Well, how does it work in Serbia?
Labor & Employment Law
Serbia’s Labor Law follows current European standards and international labor conventions.
Labor relations in Serbia are regulated by laws, collective and individual contracts and regulations adopted by employers. Labor relations can be entered into with a person above the age of 15 who meets requirements for work at certain tasks and is is good general health.
Labor contracts may be signed for an indefinite or a definite period of time. Labor contract for a definite period of time may be established for specific engagements, such as seasonal jobs, specific projects, etc. Contracts for a definite period of time may last up to 1 year.
The Labor Law allows temporary contracts defining temporary work as work related to the employers line of business that does not exceed 120 days during a calendar year. In that case, an employee is entitled to pension, disability insurance, and health insurance. In addition, companies can meet their needs by using part time working contracts. Finally, short-term agreements include special service contracts for jobs outside the company’s line of business, in particular, physical labor or intellectual work.
The labor contract may be concluded for part–time work, for definite or indefinite period of time. The employee is entitled to social insurance and to all the rights stemming from the employment contract in proportion to the time spent at work.
Salaries and Salary Compensations
The minimum salary has to be at the statutory minimum wage determined by mutual consent of the Serbian government, labor unions, and the association of employers currently standing at cca €1.00 per hour. In addition, the employee has the right to receive additional percentage of the salary based on the overtime, public holidays, night work, and work in shifts. Salary compensations include the following:
- Compensations during sick leave due to occupational disease or injury at work (65% of the salary)
- Compensations during the annual leave, public holidays, and paid leave (100% of the salary).
The base for calculation of personal income tax and contributions is gross salary. The amount of 6,554 RSD or approximately 64 EUR is deductible amount from the base (gross salary) for personal income tax calculation.
NET salary (EUR) 200.00 €
Personal income tax 12.00% – 24.90 €
Contributions (employee) 17.90% – 48.30€
GROSS salary 273.20 €
Contributions (employer) 17.90% – 48.30 €
Total staff cost 321.60 €
Statutory working hours in Serbia are 40 hours per week, whilst time over the statutory hours is considered overtime and may amount up to 4 hours per day or 8 hours per week. The Law states that an employee is obliged to work overtime in cases of enforced measures, sudden increase in work volume, and when an unplanned task must be completed within a specified time limit.
It is required to reduce working hours for work done under particularly difficult working conditions and/or harmful effects. The working hours can be decreased by up to 10 hours per week and proportionally to the harmful effects of the working conditions.
Recess, Leave and Absence
A recess is at least 30 or 15 minutes depending on whether an employee works full time or 4-6 hours a day. An employee has the right to a recess between two consecutive working days of at least 12 hours, while a weekly recess is no less than 24 hours.
Annual leave can be used after a minimum of 6 months from the employment contract starting date and totals a minimum of 20 days per year.
Maternity leave lasts up to 3 months starting from the date of delivery. Upon the expiry of the maternity leave, the mother or father of the child may use a paid leave for infant care for a total of 365 days, which includes maternity leave.
Termination of Employment
The employment may be terminated based on the employee’s or the employer’s initiative, and the expiration of the contract. The employee is obliged to give a 15 days advance notice in writing to the employer. In addition, the statutory retirement age for men is 65 years of age and for women-60 years of age. However, employees may retire following 15 years of paying into the statutory pension plan and reaching the required age for retirement.
Layoffs can be individual and collective.
An individual can be dismissed for just cause related to the employee’s work ability, qualifications, behavior, and/or employer’s requirements in next cases:
- If it is determined that an employee fails to fulfill his work tasks or does not have the necessary qualifications to perform the jobs assigned;
- If an employee refuses work duties and responsibilities determined in the contract of employment;
- If an employee fails to comply with the work discipline;
- If an employee commits a criminal offense at work or in relation to work;
- If an employee fails to return to work within 15 days from the unpaid leave expiration date;
- If an employee abuses sick leave;
- If due to technological, economic or organizational changes a particular job becomes redundant.
If the employment contract has been terminated due to unsatisfactory performance or lack of required qualifications and ability, an employee is entitled to a severance pay.
A collective layoff is at effect if the employer is dismissing at least 10% of a minimum of 50 employees within one calendar year. The employer is obliged to present a ‘preservation plan’ to the labor authorities and labor union representatives.
Employment Relation with Foreigners
Any foreign person who is to remain in Serbia for more than 90 days or is to take up employment during any period must apply for a residence and work permit prior to entering Serbia. Work permits are valid for 3 to 12 months and are renewable.
- A residence permit: Temporary or Permanent Residence
- An application by the company (submitted to the Labor market office)
- An application by the individual (submitted to the Labor market office)
- A work permit issued by the Labor Market office.