Croatia HR Information

Updated on: 2025/08/05 15:25 (UTC)

Overview

Employment in Croatia is governed by the Croatian Labor Act, the constitution, collective bargaining agreements and individual employment agreements, as well as international conventions and treaties.

Hiring

Employment Contracts

Under the Labor Law, employment agreements must be in writing and contain at least the following information:

• names and addresses of the parties;
• place of work;
• work position or short list of tasks an employee will be performing;
• first day of work;
• expected duration of the agreement (provided it is being entered into for a definite period of time);
• duration of paid annual leave;
• notice periods;
• basic wage, wage increments, and time of payment; and
• duration of basic work day or work week.

Employees can be hired for a probationary period of no longer than six months.

The minimum notice period during probationary work is seven days.

Definite-term contracts. If not otherwise specified, it is presumed that the employment contract is for an indefinite period. Employers may only require workers to sign employment contracts for defined periods if the end of the employment is defined in advance by a set deadline, performance of specific work or occurrence of a specific event.

The first definite-term employment agreement can be entered into for unlimited time, but total duration of all consecutive employment agreements (including the first) cannot be longer than three years unless it is necessary due to replacement of a temporarily absent employee or is allowed by the law or a collective bargaining agreement.

If a definite-term employment agreement has been entered into contrary to these provisions or if an employee continues to work for the same employer after a definite-term employment agreement expires, the employee is considered to be working for an indefinite term.

On Sept. 29, 2022, the Croatian government announced it had implemented amendments to its Labor Code to prevent unjustified consecutive fixed-term employment contracts, limiting the duration of those contracts to a maximum of three years for the same worker.

Restrictions on Hiring

Employers are not allowed to hire a person under 15 years old or older than 15 but still attending elementary school. Minors may not be employed in jobs that could endanger their safety, health, morals, or development.

Recordkeeping

Employers are required to provide the Croatian Institute for Pension Insurance (HZMO) with certain employee data and to report any change in employee status within 24 hours.

Employers are also required to register:

• themselves as employers with the Croatian Institute for Health Insurance (HZZO) within eight days of an employee’s starting work and with the HZMO within 24 hours,
• new employees with the HZZO within eight days after the start of work and with the HZMO between eight days prior to the start of work and the actual start of work and
• the end of the employment relationship with the HZZO within eight days after termination and with the HZMO within 24 hours.

Background Checks

Employers may perform employee background checks (including medical exams and criminal records checks) at their own cost. Employees must be informed about how and why background checks will be performed, and employers are not allowed to request information that is not directly connected to employment.

Noncompetition Agreements

For the duration of employment, the employee is prohibited from performing work on his own behalf or on behalf of third persons that falls within the primary employer’s scope of work without that employer’s approval.

A post-contractual noncompete clause can only be enforced if it:

• is in writing,
• is not between an employer and a minor or a person who receives a lower than average wage,
• serves to protect only the legitimate business interests of the former employer,
• does not exceed two years, and
• requires the employer to pay compensation for the duration of the prohibition of not less than 50 percent of the average monthly salary paid to the employee during the last three months prior to termination.

Reference Citations

Employment Contracts: Labor Law, 2014, arts. 11-15, 53 (Croatian)

Restrictions on Hiring: Labor Law, 2014, arts. 19-21 (Croatian)

Recordkeeping: Labor Law, 2014, art. 5 (Croatian)

Background Checks: Labor Law, 2014, arts. 24-25 (Croatian)

Noncompetition Agreements: Labor Law, 2014, art. 102 (Croatian)

Immigration and Work Permits

In General

Croatian law generally divides foreigners into two categories. Foreigners from most EU member states do not need a labor permit to work in Croatia but must simply register their residence. Foreigners from third countries must obtain a residence and work permit or a work application certificate before beginning employment. Prior to applying for residency and a work permit for foreigners employers must request the relevant labor market standard from the Croatian Employment Service. Upon a determination that no unemployed persons in Croatia meet the employer’s job requirements, the employer may then apply for a work permit with the Ministry of the Interior, which will petition the Croatian Employment Service to issue an opinion on hiring a specific foreigner with a Croatian employer.

Visas and Work Permits

Employers cannot employ a person who illegally resides in Croatia, so foreign employees need to regularize their residence and employment documentation before they start work.

