What an NGO Leader Needs to Know About HR Record-Keeping During Martial Law

During martial law, HR record-keeping has its peculiarities for leaders of non-governmental organizations. The accuracy and timeliness of this process determine not only the effectiveness of the organization's work but also the safeguarding of employees' rights and guarantees in challenging conditions. Therefore, we discuss the organization of labor relations in NGOs.

This material covers: 

• how to formally employ staff during martial law;
• key HR documentation for NGOs.

Documents for Official Employment During Wartime

During martial law, labor legislation has undergone many changes. For example, in a job vacancy announcement, it is prohibited to impose any personal qualities on a candidate: gender, age, skin color, etc. (Article 11 of the Law of Ukraine "On Employment"). However, measures to promote employment for certain categories of citizens who have additional employment guarantees are not considered discrimination. 

What documents are required for official employment to be submitted by the employee: 

1. Submission of an employment application indicating the chosen position and conditions (specifying whether it is the primary place of employment or part-time employment). 
2. Provision of the following documents:

• identity document confirming Ukrainian citizenship (passport, plastic ID card, e-passport in a mobile application);
• employment record book (if available);
• taxpayer registration number; 
• education document (specialty or qualification); 
• health certificate (if available, a certificate from the Medical-Social Expert Commission (MSEC));
• military registration document;
• other documents (right to benefits). 

What documents are required for official employment from the employer's side:

• issuance of an order to hire the employee for the chosen position (with the employee's acknowledgment by signature); if there is a probationary period, it is also specified in the order;
• submission of a notification of employee hiring (before the employee's actual commencement of work);
• filling out the employment record book (or its initial registration at the employee's request);
• undergoing a medical examination (for employees engaged in heavy work with harmful and dangerous working conditions — Art. 169 of the Labor Code);
• admission of the employee to work.

Special attention should be paid to the employment of foreigners in Ukraine — they have the right to work based on a permit issued by the territorial bodies of the central executive authority that implements state policy in the field of employment and labor migration (Art. 42 of the Law of Ukraine "On Employment").

Now, regarding the conclusion of an employment contract. According to Ukrainian legislation, it can be concluded in written or oral form. The oral form should be considered the employee's application for employment and the employer's order for their hiring. However, Art. 24 of the Labor Code of Ukraine defines the conditions under which a written employment contract is mandatory.

By the way, UHY provides services for NGOs including audit, financial and accounting, HR administration and payroll calculation, preparation of all types of reports, including tax reports. You can get a consultation here.

HR Record-Keeping During Hostilities: Peculiarities

Let's consider what standard HR documentation an organization may have:

• staffing table indicating the required positions (their classifiers) in the organization, the number of staff units, and their salaries;
• internal labor regulations;
• job descriptions;
• regulations on remuneration and bonuses;
• samples of orders and applications;
• employment contract as a separate document or collective agreement;
• employment record books (if maintained), and consequently, a register of employment record book movements (if employment record books are maintained);
• personal card P-2 and personal file (+ attached copies of documents submitted with the application, from which data is entered into the card);
• timesheets;
• documentation forms for piece-rate pay (route sheets, production statements, work orders — used in production processes);
• vacation schedule;
• payroll statements, salary accrual statement.

However, there isn't always an urgent need to maintain all documents from the list in a small organization. We will definitely review some of them, as without them, it is impossible to properly organize HR record-keeping in the organization and, consequently, accurate payroll calculation.

Maintaining Employment Record Books

It should be noted that, according to Art. 48 of the Labor Code, employee work activity records are maintained in electronic form, and since June 10, 2021, employers are not obliged to keep employment record books but can issue them to employees against signature. However, an employee has the right to demand that the employer maintain an employment record book (especially when concluding an employment contract for the first time).

Given some peculiarities of implementing the digitization process for employment record books (availability of time, HR specialist's qualifications, review of the record book for correctness of its completion, especially before 2004), we recommend continuing to work with paper employment record books for employees. Especially for those employees who started their careers long before Ukraine gained independence. This video will help you understand the specifics of maintaining employment record books in more detail.

