Reform Index №191-192: Law on Freelancing and Provision of Administrative Services Online

Reform Index №191-192: Law on Freelancing and Provision of Administrative Services Online

Photo: / IgorVetushko
14 September 2022

In issue 191-192 (issue 186 before the audit) of the Reform Index, 12 changes have been included for the period from July 18 to August 14*, which could impact the “rules of the game” in the country. Two of them received +2 points from experts, which we think separates substantial changes from less noticeable ones: the so-called law on freelancing and the decree on automatically providing public services (via the Diia app). Overall, the Reform Index for this period is +1.2 points, with values ranging from -5.0 to +5.0. In the previous issue, the Index was +1 point.

*In connection with the war in Ukraine and the state’s change of focus to wartime needs for the period of active hostilities, we have changed the period of monitoring regulations for the Index for Monitoring Reforms from two to four weeks.

Chart 1. Reform Index Dynamics

Chart 2. Reform Index and its components in the current round

Freelance Law, +2 points

In August, the President signed Law 2421-IX regulating work with no fixed number of working hours of employment but with a fixed amount of tasks. It introduces a new type of agreement for such jobs: an employment contract with no set working hours (similar to a zero-hours contract used worldwide).

The law protects freelancers’ rights, particularly the possibility of being employed by several employers simultaneously. It requires that employers pay a “subscription fee” even if they did not engage freelancers in a given month in an amount not less than the payment for 32 hours of work of a similar specialist working fixed hours.

The law prescribes some restrictions regarding the engagement of freelancers. A company can have no more than 10% of such employees (or one freelance contract for an enterprise with less than ten employees). In contrast, large companies employing over 250 employees are prohibited from engaging freelancers. Also, freelance agreements cannot be used for labor relations if employees actually work all hours set at the enterprise.

Information about the Reforms Index project, the list of Index experts and the database of the regulations assessed are available here.

Providing public services automatically, +2 points

On August 5, the Cabinet of Ministers adopted a procedure for automatically providing online public services. The regulation introduces an algorithm for providing such services to reduce the human factor in the citizens’ interaction with the state.

One must use the Diia app to apply for the service in free form. Users’ identification will occur at the time of their signing into Diia using a qualified electronic signature, seal, or other means of identification. After a request is submitted, the Diia portal’s technical administrators will check the information in the request and provide an answer as to whether it is possible to receive the desired service automatically.

The Diia portal already offers the option of automatically registering for individual entrepreneurs, registering unemployment, obtaining a certificate of income, etc. The next step will be registering an LLC, changing CEAs, and closing  individual entrepreneurs activity.

Chart 3. Value of Reform Index components and number of events

Reform Index from VoxUkraine aims to provide a comprehensive assessment of reform efforts by Ukraine’s authorities. The Index is based on expert assessments of changes in the regulatory environment in six areas: Governance, Public Finance, Monetary system, Business Environment, Energy, Human Capital.

This publication has been produced with the assistance of the European Union. The contents of this publication are the sole responsibility of Vox Ukraine and can in no way be taken to reflect the views of the European Union.



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