Croatian law generally divides foreigners into two categories: citizens from EU member countries and citizens from third countries, although citizens from EU countries that have placed restrictions on their employment markets for Croatian citizens (Malta, the Netherlands, Austria, Great Britain and Slovenia) have to go through the same procedure as third-country nationals.

Foreigners from other EU member states do not need a labor permit to work in Croatia but must simply register their residence. The type of registration depends on whether a stay will exceed three months in a six months’ period and on its purpose.

Foreigners from third countries and from EU countries that have set restrictions on Croatian citizens must obtain a residence and work permit or a work application certificate before beginning employment. The Parliament of Croatia passed a new Foreign Nationals Act on Wednesday, stipulating that the government will no longer set employment quotas for foreign nationals. Permits are usually granted for one year.

Effective January 1, 2021, the government stopped setting employment quotas and began requiring employers to conduct a labor market test before submitting applications for residence and work permits for foreigners.

A work application certificate is a work permit for specific groups of foreigners and can be granted for a maximum period of 90, 60 or 30 days depending on the type of work a foreigner will perform in Croatia.

The obligation to obtain a visa to enter Croatia depends on the nationality of the foreigner. U.S. nationals, for example, do not require a visa to enter Croatia. A foreigner cannot work in Croatia on the basis of a visa alone but must also have been issued a work permit, although EU citizens, except those whose governments have placed restrictions on Croatian nationals, can work in Croatia without having to obtain any permit.

Digital Nomad Visa. Professionals can apply for a temporary visa that allows them to work remotely in Croatia for a company that does not have operations in the country. The visa is valid for one year and cannot be extended. However, a new application for the temporary visa can be submitted six months after the expiration of the previously granted permit.

Penalties

There are numerous penalties prescribed for violating the rules on entry and work of foreigners in Croatia. Depending on the specific violation, penalties can range from 500 to 60,000 kuna. Imprisonment for up to 60 days is also possible in certain cases. Both the foreign employee and his or her employer can be found liable for violations of the law.

Reference Citations

Visas and Work Permits: Aliens Act, 2013, arts. 73-85 (Croatian)

Penalties: Aliens Act, 2013, arts. 228-229 (Croatian)

Nondiscrimination

In General

Employers may not discriminate against employees on the grounds of race, ethnic affiliation, color, gender, language, religion, political or other beliefs, national or social origin, financial status, trade union membership, education, social status, marital or family status, age, health condition, disability, genetic heritage, gender identity, or sexual orientation.

A person claiming to be a victim of discrimination pursuant to provisions of the Antidiscrimination Act may file a lawsuit and request to:

• establish that the defendant has violated the plaintiff’s right to equal treatment or that the action the defendant has undertaken or failed to undertake may directly result in the violation of the right to equal treatment,
• ban activities that violate or may violate the plaintiff’s right to equal treatment or to carry out activities that eliminate discrimination or its consequences,
• receive compensation for monetary and nonmonetary damage caused by the violation of the rights protected by the Antidiscrimination Act and
• publish in the media at the defendant’s cost the ruling establishing the violation of the right to equal treatment.

EU Pay Transparency Directive: As a member state of the European Union, Croatia has until June 2026 to transpose the minimum requirements of the EU Pay Transparency Directive into its national law or amend any current pay equity laws to conform with the directive, which aims to promote pay equity between men and women. The directive introduces requirements on gender pay gap reporting, salary history bans during the hiring process, and wage disclosure in job vacancy listings. The national law may go beyond the minimum requirements of the directive, but the law may not directly conflict with the directive requirements.

Reference Citations

Nondiscrimination: Antidiscrimination Act, 2008, art. 1; Labor Law, 2014, art. 134 (Croatian)

Employee Privacy

Employee Data

On May 25, 2018, the General Data Protection Regulation (GDPR) superseded the Data Protection Directive as the primary law governing data privacy in the EU. The GDPR establishes minimum requirements for the processing of employee data and allows EU member nations to introduce more restrictive local legislation. Stricter requirements can also be established in collective bargaining agreements or work contracts. For more information, see the In Focus: International Privacy Laws.

The Act on Implementation of the General Data Protection Regulation, which took effect on May 25, 2018, includes provisions on processing special categories of data, including biometric data, which may be processed in order to record working hours and control access to premises where the employees have provided their consent.

Employee Monitoring and Surveillance

The Human Rights Act affords private employees a legal remedy to challenge abusive monitoring practices, and the Regulation of Investigative Powers Act makes it a criminal offense to intercept data without authorization, though employers are permitted to intercept emails and to monitor internet access as long as both the sender and the receiver agree to it.

