The Absurdity of Mathematics: How Different Approaches to Employee Accounting Multiply Employer Burdens

Danilo Hetmantsev, a member of the Ukrainian Parliament and the head of the Finance, Tax, and Customs Policy Committee, has recently addressed the government with a request for clarification regarding the methodology for calculating the average number of employees for the purposes of the Law on Employment Support for Persons with Disabilities. The response he received was more formal than substantive, and it clearly contained a call to employers: 'pay the contribution.'

While the issues may not be visible at the level of state institutions, businesses are facing an entirely different reality on the ground. Therefore, Hetmantsev decided to explain the situation once again, using simple examples to demonstrate how this issue is already impacting enterprises.

Let’s consider a hypothetical employer who has 100 employees, of which 10 are on unpaid leave due to military aggression, and 20 have suspended employment contracts. According to the statistical instruction, external part-time workers are not counted; however, all other employees, including those mobilized, those on unpaid leave, and those with suspended contracts, are included in the calculations.

Thus, from the 100 employees, only 10 external part-time workers are excluded, leaving 90 employees for the calculation. Accordingly, the norm is set at 4% of this number, which equals 4 job positions for the employment of persons with disabilities. If the employer fails to meet this norm, they are obligated to pay the contribution.

However, different rules apply for calculating the contribution. Specifically, employees who are not actually receiving a salary or performing work functions, such as those mobilized, those on unpaid leave, and those with suspended contracts, are not included in the average number of employees. Instead, external part-time workers are included within the equivalent of full-time employment.

Consequently, from the same 100 employees, a different indicator of the average number of employees is formed—40 employees, from which the contribution calculation is further derived. The logic here is straightforward: one cannot divide the payroll fund by those who are not receiving a salary, as this would distort the results.

These same employees 'exist' differently in various calculations. For the purposes of calculating the norm, external part-time workers are effectively 'invisible,' while when calculating the contribution, they are included and affect the financial result. Meanwhile, the situation with other categories of employees is the opposite: they are counted when determining the norm, increasing it, but are not considered when calculating the contribution.

This discrepancy in approaches creates an imbalance in the entire system. Including 'inactive' employees in the norm calculation leads to a significant increase in the contribution amount. For example, if the average salary of our hypothetical employer is 30,000 UAH, then according to the current logic, the norm would be 4 individuals. Consequently, the contribution amount would be 4 × (30,000 × 40%) × 3 = 144,000 UAH per quarter.

However, taking into account the reduction that is in effect during the state of war, the actual contribution amount would be 72,000 UAH per quarter. If we consider only the employees who are actually working, the norm would decrease to 1 individual, and the contribution amount would be 36,000 UAH per quarter. With the reduction factored in, the actual contribution amount would be 18,000 UAH per quarter.

This situation indicates that the financial burden can increase exponentially simply due to different approaches to determining the number of employees. A logical question arises: is such an approach fair? In effect, the state today tells the employer that maintaining employees during wartime translates into additional costs for the business.

This creates a dangerous signal: socially responsible behavior by businesses becomes financially unviable. It seems that the more an employer retains employees, the more they pay. This situation requires urgent review.

As a member of parliament, I will once again reach out to the government and initiate amendments and regulatory adjustments to this issue to ensure fairness in approaches to employee accounting and to reduce the financial burden on businesses.