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  1. Overview: Serbia
  2. Global HR Compliance
  3. Global PEO and Payroll
  4. Work permit for hiring expats via PEO
  5. Expand without a company set up
  6. Contractor vs. Employee: Which Is Better?
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Global HR Compliance in Serbia

If you hire an international workforce or plan to hire, this Global HR Compliance in Serbia Guide will help you understand the nuances of labour legislation in the country.

When the company is planning to enter a new foreign market in Serbia and has a need to employ a local national there, the first question to answer is how it is going to make local hires.

We have designed a Global Employer of Record service to help you outsource the global employment of your foreign workforce to companies like ours.

This solution helps you employ your global sales force in Serbia as well as in other countries of the world, and provide pay and benefits to your employees, as well as administer any business expenses with our help.

Our solution is different from other hiring modes in that it helps you engage your foreign workforce in full compliance with the local labor legislation. This means you are protected from any non-compliance and employee misclassification risks while we bear all employment risks, not you.

So, it looks very much like hiring your in-house sales force in your home country. However, you focus on only on your global business development while we admin your global HR. In addition, you don’t need to open your own entities in the foreign countries and can leverage our infrastructure in Serbia instead. With our service, you can become a global company with reduced costs and minimized time and effort on your end.

Your employed foreign sales force will devote 100% of their time to your company product and may stay with you longer than foreign independent sales reps.

The global Employer of Record solution is a 100% compliant solution that guarantees you and your employees fully comply with local legislation in Serbia.

We are experts in global workforce employment in Serbia, 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 it, regardless of time zones. Our goal is to create tailored labour 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 Serbia.

See the Hiring and Firing Workforce in Serbia Guide below for a general overview of labour rules and regulations in the country. Or contact us if you need to employ workers in Serbia or would like to get more details.

Hiring and Firing Workforce in Serbia Guide

Types of Employment Agreements in Serbia

There are three types of collective agreements:

  • individual,
  • special (industrial)
  • general.

An individual collective agreement is concluded at the level of the employer, between the employer and a representative trade union. Employers that do not conclude individual collective agreements frequently regulate employment-related matters through work rules. Special (industrial) agreements are concluded at the level of the particular sector. A general collective agreement is concluded at the state level and is applicable to all employers and employees in Serbia. There is currently no general collective agreement in force. The Labor Law does not formally distinguish between different categories of workers. A traditional employment relationship is the most usual way of hiring personnel in Serbia. There are two types of employment relationships, depending on their duration. As a rule, an employment relationship is concluded for an unlimited period of time. Exceptionally, employment agreements can be entered into for a limited period of up to 24 months, or longer in certain specific cases.

Flexible Employment Engagement Methods

Workers can also be engaged outside an employment relationship, in cases and subject to the conditions prescribed by the Labour Law. These flexible types of engagement include the following:

  • Temporary and occasional work (up to 120 working days a year).
  • Service agreement (only for work that is outside the employer’s business activities).  Agreement on professional improvement (concluded mainly with trainees).
  • Additional work (concluded with employees engaged full-time by another employer).

Permanent employment contracts

The Labour Act sets forth the mandatory terms of a contract of employment. Amongst those terms are the type and description of the job, working hours and basic salary at the date of the conclusion of the contract. However, some terms may be implied if not explicitly regulated by the contract of employment.

Temporary and occasional employment contracts

Temporary and occasional work is allowed in Serbia. It is primarily used in the agriculture, tourism and construction sector. The employment status of employees who fall under this category is still not sufficiently regulated. This type of work is used by providers of technical services, with large entrepreneurs occasionally hiring smaller entrepreneurs (or self-employed workers) to meet the needs of an increased workload.

Fixed-term contracts

Temporary workers

A fixed-term employment agreement can be concluded for a period of up to 24 months, or longer in certain specific cases. Employees hired on this basis have the same rights and obligations as employees engaged for an unlimited period of time. In addition, individuals can be engaged under agreements for temporary and occasional work. The maximum duration of these agreements is 120 working days per year. This type of engagement is much more flexible and these workers do not have the same statutory rights as regular employees who are generally employed for an indefinite period of time.

