- Overview: Bosnia and Herzegovina
- 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 Bosnia and Herzegovina
If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in Bosnia and Herzegovina 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 Bosnia and Herzegovina, 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 Bosnia and Herzegovina 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 , 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 Bosnia and Herzegovina.
Hiring and Firing Workforce in Bosnia and Herzegovina Guide
# Employment Agreements
Employment contracts may be concluded for:
- An indefinite period
- A fixed period not to exceed five years (fixed-term employment contract)
In the event that the period for which an employment agreement is in force has not been agreed upon, that employment contract shall be deemed concluded for an indefinite period. A fixed-term employment contract, with the exception of an independent contractor agreement, may be concluded provided that employment for an indefinite period cannot be arranged because of the nature of the job offered or because of the conditions for its performance for the period required to perform a given job when the time of its completion cannot be precisely determined.
The laws provide for a minimum 1 year and maximum 5 years validity terms of employment contracts. The extension of employment contracts with employees who have been in compliance with operational, performance and labour discipline shall be performed, subject to the consent of the parties, within the five-year term of their validity for a period until expiration of a maximum duration of an employment contract. Upon expiration of such five-year term or in case such a diligent employee, upon his/her consent, is being transferred to another job the new employment contract shall be concluded for a period of at least three years, and only subject to the written consent of an employee the said period can be shortened up to one year.
# Employment Termination and Severance Pay (Dismissal)
The employee shall have the right to terminate an employment contract concluded for an indefinite period by warning the employer in writing one month in advance of termination. Upon agreement among the parties and in the circumstances stipulated by a collective contract, an employment contract may be terminated prior to the expiration of its period for warning. Employees shall have the right, prior to the expiration of the period for warning, to withdraw their application, provided that no other employee who cannot lawfully be denied an employment contract has been recruited in their place. In circumstances which preclude or present substantial difficulty in prolonging employment (state of health, attainment of retirement age, radioactive contamination of an area, and other such circumstances) as well as in instances of infringement by the employer of labour legislation, a collective contract, agreement, or employment contract, the employer shall terminate the employment contract within the period specified by the application of an employee. Upon expiration of the period for warning, the employee shall have the right to cease work. On the final day of work, the employer shall give the employee their cumulative employment record and reach a final settlement with them. A fixed-term employment contract is subject to early termination upon request of employees in the event that they are in poor health or become disabled, enter into military service under contract or for other meritorious reasons which prevent performing work under the employment contract, and also in the event that the employer infringes labour legislation, a collective contract, or an employment contract. The fact that an employer has infringed labour legislation, a collective contract, or an employment contract shall be established by a body duly authorized to exercise oversight of compliance with labour legislation, by a trade union and (or) a court or may be established by the employer independently.
# Notice period
Upon liquidation of the organization, termination of the activity of an individual entrepreneur, reduction in the number or staff of employees the employer is obliged to give the notice at least 2 months before the dismissal, if longer periods are not provided for in the collective agreement. Dismissal due to the expiration of the contract must be accompanied by a written notice to the employee, but no later than 2 weeks before. The employee must give the notice one month in advance.
# Severance payments
Upon termination of an employment contract, except for independent contractor agreements, by reason of an employer’s infraction of labour law, a collective contract, or an employment contract, the employee shall receive a severance benefit in an amount no less than two weekly average wages. The employee shall be paid severance benefits in an amount of at least three-monthly average wages upon termination of an employment contract under the liquidation of an organization. In the event of termination of an employment contract on refusal to continue work by reason of material changes in work conditions or by reason of establishing work in concurrent jobs at less than half of the full-time amount, the employee shall receive severance benefits in an amount of at least one weekly average wage. Upon termination of an employment contract with the chief officer of an organization, their deputies, and the senior accountant on grounds, the new owner, lessor of property held by the organization, or the person who as trustee manages shares (authorized capital stake) of an organization, shall pay such employees severance benefits in an amount of at least three average monthly wages. The number of benefits may be increased according to the procedures and in the circumstances stipulated by a collective contract, agreement, and employer. Part-time employees shall not receive severance benefits.
# Employee Benefits and Contributions
List all mandatory benefits required by law to be provided by an employer:
- Social Security
- Pension Fund
# Probationary period
An employer may stipulate that a probationary period is necessary in a labour agreement in order to test the skills and abilities of a potential employee or to determine whether the employee is a good fit in the occupied position. Some categories of employee are not subject to a probationary period, e.g. employees under 18 years of age, disabled persons and graduates within two years from the date of their graduation. A probationary period may not exceed three months.
For every hour of overtime, supplementary pay of overtime wages accrued for such time shall be paid to:
- Employees remunerated on a piecework basis in an amount not less than the piecework rate.
- Employees remunerated on the basis of time in an amount not less that their hourly base wage (base salary) or salary.
Working week should not exceed 40 hours and the working day 8 hours. In certain situations, or conditions, the law provides for shorter working hours, e.g., shift work, night work, etc.
# Annual Leave
There are main and additional annual leave. All employees are entitled to annual basic leave of at least 24 calendar days. The terms of additional holidays, as a rule, are summed up with the terms of labor. At the request of the employee, the employer may replace part of the labor and additional leaves with monetary compensation. However, the use of 21 calendar days of vacation is mandatory. If the employee offers leave, in the prescribed manner, and refuses to use it, the employer has the right to refuse to pay compensation or to postpone the terms of the leave. In the first year of work, leave is granted no earlier than after six months of the working period in one organization
Employees are paid compensation for periods of illness out of the Social Security Fund.
126 days (140 if there are medical complications or if more than one child is born.) Women are paid the full sum within the first 10 days of their leave, which is calculated by the average day rate in the last 6 months * 126 days. After the 126 days, they can still be on maternity leave for up to 3 years.
For the birth of a child and its care by the family, the employer shall provide, upon request by the father (adoptive father) of the child, him with unpaid leave with duration of no more than 14 calendar days. Other durations and (or) payment during leave may be prescribed by a collective contract or the employer. Leave for the father (adoptive father) upon birth of a child shall be provided one time upon his application in writing within six months of the child’s date of birth.