- Overview: Croatia
- 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 Croatia
If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in Croatia 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 Croatia, 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 Croatia 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 Croatia.
Hiring and Firing Workforce in Croatia Guide
# Employment Contracts
Employment relationship between any parties of employment should be established by a written contract of employment, however, the absence of it does not undermine the legal validity and presence of the contract. In other words, employees are completely protected by the labor law with or without a written contract. An employer is required to specify the necessary details of an employment such as nature of work, expected duration (in case of definite contract), compensation, leave, notice period and so forth. Modification of an employment contract may be possible by mutual consent.
# Minimum statutory employment rights
# Hours of work
A typical working time in Croatia is 8 hours per workday and 40 hours per week. By law, employees must be allowed to have a minimum of 24 hours of undisturbed rest period, usually on Sundays, per workweek. Depending on the contractual agreement, employees may work on the basis of five-day workweek or six-day workweek.
# Probation period
The maximum period of probation that is legally approved is 6 months. An employer has the right to terminate the contract of an employee in probation if he/she does not possess the required level of competence for the job.
# Annual leave
Employees who work a regular five-day workweek are entitled to a 20-day of paid annual leave. Employees who work a regular six-day workweek are entitled to a 24-day of paid annual leave. Employees on annual leave are eligible for an allowance that must not be less than their average monthly pay. Employees have the right to carry over their unused leave to the succeeding year if for any reason they did not use it up in the given year. In that case, the annual leave must be used up not later than 30th June.
# Parental leave
Maternity leave entitlement is available to pregnant employees starting from 28 days that precedes their due date. After childbirth, employees are entitled to maternity leave that lasts till their child is 6 months. Upon the completion of a maternity leave, employees are entitled to up to 4 months of parental leave for their first two children, and up to 15 months thereafter or for multiple births. Benefit during maternity leave is equivalent to 100 percent of monthly pay.
# Sick leave
Up till the period when an employee is medically confirmed fit for work resumption or the period when an employee is pronounced permanently unfit for work, a sick employee is entitled to paid leave throughout his/her period of sickness. Employees are entitled to receive sick benefit from their employers for the first 42 days of sickness and a minimum of 70 percent of their average pay for the preceding 6 months from the Insurance Fund thereafter.
Employees can work overtime, not to exceed 8 hours per week if the employer submits a written request for overtime work. Overtime must be paid at a rate of 50% over the employee’s standard salary.
# State minimum salary
Employers are required to remunerate their employees at least once a month for carrying out their duties. Employers are obligated to pay their employees nothing less than 3439.80 Croatian kuna ($544) per month since 1 January 2018.
# Employment termination
Subject to employees’ years of employment, contracts of employment may be terminated with notice period that ranges from 2 weeks to 3 months for between one and 20 years of service. Notice of termination for employees who are within their first year of service in the company is at least 2 weeks. Employees who are within their 2nd year of service are entitled to one-month period of notice. Employees who are in their 5th year of employment are entitled to 1.5 months’ notice; those who are in their 10th year are entitled to 2.5 months’ notice; those who have more than 20 years in the company have a right to 3 months’ notice. Employees who are at least 50 years of age and those who are over 55 years must be given their entitled notice period plus 2 extra weeks before they can be terminated.
Employees are eligible for severance pay if they have worked no fewer than 2 years in the company. In that case, the minimum severance pay must be equivalent to a third of the employees’ average pay in the preceding 3 months multiplied by total years of service in the company.
Acumen International can help you fast-track your possibilities of entering and expanding your business in Croatia 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.