Agency workers

Employers also engage workers through agencies that provide outsourcing services. The Law on Agency Employment does not stipulate the possibility for the agency employees to be employed by another member of the group.

Part-time workers

Part-time employees generally have the same rights as full-time employees, in proportion to the time spent at work.

Employment Termination and Severance Pay (Dismissal)

Labour relations shall be terminated:

  • With the expiry of the term to which they have been entered into;
  • When the employee turns 65 and has a minimum of 15 years of retirement insurance, unless otherwise agreed between employer and employee;
  • By mutual agreement between employer and employee;
  • By cancellation of the labour contract by employer or employee;
  • Upon request of a parent or guardian of an employed minor under 18 years of age
  • With the death of the employee;
  • In other cases stipulated under the law.

Employee shall be entitled to terminate the labour contract with his/her employer.  Employee shall submit in writing notice on termination of the labour contract 15 days before the date stated in the notice as the date of termination of employment, at the latest.  Should termination of employment result from the employer’s violation of duties stipulated under the law, general document and labour contract, the employee shall be entitled to all rights resulting from the labour relationship, as in the case of wrongful dismissal.

Contract Termination by the Employer

The employer may terminate the labour contract to an employee for a just cause relating to his/her working ability, behaviour and employer’s needs, as follows:

  • If an employee does not perform, i.e., does not have the needed knowledge and abilities to perform the job on which he/she is employed;
  • If an employee through his/her own failure violates the work duties set in the general document and labour contract;
  • If an employee does not comply with the work discipline as stipulated in the general document i.e. his/her behaviour is such as to preclude further work with the employer;
  • If an employee commits a criminal offence at work or in relation to work;
  • If an employee does not return to work with the employer within 15 days from the expiry of the period of unpaid leave of dormancy of employment in terms of this law;
  • If an employee abuses the right to leave for temporary inability to leave;
  • If the employee refuses the annexe to the labour contract;
  • If due to technological, economic or organizational changes a particular job becomes redundant or volume of work is reduced. In case of termination of employment to the employee, the employer may not employ another person on the same job prior to the expiry of six months from the date of termination of employment.

The employer shall be required to notify the employee of the reasons for his/her dismissal before termination of the labour contract and leave at least a five-day term to respond to the rationale stated in the notification. The notification shall contain the grounds for dismissal, facts and evidence suggesting that the conditions have been met for the dismissal and response to such notification.

Employee Protection against Dismissal in Serbia

In Serbia, employees are strongly protected against dismissal. An employer can only dismiss an employee on the basis of the following grounds (Labour Law):

  • Failure to achieve work results, that is, where the employee does not have the required knowledge and competence for performing his/her tasks (incompetence).
  • Work-related criminal act.
  • Failure to return to work within 15 days after the expiry of unpaid leave or stay of employment.
  • Intentional breach of work duty.
  • Breach of workplace discipline.
  • Technological, economic or organisational changes within the employer (redundancy).
  • Refusal of the employee to add an annex to the employment agreement for certain specific reasons.

Types of Protection against Employee Dismissal

Employees are protected from dismissal during:

  • Pregnancy
  • Maternity leave
  • Childcare leave
  • Special childcare leave

Additionally, an employer cannot dismiss an employee due to:

  • His/her status
  • Activities performed in the capacity of employees’ representatives
  • Membership in a trade union or participation in trade union activities

Categories of Protected Employees

Certain categories of employees are specially protected. For example, female employees enjoy protection during maternity leave. Employees with disabilities also have certain special rights. Trade union representatives and employees’ representatives also belong to protected categories.

Notice Period in Serbia

The notice period in the case of unilateral termination by an employee cannot be shorter than 15 days, and no longer than 30 days. There is one exception regarding termination during probationary work. Prior to the expiry of the time for which the probation work was contracted, the employer or the employee may terminate the employment agreement with a notice period which cannot be shorter than five working days.

Severance Payments

In the event of termination of employment due to redundancy, a severance payment is a prerequisite for the termination of employment and a mandatory condition for the validity of the decision on termination. In the case of termination of employment due to redundancy, a severance payment is mandatory. The amount of the severance payment cannot be lower than the sum of one-third of the employee’s salary for each full year of employment with a particular employer. There are no mandatory severance payments in other cases of termination. On retirement, employees have the right to a severance payment equivalent to two average salaries in Serbia.

