The problem of salaries paid "in envelops" arose from the time when Ukraine became an independent state back in 1991. Practically all governments in Ukrainian's recent history have declared this problem to be solved and the current government of Yuriy Yekhanurov is no exception. The Ukrainian prime minister addressed top representatives of national business and all domestic employers and called on them to display civil duty and to legalize the real salaries of their employees. This means that unlike previous governments trying to find a way of optimizing pressure on the salary fund, this government is trying to solve the problem through additional control by the State Tax Administration of employers and involvement of officials of the Prosecutor-General's Office. But taking into consideration that pressure on the salary fund in the form of payments to the social funds is approximately 37%, we cannot expect the way proposed by the government to guarantee an easy solution of this problem. On the one hand, there is a need to provide a reasonable tax policy which will be capable of reducing the tax pressure on the salary fund. On the other hand, the responsibility for tax evasion by the employer as well as employee should be increased.

Lexwell & Partners advise on the permanent basis a number of transnational and local companies on diverse Ukrainian labor and employment law issues. This Includes, in particular, the Drafting of employment and collective agreements, consulting on employment of foreign citizens, obtaining work permits, advising on comprehensive aspects of social security, and services in resolving labor law disputes, etc.