- Overview: Montenegro
- Global HR Compliance
- Global PEO and payroll
- Visa, work permit & immigration support
- Expand without a company set up
- Contractor vs. employee: which is better?
Global HR Compliance in Montenegro
If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in Montenegro 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 Montenegro, 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 Montenegro 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 Montenegro.
Hiring and Firing Workforce in Montenegro Guide
Permanent employment contracts
An employment contract for an indefinite period of time shall be binding on the contracting parties until one of them terminates it or until it ceases to be valid in another manner determined by Labour Law. If the employer fails to sign an employment contract with the employee in written form prior to assuming work responsibilities, it is considered that the employee has established an employment relationship for an unlimited duration of time as of the date of assuming work responsibilities, should the employee accept that employment. In this case, the employer must sign an employment contract for an unlimited period of time within three days from the first day the employee assumes work responsibilities.
An employment contract may exceptionally be concluded for a definite period of time, the termination of which is determined in advance by a deadline, the performance of a specific job or the occurrence of a specific event. An employer may not conclude one or more employment contracts with the same employee if their duration, continuously or intermittently, is longer than 36 months. An employment contract may be concluded for a definite period of time and longer than 36 months if this is necessary due to the replacement of a temporarily absent certain employee, seasonal work and work on a specific project until the end of the project.
#Employment Termination and Severance Pay (Dismissal)
An employer may terminate an employee’s employment contract if there is a justified reason for doing so, namely:
- For failure to achieve the results of work determined by a collective contract, an act of the employer or a contract of employment, for a period of not less than 30 days, if the employee has previously been given instructions for work.
- For non-compliance with the obligations stipulated by law, collective contract and employment contract, which must be harmonized with the law and collective contract.
- If his/her behavior is such that he cannot continue working with the employer in the cases prescribed by law and collective contract or by the act of the employer, which must be harmonized with the law and collective contract.
- If he refuses to conclude the annex to the employment contract (in situations prescribed by the law).
- If he/she abuses the right to absence due to temporary disability to work.
- Due to economic problems in the business.
- In the case of technical, technological or restructuring changes which have led to the elimination of the need for the employee’s work.
#It is prohibited to dismiss
The employer may issue decision on termination of the employment contract after previously warning the employee of the existence of reasons for dismissal. The warning shall be given in writing and shall contain the reasons for dismissal, evidence indicating that the conditions for dismissal have been met and the deadline for giving a response to the warning. The deadline may not be shorter than five working days.
Workers enjoying special protection:
- Workers’ representatives
- Pregnant women and/or women on maternity leave
- Workers with family responsibilities
- Confirmed injured workers
- Workers with disabilities
The employee has the right and duty to remain at work for at least 30 days from the day of delivery of the termination of the employment contract, ie the decision on termination of employment (notice period). The employer may terminate the employment contract without the obligation to respect the notice period due to a serious breach of employment in accordance with the collective agreement. The employee may, if agreed with the employer, cease to work before the expiration of the time for which he is obliged to remain at work, provided that during that time he is provided with salary compensation in the amount determined by the collective agreement and employment contract. If the employee, at the request of the employer, ceases to work before the expiration of the notice period, he is entitled to salary compensation and other rights from work and on the basis of work, as if he had worked until the expiration of the notice period. During the notice period, the employee has the right to be absent from work for at least four hours a week in order to seek new employment.
For an employee whose work is no longer needed, the employer is obliged to pay severance pay in the amount of at least 1/3 of his monthly average salary without taxes and contributions. The severance pay cannot be lower than the sum of one third of the employee’s average gross salaries paid for the previous six months, for each year of work with that employer, that is, 1/3 of the average monthly salary without taxes and contributions in Montenegro, if this is more favourable for the employee. A person whose work has ceased to have a right is entitled to the payment of severance pay, provided that he has spent at least 18 months in employment with that employer.
#Employee Benefits and Contributions
Mandatory benefits required by law to be provided by an employer
- Paid annual leave
- Paid leave due to personal needs
- Absence from work due to state and religious holidays
- Absence from work due to health reasons
- Maternity and Parental leave
The employer is obliged to register the employee for compulsory social insurance (health, pension and disability insurance and unemployment insurance).
Non-mandatory benefits that are offered by an employer
Jubilee awards for 10, 20 and 30 years of work.
The employment contract may provide for probationary work for the performance of job tasks. The trial operation may not be longer than six months, except for a crew member of the long-distance merchant navy, which may last longer, i.e. until the return of the ship to the home port. The duration of the probationary period and the manner of conducting the probationary period shall be determined by a collective agreement with the employer or an employment contract.
The working hours of an employee may last longer than the contracted working hours (hereinafter: overtime work), in case of a sudden increase in the volume of work, as well as in case of force majeure, and in other exceptional cases. Overtime may last only as long as it is necessary to eliminate the reasons for which it was introduced, provided that working hours may not exceed 48 hours per week on average, within a period of four months. Collective agreement may provide for a maximum duration of 250 hours per year. The salary is increased in accordance with the collective contract and the employment contract for overtime work.
Full-time work is 40 hours in a working week. A collective agreement may stipulate full-time work shorter than 40 hours in a working week.
Any employee has the right to annual leave each calendar year for a number of days as specified in the collective contract or the employment contract. Annual leave must not be shorter than 20 working days. This legal minimum increases based on the criteria established by the collective contract and the employment contract. The annual leave may be used at once or in two or more parts, if so agreed with an employee. If an employee uses the annual leave in parts, the first part must be used in a period of at least two consecutive working weeks during the calendar year, while the remainder must be used by June 30th of the following year at the latest.
Absence from work due to health reasons
An employee has the right to be absent from work in cases of temporary disability due to illness, injury at work or in other cases in accordance with health insurance regulations. The employee is obliged to submit the certificate from the medical doctor, in person or via another person, within three days from the date when the temporary inability to work arises. The employee shall submit the report on temporary inability to work within five days from the date of issuance of the report. The employee has the right to be absent from work because of voluntary donation of blood, tissues and organs, in accordance with the law and the collective contract. If an employee suffers an injury or damage at work or in connection with work, the employer is obliged to compensate him/her for the damage.
Paid leave due to personal needs
An employee has the right to leave from work with salary compensation (paid leave), in case of marriage, birth of a child, serious illness of a close family member, taking a professional exam related to performing work with the employer and in other cases determined by collective agreement and an employment contract. The duration of paid leave shall be determined by a collective agreement and an employment contract. An employee has the right to paid leave of seven working days due to the death of a close family member. A member of the immediate family shall be considered: spouse, children (married, illegitimate, adopted and stepchildren), brothers, sisters, parents and adoptive parents. A serious illness shall mean a disease for which health care is provided in full from the funds of the compulsory health insurance, in accordance with a special law.
An employed woman shall use compulsory maternity leave of 98 days, of which 28 days are before the day of expected birth, and 70 days from the birth of the child. The day of the expected birth shall be determined by the competent specialist doctor. Maternity leave for a period of 70 days from the birth of a child may be used by both parents at the same time, if two or more children have been born.
The child’s father has the right to use leave from the day of the child’s birth, in case the mother died in childbirth, seriously ill, abandoned the child, if deprived of parental rights or serving a prison sentence.
Acumen International can help you fast-track your possibilities of entering and expanding your business in Montenegro 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.