- Overview: Albania
- Global HR Compliance
- Global PEO and payroll
- Work permit for hiring expats via PEO
- Expand without a company set up
- Contractor vs. employee: which is better?
Global HR Compliance in Albania
If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in Albania Guide below will help you understand the nuances of labor legislation in the country.
Companies hire international workforce for various reasons but in most cases they are:
- entering the foreign markets to sell company products. To do so, the company hires sales representatives who would represent their product and sell it to their local client base.
- hiring a global talent with unique skills that is unavailable in the local market or costs the company less than the talent with similar skills hired in the home country.
Before entering a certain foreign market or engaging a global talent, it is crucial for the company to understand how it can make local hires and reward its workers on a monthly basis. Growing companies often face a challenge of paying benefits and bonuses to the commission-based independent sales representatives they are working with.
If you intend to hire and pay your foreign workforce in full compliance with labor laws and regulations of Albania, then the Global Employer of Record service from Acumen International may be the best way for you to go. We are an International PEO company and we specialize in global employment, meaning we can employ your employees in Albania and act as their legal employer on your behalf. We will payroll your foreign workforce monthly and provide benefits to them through our global network so you don’t have to set up your own legal entities there.
We are experts in global workforce employment in Albania, and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.
Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.
With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Albania.
Hiring and Firing Workforce in Albania
# Employment Contracts
Types of employment agreements:
- Permanent employment contracts
- Casual employment contracts
- Fixed-term contracts
The Labour Code provides for the following types of engagement; the parties entering into such engagements are also subject to the conditions of the Albanian Labour Code:
Part-time employment agreement (the employee agrees to work on an hourly basis, either half or complete working day for the normal duration of a week or month, which is shorter than that of full-time employees working under the same conditions). The part-time employee enjoys the same proportional rights as the full-time employee.
Home-based work agreement (the employee is obliged to carry out his job at his home or any other location chosen by him/ her on the basis of the alternatives offered by the employer). The employee working at his/her home enjoys the same rights as the employee working at the enterprise. When the employee does not work at his/her home, he/she may ask additional funds to cover the facility-related expenses.
Commercial agent agreement (Through the contract of employment of the commercial agent, the employee (the commercial agent), in return for payment, is obliged to enter into negotiations or conclude agreements about whatever activities outside the enterprise, in compliance with the orders of his/her employer and on the latter’s behalf. The person exercising this activity in an independent way will not be considered as a commercial agent. The provisions of this Code are applicable even in the case of the commercial agent being an employee
# Fixed-Term vs Indefinite Contracts
An employment contract may last for an indefinite or a fixed period of time, although the employer must provide justification if the term is fixed (i.e. the job is only of a temporary nature). Unless otherwise agreed in writing, the first 3 (three) months of the employment will be deemed to represent a probationary period, regardless of whether the contract is for a fixed or indefinite term. During the probationary period either party may terminate relations with five days’ notice.
Fixed Term Contracts
Contract of employment can be concluded for a certain period of time. Fixed term contract must be justified by objective reasons related to the temporary nature of task/work in which the employee is engaged. The contract of defined duration expires at the end of the envisaged time, without preliminary termination. If a worker keeps working on expiration of a fixed term contract, it is considered as a contract of indefinite duration. Fixed term contracts are prohibited for permanent tasks however there is no clear provision on length of single fixed term and its renewals.
# Employment Termination and Severance Pay (Dismissal)
A fixed-term employment contract is terminated upon the expiry of its term without the need for any prior notice. An open-term employment contract is terminated when one party decides to do so and the prior notice period has been observed. The Labour Code provides that an employment contract can be terminated with or without cause and although in normal circumstances a notice period must be provided, there are circumstances where the law justifies immediate termination for reasonable cause.
The termination of an employment contract by the employer prior to its expiry date, without reasonable cause, can result in the employer being liable to compensate the employee with up to 12 months’ salary; the specific obligations of the employer will be decided upon by the courts.
If an employee is dismissed without any reasonable cause, he has the right to bring a claim against the employer to court within 180 days, beginning from the day on which the notice of termination expires. In the event that an employer is found to have had an unjustifiable motive discovered after the expiration of this deadline, the employee has the right to start legal actions within 30 days, beginning from the day on which the particular unreasonable cause was discovered.
# Severance payments
Workers are entitled to a seniority related reward if the employer terminates the contract, and the labour relations have lasted at least three years. The employee loses the right to the seniority-related reward, if his/her dismissal from work is of immediate effect and based on reasonable causes. The compensation is equivalent to at least 15 days’ wages for each completed year of employment (based on average wages at the end of employment). Similar benefits are applicable in the case of termination of a fixed term contract which has lasted for at least three years.
# Employee Benefits and Contributions
General benefits that is offered by an employer on the market in addition to the benefits required by law According to the provisions of Albanian legislation, the following mandatory payments are not considered salary:
- compensation the employee receives for expenses incurred as a result of his professional activity;
- payment of expenses when the employee works outside his workplace;
- contribution in kind (e.g. accommodation, food and travel expenses);
- difference between the damage and the benefit the employee receives from social insurance, in the event that a work related accident or occupational illness has occurred as a result of serious fault of the employer.
# Probationary period
The first 3 months of work are considered as a probation period, except for the cases where the parties have entered into a contract to carry out the same work. The probation period may be reduced or removed by means of a written agreement or a collective contract. During the probation period, each of the parties may terminate the contract by informing the other party about its decision at least 5 days in advance. A reasonable probation period must be allowed to let a worker learn new skills. A newly hired employee may be fired during probation period without any negative consequences. If an employee is hired on fixed term basis, the parties envisage in writing a probation period, which lasts not longer than three months. The normal duration of the weekly working time is no longer than 40 hours. It is defined by the decision of the Council of Ministers in the collective or individual contract of employment.
# Work hours
By daily duration of work is meant the daily effective time of work from 0 o’clock until 24 o’clock of the same day, breaks excluded. The normal daily duration of work is no longer than 8 hours. It is defined by the decision of the Council of Ministers in the collective or individual contract of employment, within the limits of the maximum weakly working time. For the employees under 18 years of age, the daily duration of work is not longer than 6 hours a day. The daily break is at least 11 hours a day without interruption within the same day or, in case of need, two consecutive days.
# Parental Leave
Generally, maternity leave is 365 calendar days, including a compulsory leave of minimum 35 days prior to and 63 days after childbirth. In case a woman is pregnant with more than one baby, the antenatal period becomes 60 days making maternity leave a total of 390 days. After the period of 63 days following delivery, the woman decides whether she wants to work or benefit from social security. In case the pregnant woman decides to start work after the period of 63 days after child birth, until the child reaches the age of one, she may choose between the two options:
- a paid leave of two hours during the normal work duration; or
- reduced work duration, for two hours, with the same salary as if she had worked full time.
At the end of maternity leave, an employee is entitled to resume her position at the workplace or an equivalent position is provided on terms that are no less favourable than she enjoyed earlier. She is also entitled to the benefits and every other improvement in conditions of employment that occurred during her absence.
Acumen International can help you fast-track your possibilities of entering and expanding your business in Albania by providing you with our Employer of Record services. Our unique mix of PEO/EOR solutions will enable you to jumpstart your global operations almost immediately, cost-effectively and compliantly without any need to set up a legal entity first or afterwards.