order. The individual should use its own equipment, including office/apartment space, and the email address and signatures should make the contractor status obvious.