What HR Specialists in Serbia Must Know About Serbian Labor Regulations
Serbia has become an attractive destination for foreign investors due to its favorable business climate, strategic location, and skilled workforce. However, investing in Serbia comes with its challenges, including navigating the country’s labor regulations. The Serbian labor market is regulated by various laws and regulations that are continually changing, making it essential for foreign investors to understand the legal framework to operate effectively. This article aims to provide a comprehensive guide for foreign investors on everything they must know about Serbian labor regulations.
Overview of Serbian Labor Regulations
Serbian labor regulations are governed by various laws and regulations, including the Labor Law, the Law on Foreigners, and the Law on Employment of Foreigners. The Labor Law is the primary legislation that governs the employment relationship in Serbia, including employment contracts, working hours, salaries, and benefits.
Labor Law
The Labor Law applies to all employees working in Serbia, irrespective of their nationality or residence status. The law sets out the minimum employment standards, including a minimum wage, maximum working hours, and annual leave entitlements. The law also provides for the establishment of labor unions and collective bargaining agreements.
Law on Foreigners
The Law on Foreigners regulates the entry, stay, and work of foreigners in Serbia. The law requires foreign workers to have a valid work permit before commencing work in the country. The work permit is issued by the Serbian authorities, and the application process can take up to 30 days.
Employment of Foreigners
The Law on Employment of Foreigners sets out the rules for hiring foreign workers in Serbia, including the requirement to advertise the job vacancy locally before offering the position to a foreigner.
Employment Contracts
Under Serbian labor regulation, there are two types of employment contracts: fixed-term and indefinite-term contracts. A fixed-term contract is for a specific period, while an indefinite-term contract has no end date. Both types of contracts can be either full-time or part-time. Serbian labor regulation requires that all employment contracts must be in writing and must contain the following information:
- the identity of the employer and employee
- the job title and description
- the start and end dates of the contract (for fixed-term contracts)
- the salary and other benefits
- the working hours and rest periods
- the notice period required for termination of the contract
Minimum Wage in Serbia
The minimum wage in Serbia is determined by the government and is currently set at 32,126 Serbian dinars per month (approximately $320 USD). However, some industries have their own collective bargaining agreements that set higher minimum wages. Employers are required to pay their employees at least the minimum wage, and failure to do so can result in penalties and legal action.
Working Hours
The Labor Law sets a standard workweek of 40 hours, with a maximum of eight hours per day. However, employers can agree with employees to a shorter workweek or longer working hours, but not more than 48 hours per week. Overtime work is allowed under certain conditions and must be compensated at a rate of at least 26% above the regular hourly wage.
Vacation and Holidays
Employees in Serbia are entitled to at least 20 days of paid vacation per year, with an additional day added for each year of service up to a maximum of 30 days. Employees are also entitled to paid public holidays, which include New Year’s Day, Orthodox Christmas, International Workers’ Day, and others. The exact number of public holidays may vary depending on the region.
Wages and Benefits
The minimum wage in Serbia is currently set at RSD 32,126 per month (approximately $327), but most employees earn significantly more. Employers must pay employees their wages on a regular basis, usually monthly, and provide them with a payslip that outlines their earnings and deductions.
In addition to wages, employees are entitled to a range of benefits, such as health insurance, pension contributions, and unemployment insurance. Employers must pay their share of these contributions, which are calculated as a percentage of the employee’s gross salary.
Termination of Employment
Employment contracts can be terminated by either the employer or the employee, but specific rules and procedures must be followed. Employers can terminate an employee’s contract for a variety of reasons, such as redundancy, poor performance, or misconduct. However, they must provide the employee with written notice of termination and a valid reason for the dismissal. Employees who have been terminated have the right to appeal the decision and may be entitled to compensation.
Employees can also terminate their contract, but they must provide their employer with written notice and a valid reason for leaving. The length of the notice period will depend on the employee’s length of service and can range from 15 days to three months.
Collective Agreements
In Serbia, collective agreements are legally binding agreements between employers and employee representatives that set out terms and conditions of employment, such as wages, working hours, and benefits. Collective agreements can be signed at the company, industry, or national level, and they apply to all employees covered by the agreement. Employers and employee representatives negotiate collective agreements, and they must be registered with the relevant authorities.
Workplace Health and Safety
The Law on Health and Safety at Work sets out the rules and procedures for workplace health and safety in Serbia. Employers are required to provide a safe working environment and take all necessary measures to prevent accidents and injuries. They must also provide employees with appropriate training and equipment to ensure their safety at work.
Employers must have a health and safety policy in place, which outlines the steps they will take to ensure workplace safety. They must also appoint a competent person or team to manage health and safety in the workplace. Employees also have a responsibility to comply with workplace health and safety policies and procedures.
Trade Unions
Trade unions play an essential role in Serbia’s labor regulation. They represent the interests of employees and negotiate collective agreements on their behalf. Trade unions also have the right to strike, but specific procedures must be followed before a strike can take place.
Foreign investors should be aware that unions have a strong presence in Serbia, and collective bargaining is common. Therefore, it is crucial to engage with employee representatives and trade unions to ensure that labor regulations are being followed.
Hiring Foreign Workers
Employers in Serbia can hire foreign workers, but they must obtain a work permit from the Serbian Ministry of Labor, Employment, Veteran, and Social Affairs. Work permits are issued for specific job positions and are valid for up to a year, with the possibility of extension.
Foreign workers must also obtain a residence permit and register with the relevant authorities. Employers must comply with all applicable labor regulations when hiring foreign workers, including minimum wage requirements and other labor standards.
Conclusion
In conclusion, foreign investors looking to do business in Serbia must understand the country’s labor regulations to avoid legal and financial issues. Serbia’s labor laws are based on the Labor Law, which regulates employment contracts, working hours, wages, benefits, and termination of employment. Collective agreements, workplace health and safety, and trade unions also play an essential role in labor regulation in Serbia.
Foreign investors should also be aware of specific procedures for hiring foreign workers, including obtaining work permits and complying with labor regulations.
PS: Foreign investors can benefit from Serbia’s skilled workforce, low labor costs, and favorable tax policies. However, compliance with labor regulations is essential to avoid potential legal and financial pitfalls. By understanding Serbian labor regulation and engaging with employee representatives and trade unions, foreign investors can ensure that they are following all applicable labor regulations and operating ethically and sustainably in Serbia.
For more information on this or any other legal, tax, or business topic, feel free to write to us at [email protected] at any time or call us at phone number +381113281914 every working day from 08:30 to 16:30.