Under the GDPR, employers can monitor employees only if there is a lawful basis for doing so. Lawful bases can include preventing employee misconduct, deterring crime, and ensuring compliance with health and safety procedures. Employees must be given prior notice, and any data that is collected must be used and kept only to fulfill its original purpose.

Reference Citations

Employee Data: General Data Protection Regulation, 2016; Act on Implementation of the General Data Protection Regulation, 2018

Employee Monitoring and Surveillance: General Data Protection Regulation, 2016

Compensation

Hours of Work

The number of weekly working hours is limited by statute to 40.

The only exception is when an employee who works full time enters into an employment agreement with another employer for additional work up to eight hours a week (180 hours a year), in which case both employers need to provide their written consent.

Every employee who works at least six hours a day (or in the case of minor employees 4.5 hours a day) is entitled to a rest break of at least 30 minutes, which is to be counted as working time.

If the nature of employment prevents the interruption of work, the time and procedure for using a rest break is regulated by the employment contract, agreement entered into between an employer and a works council or a collective bargaining agreement.

Employees are also entitled to minimum daily rest periods of 12 consecutive hours and weekly rest periods of 24 uninterrupted hours. For minor employees, weekly rest amounts to 48 hours. Employees normally use their weekly rest on Sunday and on Saturday or Monday. If this is impossible due to the organization’s work schedule, employers need to ensure the use of alternative weekly rest.

Minimum Wage

Effective Jan. 1, 2024, Croatia’s minimum wage is 840 euros per month. (Note: Croatia is adopting the euro as its official currency effective Jan. 1, 2023.) Effective Jan. 1, 2023, Croatia’s minimum wage was 700 euros per month.

In Croatia, minimum wage is defined by the following regulations:

• the Minimum Wage Act requires that the minimum wage be set annually and establishes the procedure for calculating it;
• the Minimum Wage Collective Bargaining Agreement sets the lowest allowable rate of minimum wage;
• the Minimum Wage Regulation annually prescribes the exact amount of the minimum wage; and
• collective bargaining agreements set the minimum wage for particular employers, which must be at least equal to that set by the government.

Overtime

Employers can require employees to perform overtime work only in situations of absolute necessity.

In such cases, employers must provide employees with a prior written request unless objective circumstances prevent the employer from doing so, in which case the employer must confirm the verbal request in writing within seven days after the overtime work has been ordered.

Overtime work cannot exceed 50 hours a week or 180 hours a year, unless stipulated in a collective bargaining agreement (in which case the maximum duration of overtime work is 250 hours a year).

Minors are not allowed to work overtime, while other categories of employee such as pregnant women, parents with a child younger than 3 years old, single parents with a child younger than 6 years old and employees working part time with several employers must give their written consent to the employer except in extraordinary circumstances.

Employees are entitled to an increased wage in cases of overtime work, although the law does not prescribe the exact amount.

Wage Payment

Wages must be paid by the 15th of the month following the month in which the work was performed.

Employers are not allowed to unilaterally make deductions from wages, meaning that every deduction is subject to the employee’s approval.

Men and women are entitled to the same wage for the same work.

Mandatory Bonuses

While there is no legal obligation for an employer to pay bonuses, it is quite common for Croatian businesses to agree to various bonus payments under an employment contract or a collective bargaining agreement. It is also common to pay certain bonuses even if these have not been formally agreed to.

The most common bonuses or gratuities are:

• Christmas bonus,
• Easter bonus,
• gifts for children,
• annual vacation bonus,
• seniority bonus and
• retirement bonus (mostly in state services).

Reference Citations

Hours of Work: Labor Law, 2014, arts. 61, 73-75 (Croatian)

Minimum Wage: Law on the Minimum Wage, 2013 (Croatian)

Overtime: Labor Law, 2014, art. 65 (Croatian)

Wage Payment: Labor Law, 2014, arts. 92-93 (Croatian)

Benefits

Vacation

Under the Labor Act, employees are entitled to at least four weeks of vacation leave per year. Minors and employees who work in jobs that pose safety risks have larger entitlements. Employers and employees can agree to longer vacations through employment agreements, collective bargaining agreements or agreements entered into between an employer and a works council.

During vacation, employees are entitled to remuneration in the minimum amount of their average monthly wage during the previous three months. Employees are eligible for their full vacation entitlements if they have been employed for at least six months and cannot waive their vacation rights or agree to compensation in exchange for time off.

