Sick Pay 2021: The Essentials

Currently, as Ukraine and the world are being hit by new waves of coronavirus, the topic of calculating and paying sick leave benefits is highly relevant. The state wants to save on payments, because with the surge in illness, money from the Fund is flying out like hotcakes. Work is in full swing on the implementation of e-sick leave. So, what do we have today? Let's figure it out together.

What changed in 2021

1. The minimum wage was increased to UAH 6000 from January to November, and from December it will be UAH 6500. This affects the limits on the average daily wage.
2. Launch of e-sick leave.

Can incapacity for work be confirmed by another document?

No. Only a sick leave certificate is proof of incapacity for work. Certificates, hospital discharge summaries, and other documents do not grant the right to receive sick leave benefits.

Who is entitled to sick leave benefits?

MoH Instruction No. 455 states that a sick leave certificate is issued to:

• everyone who lives and is officially employed in Ukraine
• persons elected to elective positions in state authorities, local self-government bodies, other bodies, and public organizations
• members of collective enterprises, agricultural and other production cooperatives
• individual entrepreneurs, lawyers, notaries, i.e., those who provide for themselves through self-employment, and members of creative unions and other creative workers
• migrant workers who are citizens of Ukraine, permanently reside in Ukraine, but work abroad, provided that they are not registered in the social insurance system of the country where they work.

When should a sick leave certificate be submitted to work?

The law does not establish deadlines for submitting sick leave certificates to an enterprise. However, there is a small note in Law No. 1105, Part 5, Article 32, which states that an employee can receive sick leave benefits if they submit the sick leave certificate no later than 12 months from the day of restoration of working capacity.

Who pays for sick leave and how?

The enterprise pays for the first five calendar days of illness, and the Social Insurance Fund pays for all other days.

On our YouTube channel "Biznesuy" you can watch an interesting video on the topic of electronic sick leave, and it will only take 5 minutes.

Taxes on sick leave benefits

Regarding taxes – everything is stable. Since sick leave benefits, we are talking about temporary incapacity for work, are classified as salary payments, they are subject to personal income tax (PIT) of 18%, military levy of 1.5%, and a single social contribution (SSC) of 22% (in the general case), which is paid by the employer.

Electronic sick leave: transitional period

A draft Order has appeared on the MoH website, which refers to a transitional period from June 1 to August 31, 2021. During this period, medical institutions already connected to the electronic healthcare system will be obliged to issue electronic sick leave certificates.
From September 1, 2021, according to the draft Order, all medical institutions must issue electronic sick leave certificates.
Maternity sick leave certificates in electronic format are planned to be issued from September 1, 2021.
However, only after the MoH publishes a notice on its website stating that all doctors have the technical capability and are ready to issue electronic sick leave certificates, will it be possible to talk about the full launch of e-sick leave.

What will happen to paper sick leave certificates?

Law 1105 states that a sick leave certificate can be submitted for compensation within 12 calendar months from the day of restoration of working capacity. This means that for at least another year, paper sick leave certificates issued before 31.08.2021 can be received from employees and paid for. Furthermore, current Instruction No. 532 and Instruction No. 455 provide for the use of paper sick leave certificates. Most likely, all regulations will be brought into compliance in the near future, and then the fate of paper sick leave certificates will be decided. Until then, we must adhere to the current norms.

Where to view sick leave information?

Both employees and employers can obtain all sick leave information on the PFU website through their electronic cabinet. To do this, you need to have an EDS key and register on the portal.

If you visit a Fund branch in person, you can obtain a paper extract.
The employer can only view information for the period of employment with the employee.

New action algorithm

1. 1. Based on a medical conclusion, the doctor opens and closes the sick leave certificate and enters the information into the Register, signs it with their EDS, and sends it to the PFU. Employers, please note that the employee will be asked for the company's EDRPOU code, as this information is entered into the Register. Ensure that all employees know it or have it saved in a phone note.
   2. The PFU receives the data, assigns a unique number to the record, and, miraculously, from this moment the sick leave certificate comes into existence. The electronic sick leave certificate can now be viewed by the SIF, the employer, and the employee.
   3. Next, the employee's task is to inform their workplace about the illness and sick leave, and the employer's task is to obtain an extract from the Register. Important note: the employee does not need to bring any documents to work; a closed electronic sick leave certificate grants the right to receive temporary disability benefits.
   4. And then, the familiar procedure with the commission or authorized person for social insurance issues at the enterprise. Let's recall together what the commission/authorized person does:
      • reviews the sick leave certificate
      • makes a decision on its payment/refusal of payment
      • draws up a protocol on the appointment or refusal of sick leave benefits
      • transfers the protocol to the accounting department
   5. The accounting department performs its function: calculates, pays for the first 5 days, and if necessary, submits an application-calculation to the SIF. By the way, now in the personal cabinet on the PFU website, you can view, generate, and print application-calculations for sick leave certificates.
   6. And finally, the payment of funds from the SIF to the employee and the payment report.

It is difficult to say if this is the final version of the algorithm, as work on e-sick leave is still ongoing.

How to report to the SIF

If you have paid SIF funds to an employee, do not delay with reporting. Within one month after payment, the employer must submit a report to the SIF – a notification of payment of funds to insured persons. The form can be found in Appendix 2 to Procedure No. 12. Please note that failure to submit or untimely submission of the notification incurs a fine of UAH 170 to UAH 340 (Articles 165-4 and 165-5 of the Code of Administrative Offenses) or expect an inspection from the SIF.
Keep in mind that payment information will now also be displayed in the Register. The SIF enters it there based on the submitted report.

If you have questions or need expert assistance from specialists in accounting services, please contact us and we will promptly prepare a consultation.

Another short video about e-sick leave from the UHY Prostor team)