Digitalization Is Sweeping Across Ukraine! Employment Record Books Are History Now?
Accountor Ukraine informs that on 10.06.2021, Law of Ukraine # 1217-IX "On Amendments to Certain Legislative Acts of Ukraine Concerning Recording Employee Labor Activity in Electronic Form" of 05.02.2021 is coming into force.
From now on, work history shall be recorded digitally, whereas the data shall be transferred to the Register of insured persons of the State Register of Compulsory State Social Insurance (hereinafter - the “Register”). The law establishes a five-year transition period for transferring the data from employment record books to the Register.
According to the legislators, it will reduce the employers’ paperwork expenses and make access to data on work experience, education and qualifications of individuals easier, and - most importantly - it will simplify automatic pension assignments.
Both employment records books and digital data from the Register shall be used during the transition period.
So, we have analyzed the practical aspects of the transition to digital work “books”.
But How Shall Data Be Transferred to the Register?
Work records shall be entered into the Register by uploading scans of the employment record book pages which must have qualified electronic signature on them. The data may be transferred from paper to digital format:
- By the employer by submitting scans of employment records books pages of the employees with the employer's electronic signature to the Register with subsequent digitization carried out by the Pension Fund of Ukraine (hereinafter - "PFU")
- By the insured individual (employee) via the PFU electronic services web portal by creating a personal account and using the employee’s own electronic signature (which may be obtained from the servicing bank, i.e., the employees should ask their bank managers about it).
The responsibility for data accuracy lies with the person who approves the submission of data to the Register with their electronic signature. Therefore, before submitting data to the Register, it is advised to conduct an audit of employment record books. In addition, we highly recommend using licensed software to make sure that the personal data of employees will not get disclosed on the web. Keep in mind that the employer is responsible in the event of personal data disclosure.
Please note that to ensure high-quality processing and to avoid errors, requirements for the design of employment record books and their copies set out by the applicable legal acts and by the PFU must be taken into account.
Having transferred the data to the Register, the employer must give the original employment record book back to the employee. At the request of the employee, the employer may continue to make entries in the employment record book. However, it is the employee who shall be storing the book and bringing to the employer whenever it is necessary to make an entry. That is, at the request of an employee, the employer is obliged to make entries in the employment record book owned by the employee.
If an employee whose work history records were made in electronic format is laid off/dismissed, the employer shall provide the employee only with a copy of the dismissal order, make the final calculations and enter a corresponding record into the Register. If new entries were being made in the employee’s labor employment book at their request, the employee shall bring the book, and the employer shall make a corresponding entry. Unless the employee has explicitly requested this to be done, failure to enter data on the dismissal of an employee in their employment record book and failure to give it back to the employee shall not have any negative consequences for the employer.
Automation of Pension Payments Assignment
The transition to digital format will enable the individuals and the PFU to assign pensions automatically without the need to collect paper documents confirming work history for the entire period. Since the PFU has been doing personalized accounting since 2000, some data on employees and their work history has already been in the Register since 2000.
So, the employee will only need to select one of the available options in their personal PFU account:
- Proceed with pension assignment;
- Suspend pension assignment in order to receive an increase in pension by 0,5% - 0,75% later (for individuals who keep working past pension age)
- Proceed with pension assignment and obtain information on wages received before the year 2000 and on the relevant accounting data in order to calculate the amount of the pension.
After work-related documentation is converted into digital format, the employee will be able to view the data available in the Register about their work and insurance history in their personal account on the PFU web portal (portal.pfu.gov.ua).
So, the digitalization of work documentation is supposed to make work with employee history records and the retirement procedure easier. We at Accountor Ukraine are always happy to provide professional advice on quick and smooth transition to digital record keeping.