The unused portion of annual vacation can be carried over to the following year but must be used at the latest by June 30 (some exceptions are allowed in instances such as sickness and maternity leave). Upon termination of employment, an employee is entitled to compensation for unused vacation days.

Employers must prepare a schedule for taking annual leave no later than June 30th of the current year, and inform the employees about the schedule. An employee must be informed about the duration and schedule of annual leave at least 15 days before annual leave is to be taken. Employees are allowed to take one vacation day any time they want, provided they inform the employer at least three days in advance and the employer has no credible reason for refusing the request.

Holidays

There are 15 national holidays in Croatia:

• Jan. 1: New Year’s Day
• Jan. 6: Epiphany
• Easter
• Easter Monday
• May 1: International Workers’ Day
• Corpus Christi
• June 22: Fascist Resistance Day
• June 25: National Day
• Aug. 5: Homeland Thanksgiving Day
• Aug. 15: Assumption
• Oct. 8: Independence Day
• Nov. 1: All Saints’ Day
• Nov. 18: Remembrance Day
• Dec. 25: Christmas
• Dec. 26: St. Stephen’s Day

Croatia also observes several unofficial holidays and observances including the Carnival celebrations held on Shrove Tuesday, the day before the beginning of Lent. Employees who are required to work on a national holiday are entitled to extra pay, which is typically negotiated in the bargaining agreement.

Maternity Leave

Employed pregnant women are entitled to maternity leave beginning 28 days prior to the date of birth. In case of complications resulting from pregnancy, leave can be taken 45 days before the birth.

After a child is born, mothers are entitled to postnatal leave until the child reaches 6 months of age. This period is divided into mandatory and additional postnatal leave. Mandatory leave lasts for 70 days after childbirth and has to be used by the mother. Additional maternity leave begins on the 71st day after childbirth and lasts up to six months. The father of the child has the right to use the remaining period of maternity leave, if the mother agrees.

The maternity entitlement amounts to 100 percent of the average monthly earnings of the insured person in the last six months prior to the month in which the maternity leave began and is paid by the Croatian Institute for Health Insurance; the employer bears no cost.

Paternity Leave

Effective Aug. 1, 2022, working fathers are entitled to ten day’s (or 15 days for multiple births) paid leave within six months of the birth of their child.

Sick Leave

Employees are entitled to paid sick leave for a single illness of a maximum three years. After six months’ sick leave, the employee is subject to sick leave review by the Institute for Health Insurance.

During the first 42 days of sick leave, the employer is obligated to pay remuneration equal to 70 percent of the employee’s average wage in the preceding six months. After the 42nd day of sick leave, compensation is reimbursed by the Institute for Health Insurance.

Other Leave

Parental leave. Parental leave begins after completion of maternity leave and lasts four months (for the first and second child) or 15 months (for twins, the third and every subsequent child) for each parent, provided that both parents use the right to parental leave.

Parental leave can be taken:

• in one period,
• in two periods a year of no less than 30 days each or
• part-time.

Parental leave is available until the child turns 8 years of age. During leave, a parent is entitled to remuneration equal to 80 percent of the budget base for the first six months and 50 percent after that. Remuneration is paid from the Croatian state budget.

Personal leave. Employees are entitled to paid leave for such major life events as a wedding, birth of a child, severe disease or death of a family member. Annual leave of up to seven working days is allowed, provided different rules have not been established in a collective bargaining agreement, employment by-law or employment agreement.

Employees may also receive paid leave for:

• education and professional training,
• voluntary blood donations (one day) and
• adoption of a child younger than 18 years of age (six months).

The duration of adoption leave can be extended by an additional 60 days in certain cases, such as the adoption of two or more children at the same time or the adoption of a child with disabilities. Following adoption leave, an adoptive parent is entitled to parental leave and all other rights granted to birth parents, including the same monetary benefits as a birth parent during maternity leave. Paid annual leave days are considered days spent at work for the purpose of tallying employment duration.

Pensions and Social Security

The minimum retirement age in Croatia is 65 with 15 years of contributions into the social security system.

Social security benefits in Croatia include pension insurance, health insurance, unemployment insurance and work injuries and professional disease insurance.

The pension system is composed of three parts: the generational solidarity system, compulsory individual pension insurance and voluntary pension insurance. Insured employees must generally contribute 15 percent of wages to the generational solidarity system and 5 percent to the compulsory individual pension insurance system.

