- Overview: North Macedonia
- 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 Macedonia
If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in Macedonia 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 Macedonia, 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 Macedonia 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 Macedonia.
Hiring and Firing Workforce in Macedonia Guide
# Employment Agreement
Permanent employment contracts
The employment contract should contain the following elements:
- data on the employee and employer, as well as their residence address or registered seat;
- date of work commencement;
- title of the job, i.e., data on the type of work, with a brief description of the assignments;
- provisions on the obligation of the employer to inform the employee about the job risks and special professional qualifications, knowledge or necessary special medical supervision, in accordance with the law, specifying the special risks that may be a consequence of the work;
- location of the work. If the exact location is not indicated, the employee will be deemed to be performing work at the employer’s head office;
- duration of employment, when a contract is concluded for a fixed-term;
- provision for full-time or short-term employment;
- provision for daily or weekly regular working hours and the distribution of working hours;
- provision on the amount of the basic salary, expressed in monetary terms;
- provision for other allowances to be provided to the employee;
- provision for annual leave, or the manner of determining the annual leave; and
- indication of the employer’s general acts that determine the working conditions of the employee.
In case of a fixed-term employment, the maximum term is 5 years. If the purpose of the employment contract is to substitute an employee, the employment term may be conditioned by the return of the employee. The fixed employment will be transformed into unlimited employment if the employee continues to work after the employment contract expires. Exceptionally, fixed-term employment may also be transformed into unlimited employment under the following conditions:
- the employee works more than 2 years in the same post;
- the post has been left open due to retirement;
- the financial assets for the post are already planned; and
- the employee ascertains the necessity of long-term employment.
In North Macedonia, a collective agreement is a legal instrument that regulates the rights and obligations of employment, while the bargaining persons negotiate in good faith for the conclusion of a collective agreement. There are three levels of collective bargaining in North Macedonia: national, branch level and company level. In accordance with the Labour Law, a general collective agreement for the private sector and a general collective agreement for the public sector are directly applied and are mandatory for all employers and employees in the private or public sector. A collective agreement at branch or department level is directly applied, and it is mandatory only for the employers that are members of the employers’ association that signed the collective agreement or those that join the association subsequently.
#Employment Termination and Severance Pay (Dismissal)
The employee is entitled to terminate the employment contract with a written statement that s/he wants to terminate the employment contract. The employer may terminate the employment contract only if there is a just cause for the termination relating to:
- the conduct of the employee (due to personal reasons on the part of the employee)
- breach of the workplace discipline or duties (cause of fault)
- if the cause is based on the needs relating to the operation of the employer (business cause).
The employer may terminate the employment contract of the employee due to a breach of the workplace discipline or failure to perform the obligations laid down by law, collective agreement, act of the employer and the employment contract, without a notice period, in particular if the employee:
- is absent from work without just cause of three consecutive working days or five working days within one year;
- misuses sick leave;
- does not comply with the regulations relating to healthcare, occupational safety and health, protection from fire, explosions, harmful effects of poisons and other hazardous substances and violates the environment protection regulations;
- brings in, consumes or is under the influence of alcohol and narcotic drugs;
- commits theft or causes damage to the employer in relation to the work, intentionally or due to gross negligence, and
- discloses a commercial, official or state secret.
The unjustified grounds for termination of the employment contract are:
- employee’s membership in a trade union or participation in trade union activities in accordance with the law and collective agreement;
- lodging a complaint and taking part in legal proceedings against the employer in order to confirm the breach of contractual and other obligations arising from employment before the arbitration, judicial and administrative bodies;
- approved absence from work by reason of illness or injury, pregnancy, childbirth and parenthood, care for dependents and unpaid parental leave;
- use of approved absence from work and annual leave;
- compulsory military service or participation in a military exercise, and
- other cases of suspension of the employment contract laid down by the present law
#It is prohibited to dismiss
When the employer is terminating the employment contract, it shall be obliged to state the grounds for termination and the merits of the cause for termination and indicate these in the rationale of the notice. The termination letter must be in written form. In case of termination of the employment, the employer shall be obliged to return to the employee, within three days, all of his original documents and to issue the employee a certificate on the type of work carried out by him. The employer shall not be allowed to state in the certificate anything that might make it difficult for the employee to find new employment. Workers enjoying special protection: workers’ representatives, pregnant women and/or women on maternity leave, workers with family responsibilities. Labour Relations Act states that The employer shall not dismiss a woman during her pregnancy or while she is on a maternity leave, or during a leave of absence for child care. This prohibition also applies to fathers on parental or adoption leave. In addition, Labour Relations Act provides for a protection against dismissal for trade union representatives. A trade union representative can only be dismissed with the prior approval of the trade union. In case the trade union refuses to give approval, such approval can be given by the court. This protection applies during the whole period of the mandate and at least two years after its expiration.
If the employment contract is terminated by the employee, the notice period shall be one month. The employment contract or the collective agreement may provide for a longer notice period, which shall not exceed three months. If the employer terminates the employment contract of an individual employee or a smaller number of employees, the notice period shall be one month, and in the case of termination of employment of more than 150 employees or 5% of the total number of employees with the employer concerned prior to the termination of employment it shall be two months. If the employer terminates the employment contract of an employee performing seasonal work, the notice period shall be seven working days.