Collective Agreement or Remuneration Regulations

It establishes forms and systems of remuneration, defines labor norms, rates, tariff grids, salaries, and schemes of official salaries. It also determines the conditions for introducing and the amounts of allowances, surcharges, bonuses, rewards, and other incentive, compensatory, and guaranteed payments. If an NGO does not have a large number of employees, it would be advisable to issue an order defining the main terms of employment.

Job Descriptions

They define the main rights and duties of an employee and determine their organizational and legal status. They usually consist of the following sections:

• General Provisions;
• Tasks and Responsibilities;
• Rights;
• Responsibilities;
• Must Know;
• Qualification Requirements;
• Relationships (Connections) by Profession, Position.

There is a unified form of job description — the Collection of Unified Forms of Organizational and Administrative Documents, approved by Protocol No. 3 of the Methodological Commission of the State Archival Committee dated 20.06.2006.

Staffing Table

A document that outlines the organizational structure, the list of positions in the organization, indicating the required number of employees holding such positions, and the sizes of official salaries. Generally, a typical form exists only for budgetary institutions and organizations; others develop it considering their own needs. It must contain the following information:

•  names of structural units;
• list of positions (professions);
• number of full-time employees for the respective position (profession);
• sizes of official salaries (tariff rates) for each position;
• monthly payroll fund for employees of the respective position (profession) and for the NGO as a whole.

As a rule, the staffing table is approved at the beginning of the year and remains valid throughout the year.

Timesheet

A mandatory document for all legal entities, regardless of the number of employees. It is necessary for recording the use of working time for all categories of employees, monitoring their compliance with the established working hours, obtaining data on hours worked, calculating wages, and subsequently forming the payroll statement, and will also be useful for compiling labor statistics reports.

The typical form of timesheet No. P-5 is approved by Order No. 489, contains the necessary data for statistical observations, and is recommendatory. If necessary, the form can be supplemented with own indicators depending on the specifics. To record working hours, an employee must be assigned a timesheet number.

Payroll Statement

This is the main primary document, formed based on the timesheet, which contains summarized information about:

• the amount of accrued wages (including rates (salaries), accrued bonuses, additional salary, vacation pay, sick leave, etc.);
• deductions from wages;
• accrual of a Single Social Contribution (SSC) on the payroll fund.

The payroll statement has an approved form (see forms No. P-6, P-7 in Order No. 489), but it is significantly outdated, so it is advisable to develop your own, taking into account your needs, or choose existing software products.

During martial law, the Law of Ukraine "On the Organization of Labor Relations under Martial Law" No. 2136-IX dated 15.03.2022 (hereinafter Law No. 2136) came into force, according to which the following provisions were adopted:

• protection against unlawful dismissal;
• wages not lower than the minimum;
• timely receipt of remuneration;
• the employer may also notify the employee of changes to essential terms of employment immediately before their introduction (Part 2, Art. 3 of Law No. 2136);
• may suspend the operation of certain provisions of the collective agreement (Art. 11 of Law No. 2136).

It should be noted that for the period of martial law, Law No. 2136 takes precedence over the norms of the Labor Code and other regulatory acts.

Thus, the main documents used for calculating employee wages are the staffing table and the timesheet. The document confirming labor costs is the payroll statement.

Can an NGO Head be Appointed on a Voluntary Basis?

Let's consider this case: an NGO director performs their duties on a voluntary basis but is registered as a Group 3 sole proprietor (FOP) and provides, say, accounting services (or project management organization) to the same NGO. We wrote in detail about the relationship between NGOs and FOPs in this article.

Regarding the provision of services to an NGO by a sole proprietor (FOP), such as accounting services or project organization and management services, at the legislative level, this is not prohibited. However, a number of violations of both Ukrainian labor legislation may arise, and questions regarding the organization's non-profit status may also be raised.