Mandatory Employee Benefits and Contributions

Mandatory benefits are required by law to be provided by an employer

  • annual leave and annual allowance;
  • paid leave;
  • holiday allowances;
  • overtime payments;
  • maternity and paternity leave;
  • daily meal allowance;
  • allowance for commuting to and from work, in the amount of the cost of public transport fare;
  • social insurance contribution: pension and health insurance, and insurance in case of unemployment.

Non-mandatory benefits that are offered by an employer 

  • Gifts for children below the age of 15 for Christmas and New Year;
  • Insurance (private health, pension, life);
  • Wellness and recreational programs, team gatherings;
  • Work equipment (mobile phone, computer, assigned car, parking card, etc.);
  • Flexible forms of work as a type of benefit;
  • Additional paid days;
  • Kindergarten for children and other initiatives to support employees;
  • Support and sponsorship of further education and training of employees;
  • Reward bonus for achieving goals;
  • Bonus based on company/team success and individual performance;
  • Employees in Serbia are likely to observe a salary increase of approximately 7% every 20 months.


Upon request of the employer, an employee shall work longer than his/her full time in case of force majeure, an unexpected increase of the volume of work and in other instances when it is necessary to finish unplanned work by a set deadline (hereinafter: overtime). Overtime cannot last for more than 8 hours per week, or four hours a day per employee. On-call duty in health institutions, like overtime, shall be covered by a special piece of legislation. Overtime is rarely asked of Serbian workers but is allowable under extreme circumstances. Regardless of rank in the company, overtime is compensated with at least 125% of the normal wage.

Working hours

The full-time working hours are 40 hours per week. Any extension of the full-time working hours is considered as overtime work, which must be additionally compensated by the employer.

Rest breaks

Employees are entitled to a minimum of:

  • 30-minute rest break during the daily working hours.
  • Daily break of at least 12 hours.
  • Weekly break of at least 24 hours.

Shift Work

If work is organized in shifts that include night work, the employer must provide for changes of shifts, so that no employee works continuously for more than one week on night shifts. An employee can only work longer than one week on night shifts if he/she consents in writing.

Annual Leave

The minimum duration of annual vacation is 20 days per calendar year. This minimum can be increased based on various criteria determined in the individual collective agreement, the work rules or the employment agreement (as applicable).

Minimum paid holidays

Annual vacation is fully paid for by the employer. In addition, employees are entitled to an annual vacation allowance. The amount of the annual vacation allowance must be determined at the level of the employer in the applicable individual collective agreement, the work rules or the employment agreements. The minimum amount of the respective allowance is not determined by the Labour Law.

Sick Leave

Entitlement to paid time off 

An employee is generally entitled to sick leave any time he/she is sick or injured, without limitation. During the first 30 days of sick leave, the employee receives compensation amounting to either: 65% of his/her average salary in the preceding 12 months, in the case of non-work-related sickness or injury.  100% of his/her average salary in the preceding 12 months, in the case of work-related sickness or injury.  The employer pays compensation during the first 30 days. After then, sick leave is compensated by the state. There are no limitations on the total duration of sick leave or the number of sick leaves.

Entitlement to unpaid time off

Any sick leave triggers a right to paid time off.

Recovery of sick pay from the state

After the first 30 days of sick leave, the employer actually pays the sick pay but can recover it subsequently from the state.

Parental Leave

Maternity leave includes:

  • Pregnancy leave starts between 45 and 28 days before the due date and lasts for three months after the birth.
  • Childcare leave starts on the expiry of pregnancy leave.

Pregnancy leave and childcare leave jointly last 365 days and are fully compensated by the state. Employees are protected from termination during maternity leave. During maternity leave, a woman has the right to maternity pay.

Paternity leave includes:

As an exception, the father can use the mother’s maternity leave in certain specific cases; for example, if the mother abandons the child, dies or cannot use her maternity leave for a justified reason (such as illness, serving a prison sentence and so on).

Acumen International can help you fast-track your possibilities of entering and expanding your business in Serbia 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.

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