Overhaul of Employee Reservation Regulations
On May 20, 2026, the Cabinet of Ministers of Ukraine adopted Resolution No. 635, which significantly revises the rules for reserving employees from military service. These updated measures, effective as of May 22, 2026, introduce several key changes:
- an increased minimum salary requirement;
- adjusted rules for part-time workers;
- a new round of company audits;
- and tighter restrictions on small farms.
The most notable shift is the salary threshold being raised to three times the minimum wage, equivalent to 25,941 hryvnias. The previous standard—set at two and a half times the minimum wage—will now apply only in frontline areas and zones of active combat. Additionally, new regulations for part-time employees, expected to take effect around mid-June 2026, have sparked debate within the business community.
A two-stage verification process has been launched: over the next month, ministries and regional military administrations must reapprove the criteria, and all enterprises must undergo a fresh review by September 1, 2026. As Dmytro Buzanov explained,
“A company that loses its critical status following an audit cannot reapply for it until at least six months have passed from the date the decision was revoked.”
For small farms, the criticality criterion is now tied to land area, requiring at least 1,000 hectares in the agricultural sector. According to business representatives, these changes could have serious repercussions. Oleksandr Fediienko noted,
“Companies operating under state contracts will easily meet the requirements, but for businesses relying on their own revenue, raising the average salary is a real challenge.”
The European Business Association (EBA) has also warned that “pressure on the payroll fund may push some companies into the shadows.” Ruslan Sokol emphasized that “while a large company can replace a mobilized employee, for a small farmer, the mobilization of the owner often means the effective closure of the business.”
Impact of the New Resolution on the Labor Market
Consequently, the latest resolution by Ukraine’s Cabinet of Ministers is poised to profoundly affect the labor market and business operations, particularly for small and medium-sized enterprises. The amended employee reservation rules have generated widespread reaction among business organizations and call for a careful assessment of their consequences.
These new reservation rules reflect the Ukrainian government’s effort to adapt labor market policies during wartime, but their implementation may present significant hurdles for businesses. The elevated salary threshold and stricter requirements for small farms could substantially reshape employment patterns, especially in the agricultural sector. Close monitoring is essential, as the outcomes may affect not only individual companies but the broader economy as well.
As the government implements these significant changes to employee reservation rules, businesses are increasingly concerned about the implications for their operations. The new salary threshold and audit processes could create challenges for companies, particularly those not benefiting from state contracts. For a deeper understanding of how these adjustments will impact the workforce and the business landscape, you can read more about the recent updates on employee reservation regulations.