In the event of termination of the employment contract for economic reasons, the employer shall be obliged to pay the employee severance pay, in particular:
- up to 5 years of employment – in the amount of one net salary;
- from 5 to 10 years of employment – in the amount of two net salaries;
- from 10 to 15 years of employment – in the amount of three net salaries;
- from 15 to 20 years of employment – in the amount of four net salaries;
- from 20 to 25 years of employment – in the amount of five net salaries; and
- over 25 years of employment – in the amount of six net salaries.
The base for the calculation of the severance pay shall be the average net salary of the employee in the last six months prior to the termination, but it shall not be less than 50% of the average net salary paid per employee in the country in the last month before the termination. The severance pay shall be paid as of the day of termination of the employment. Any request of the employer i.e., consent of the employee to waive the right to severance pay, shall be null and void. The severance pay shall not be paid in the event of termination of employment contract for economic reasons to an employee performing seasonal work with duration up to three months.
#Employee Benefits and Contributions
Mandatory benefits required by law to be provided by an employer:
- Annual leave
- Public Holidays entitlement
- Paid and Unpaid leave
- Sick pay
- Maternity leave and parental leave
- Health Insurance
Non-mandatory employee benefits:
- The employer, at own cost, may organize the transportation for employees to and from the workplace, as well as nutrition during work. The costs for nutrition may amount up to 20% of the average net salary per employee paid during the previous year, and the costs for transportation in the amount of the actual costs in the public transportation.
- Annual bonuses are common in Macedonia. Supplemental insurance to cover private healthcare is sometimes given as a benefit.
When entering into the employment contract, the employer and the employee may agree on a probationary period. The employment contract, in addition to all rights and obligations arising from employment, shall also lay down the amount of the wages and the duration of the probationary period. The probationary period may be extended in the case of a justifiable absence from work (due to illness and similar). The maximum probation period is reduced from six months to four months. In case of seasonal work, the probationary period shall last up to three working days. The employer may terminate the employment contract with probationary work for the performance of seasonal work within a period of three days upon entering into the employment contract with a probationary period. For the duration of the probationary period, the employee may terminate the employment contract with a notice period of three working days. On the grounds of an assessment for unsuccessful completion of the probationary period, the employer may terminate the employment contract after the expiry of the probationary period.
Overtime work may not exceed 8 hours weekly and 190 hours annually. If, due to the specifics of the process, the working activities cannot be interrupted or if shifts cannot be organized, this limitation does not apply. However, even in such circumstances, the average overtime work over any period of three months cannot exceed eight hours weekly. Exceptionally, the employees of the Ministry of Internal Affairs and employees of the Agency for National Safety, which have particular duties and authorizations, may exceed the limit of 190 hours annually if conducting urgent tasks. In such cases, employees should give prior written consent. The employer is obliged to keep a register of overtime work and to indicate the overtime work separately in the monthly salary calculation. The employee who has worked over 150 hours annually and has not been absent from work for more than 21 days in one year (excluding the annual holiday), in addition to the salary supplement, is entitled to a bonus in the amount of one average salary in the Republic of North Macedonia.
The full-time hours of work shall not exceed 40 hours per week. The workweek shall last, by rule, five workdays.
The employee is entitled to an annual holiday of at least 20 days. The annual holiday may be prolonged to 26 days by an employment contract or collective agreement. The employee and the employer may agree on how the holiday entitlement is consumed. However, one part of the holiday must last for two uninterrupted weeks and the employer is obliged to allow two weeks uninterrupted holiday until the end of the current year. The employee may use the rest of the holiday entitlement until 30 June in the following year. The employee receives compensation for the time spent on holiday. The compensation should correspond to the average of the salaries paid in the last 12 months. Additionally, to the annual holiday, employees are entitled to a paid holiday due to the following personal or family reasons:
- marriage – 3 days;
- marriage of child – 2 days;
- giving birth or adopting a child – 2 days;
- death of marriage partner or child – 5 days;
- death of parent, brother or sister – 2 days;
- death of grandparents – 1 day;
- expert exam for the employer’s needs – 3 days; and
- natural disasters – 3 days.
There is no annual limit on the number of sick days an employee can take. Sick pay depends on the duration of the sick leave. The employer bears the burden of the sick pay if the employee’s inability to work lasts up to 30 days. Above 30 days, health insurance should calculate the sick leave.
The female employee shall be entitled to paid leave during pregnancy, childbirth and parenting in the duration of nine uninterrupted months, or 15 months in the case of twins or multiple birth. Based on an opinion issued by the competent healthcare authority, the female employee may commence the pregnancy, childbirth and maternity leave 45 days prior to delivery, and mandatorily 28 days prior to delivery. During maternity leave, women receive salary compensation (allowance) paid from the State Budget. This compensation is the average amount of pay to the worker in the last 12 months for which the contributions for compulsory health insurance were paid.
If the parental leave is not used by the female employee, the right to parental leave shall be used by the father or the adoptive parent of the child.