A director is an official (an NGO employee) and acts on the basis of a protocol and an employment agreement (contract). And according to Part 1, Art. 21 of the Labor Code: an employment contract is an agreement between an employee and an organization or its authorized body, under which the employee is obliged to perform work defined by this agreement, and the owner is obliged to pay the employee a salary.

Regarding the performance of duties by a head on a voluntary basis, in our opinion, this is possible, but with certain peculiarities, as in practice it is allowed for elected positions and collegial bodies that perform their functions periodically, while the position of a head implies continuous management of the NGO's current operational activities.

Article 43 of the Constitution states that everyone has the right to a salary not lower than that defined by law, and this right is inalienable. Also, Article 95 of the Labor Code supplements the main law and states that the salary must not be less than the minimum; therefore, a director cannot issue an order, directive, and not accrue a salary to themselves, or set it at 0.00 (zero) UAH. Furthermore, such actions are defined by law as non-compliance with minimum wage guarantees and entail fines stipulated by Article 265 of the Labor Code of Ukraine in the amount of:

• non-compliance with minimum wage guarantees — a fine of 2 minimum wages for each employee regarding whom the violation was committed (in 2024 — UAH 16,000);
• fine for unofficial employment, i.e., allowing an employee to work without formalizing an employment contract — 10 minimum wages (in 2024 — UAH 80,000, repeated violation — 30 minimum wages).

There is no statute of limitations for these fines, meaning an employer (owner) can be held liable even after 10 or more years. Furthermore, according to Article 41 of the Code of Administrative Offenses of Ukraine, there is also an administrative fine — ranging from UAH 510 to UAH 1700. It is imposed on the official who committed such an offense, i.e., the director.

During martial law, fines for violations of labor legislation under Art. 265 of the Labor Code are not applied (Part 3, Art. 16 of Law No. 2136) provided that the orders of control bodies to eliminate identified violations are fully complied with within the established deadlines.

If considering the director's activities on a voluntary/pro bono basis, i.e., as voluntary non-profit socially oriented activities through the provision of volunteer assistance (free work and services), then one must be careful with the formalization of such relationships.

Since the position of director is registered in the register of enterprises and organizations of Ukraine, and their powers are defined in the statutory documents. If the regularity and scope of the functions performed are significant, and the organization is not in a state of termination or liquidation, there is a possibility that during control and verification measures or pre-audit analysis, work on a voluntary basis may be identified as hidden employment relationships.

Regarding the involvement of volunteers and other individuals who are voluntarily and gratuitously engaged in the organization's activities, it is acceptable, provided there is no need to comply with:

• labor regulations;
• availability of a workplace;
• paid sick leave;
• guaranteed rest;
• accrual of pensionable service.

In conclusion, current legislation does not directly prohibit NGOs from using volunteer assistance and certain pro bono work in their activities. However, this should not become a permanent, regular, and long-term relationship, so as not to provide grounds for considering such activities as hidden employment.

Overall, if an organization decides to engage volunteers and pro bono work, it is advisable to seek consultation from professional specialists who can help formally document such engagements, taking into account the specifics of each NGO.

References and Abbreviations

1. Law of Ukraine "On Employment" No. 5067-VI dated 05.07.2012
2. Labor Code of Ukraine
3. Law of Ukraine "On the Organization of Labor Relations under Martial Law" No. 2136-IX dated 15.03.2022
4. Order "On Approval of Standard Forms of Primary Accounting Documentation for Labor Statistics" No. 489 dated 05.12.2008 
5. CUAO — Code of Ukraine on Administrative Offenses
6. NGO — Non-Governmental Organization, or Non-State Organization, or NGO (Non-Governmental Organization), or PO - Public Organization, or Public Union, or CI - Charitable Institution, or Charitable Society, or Public Association.
7. MSEC — Medical-Social Expert Commission

Nataliia Lytvynenko   
Project Manager 

Volodymyr Zhyvun     
Expert