PENALTIES FOR FAILURE TO COMPLY WITH THE NORM FOR EMPLOYMENT OF PERSONS WITH DISABILITIES: APPEAL PROCEDURE FOR UKRAINIAN BUSINESSES

Companies in Ukraine, regardless of their field of activity, may face administrative and economic sanctions from the Social Protection Fund for Persons with Disabilities for failure to comply with the statutory quota for the employment of persons with disabilities. The amounts of such fines are often significant, so it is critically important to know your rights and effective ways to protect yourself.

Our analysis of court practice and legislation allows us to highlight the key aspects of the problem.

1. The essence of the problem: Standards and accounting for employees

According to the Law of Ukraine “On the Fundamentals of Social Protection of Persons with Disabilities in Ukraine” (No. 875-XII), the following standards have been established for employers:

 – If an organization has up to 8 employees, the standard does not apply;

 – If there are between 8 and 25 employees, there must be at least one person with a disability;

 – If there are 26 or more employees, it is necessary to ensure the employment of 4% of the average number of full-time employees.

In case of failure to comply with the standard, an administrative and economic sanction is applied in the amount of the average annual salary of the employee for each job not created. The Social Insurance Fund receives information on the number of employees from the Pension Fund of Ukraine. In turn, the Pension Fund takes data from reports regularly submitted to it by taxpayers.

Only the average number of full-time employees is taken into account when calculating the quota. This means that:

 – Persons working under civil law contracts (e.g., contracts for work, provision of services, gig contracts) are not included in the number of full-time employees.

 – Therefore, persons with disabilities employed under civil law contracts cannot be considered as fulfilling the quota for job creation.

This is the most common reason for penalties, as many companies that work with persons with disabilities on the basis of civil law contracts mistakenly believe that they have fulfilled the quota.

Conversely, there are frequent cases when the Social Insurance Fund mistakenly includes persons employed on a part-time basis, as well as persons engaged under civil law contracts, in the average number of full-time employees. As a result, there is an obligation to hire more persons with disabilities, and therefore, the administrative and economic penalty for NOT hiring them increases.

2. Two strategies for appealing sanctions

We recommend considering the following three defense options, which can be applied individually or in combination:

Option I. Error in calculating the average headcount

The most promising basis for appeal is an error in the calculation made by the Fund or the employer itself in the submitted reports.

Action: It is necessary to carefully check the monthly calculation of the average number of full-time employees.

Important detail: If, after verification, it turns out that the average number of employees was, for example, 15 or less (and not 16 or more), this can be critical. For companies with 8 to 15 employees, the penalty is only half of the average annual salary. Thus, even a slight adjustment in the number of employees can reduce the amount of the penalty by half.

Option II. Proving that all possible measures were taken

If there are no errors in the calculation, you can appeal the fine by proving that the company is not at fault. According to the law, the entity is not liable if it proves that it took all possible measures to prevent the violation.

Court practice confirms that courts have canceled fines if the employer confirmed that:

 – there were open positions;

 – reports were submitted to the Employment Center (form No. 3-PN);

 – job advertisements were posted;

 – agreements were concluded with the Employment Center to assist in the selection of candidates.

In such cases, the courts consider that the failure to employ persons with disabilities is not the fault of the employer and the fine is canceled.

3. Appeal procedures

If an employer considers the imposition of administrative and economic sanctions to be unjustified, they have the right to appeal. Pursuant to Articles 19 and 20 of Law No. 875, the resolution of such disputes falls within the competence of the Fund or the judicial authorities.

Thus, to challenge a fine, an employer may use one of the following methods:

 – Administrative appeal: File a complaint against the sanctions with the Fund that imposed them;

 – Judicial appeal (active): File a lawsuit with the court to declare the calculation of sanctions unlawful and to cancel it;

 – Judicial protection (passive): Wait for a lawsuit from the Fund for the enforcement of sanctions and present your arguments regarding their illegality in the context of this case.

Please note that administrative and judicial appeals cannot be filed simultaneously, as the competent authority will leave the complaint unconsidered if it finds that the complaint is the subject of court proceedings.

Conclusion

A comprehensive approach to appeal, which includes auditing calculations and carefully preparing evidence, is the only effective way forward. Importantly, a court appeal allows you to stop the accrual of penalties and annual interest.

Our law firm is ready to conduct a detailed analysis of your situation, perform an alternative calculation, and develop an individual defense strategy to minimize your financial risks.

14.11.2025