Although not directly related to local self-government, the changes introduced in the civil servants’ remuneration system may have a significant impact on the effectiveness of interaction between local governments and state institutions. The revised number of employees in local state administrations, along with new principles of classification of positions and remuneration systems, are likely to improve administrative processes at the local level. Changes in the civil service reflect the overall trends of reforms towards increasing transparency, efficiency and accountability of the authorities, which directly influence territorial communities and their development.

Today, on 11 March, the Verkhovna Rada of Ukraine adopted the law (Draft Law No. 8222) introducing unified approaches to civil servants’ remuneration based on the classification of positions. This step is part of a broader civil service reform and aligns with the requirements of European partners under the Ukraine Facility mechanism.

What does the law change?

• Introduction of a grade system: civil servants’ positions will be classified by job families (administrative management, rule-making, analytics, and others) and levels (managerial, senior, middle, and entry-level).
• Strengthening the role of the official salary: starting from 2026, the minimum salary of a civil servant cannot be less than 2.5 times the minimum living wage.
• Limitation of incentive payments: the total amount of bonuses per year will not exceed 30% of the employee’s fixed salary fund.
• Transparency and predictability of salaries: salaries will be adjusted to the level of remuneration in the private sector.
• Social guarantees: preserving bonuses for rank, length of service, access to state secrets and financial assistance.
• Review of the number of civil servants: the government should develop a mechanism for determining the optimal number of civil service employees, which will influence the efficiency of management processes, in particular in local state administrations.

In light of the spread of fake news about a possible increase in salaries for civil servants, Ukrainian MP Vitalii Bezgin explained that the changes envisaged by the new law are not related to salary increases.

‘This law does not envisage an increase in salaries for civil servants, which has been falsely reported. It aims to create a transparent and fair remuneration system where salaries will depend on the level of qualification, responsibility and role of each employee in the system. The important message is that the reform is aimed to improve the efficiency of the civil service and meet European standards of governance, not to increase the uncontrolled growth of budget expenditures,’ explained Vitalii Bezgin.

When will the new rules come into force?

On 1 April 2025, the law is due to come into force.

Starting from 1 January 2026, the minimum official salary is set at 2.5 minimum living wage and the number of employees of local state administrations is to be reviewed. This may affect the structure and efficiency of local governments, therefore further changes should be monitored.

Starting from 1 January 2027, the transition to a remuneration system based on comparison with the private sector will be introduced.

The amendments will help to increase transparency and fairness in the remuneration of civil servants, which will be an important step in public administration reforms. Although the law does not directly affect local councils, changes in the state administration may have a significant impact on the interaction between local governments and state institutions, as well as on the efficiency of the civil service in the regions.