The Croatian Institute for Pension Insurance (HZMO) is responsible for organizing and implementing the pension insurance system.

Workers’ Compensation

Employees are entitled to compensation for workplace injuries that occur during or in connection with the performance of work under their employment agreements, including diseases that can be attributed to work. Workers’ compensation also covers injuries occurring while employees are commuting between home and work.

Employers pay 0.5 percent of covered payroll to fund workers’ compensation benefits.

Reference Citations

Vacation: Labor Law, 2014, arts. 76-85 (Croatian)

Holidays: Holidays, Memorial Days and Non-Working Days Act, 1996, arts. 1-5 (Croatian)

Maternity Leave: Law on Maternity and Parental Benefits, 2008, arts. 12-14 (Croatian)

Paternity Leave: Law on Maternity and Parental Benefits, 2008, arts. 12-14 (Croatian)

Sick Leave: Law on Compulsory Health Insurance, 2013, arts. 8, 41, 58 (Croatian)

Other Leave: Labor Law, 2014, art. 86 (Croatian); Law on Maternity and Parental Benefits, 2008, arts. 13, 39(Croatian)

Workers’ Compensation: Law on Compulsory Health Insurance, 2013, art. 130 (Croatian)

Labor Relations

In General

Employees have the right to freely establish and join a trade union to represent them in employment disputes against an employer and to be a party to a collective bargaining agreement. When adopting certain decisions, an employer has the obligation to either notify, consult, or obtain prior approval from the works council. Trade unions have the right to initiate and conduct strikes to protect and promote the economic and social interests of their members. Employers may engage in a lockout only as a response to an already existing strike. If a business unit is transferred to another organization, the employment and collective bargaining agreements that govern the work of the employees must be transferred as well, and the new employer must assume all rights and obligations arising from them.

Right to Organize

In Croatia, employees have the right to freely establish a trade union and to join it under the conditions prescribed by the union bylaws. A trade union is authorized to represent its members in employment disputes against an employer and to be a party to a collective bargaining agreement provided it is organized and registered in accordance with the law.

A trade union can be established by a minimum of 10 adults and gains full legal status once registered in the appropriate registry. Trade unions may independently decide on the form of their representation within an employer. As a general rule, they elect one or several members as trade union representatives.

An employer cannot discriminate against employees based on their membership in a trade union. Trade unions may associate with other unions to form higher level unions, as well as associate with international organizations established for the purpose of promoting the same rights and interests.

Trade unions and their representatives have various statutory rights, including the right to:

• comment on and challenge an employment bylaw before the court (in the absence of a works council);
• initiate works council election proceedings, propose a list of candidates and, in case of illegality or irregularity of the elections, demand that elections be annulled;
• comment on an extension of the scope of a collective bargaining agreement by decree of the Labor Minister;
• challenge a lock-out before the courts and claim damages;
• initiate employment inspections and
• initiate a strike.

Collective bargaining agreements are normally negotiated between trade unions and an employer or an employers’ organization. Apart from agreements with trade unions, an employer may also enter into agreements with the works council.

Collective bargaining agreements are binding on all persons who, at the time a collective bargaining agreement was entered into, were or later became members of the organization that concluded the agreement. Collective bargaining agreements can be entered into for a definite or an indefinite period of time. A collective bargaining agreement entered into for a definite period of time cannot be established for a period longer than five years.

Works Councils

The process of establishing a works council can be initiated by a trade union or at least 20 percent of employees within a certain employer. The right to elect and to be elected accrues to all employees of the same employer. Works council members are elected for four-year terms.

The size of the works council depends on the regular number of employees in the business unit. It is always an odd number.

In companies which, in accordance with special regulations, need to establish a corporate body to monitor the business management (i.e. a supervisory board), one member of the corporate body has to be an employees’ representative. The employees’ representative is appointed by the works council. An employees’ representative has the same rights and obligations as the other members of the supervisory board.

When adopting certain decisions, an employer has the obligation to either notify, consult or obtain prior approval from the works council.

An employer must inform a works council every three months concerning:

• its state of affairs, business results and work organization;
• expected development of business activities and the likely impact of them on the economic and social status of employees;
• fluctuation and changes in wages;
• volume and reasons for the introduction of overtime work;
• protection and safety at work and measures for the improvement of working conditions;
• other issues of particular importance for the economic and social status of employees;
• number and type of employees working for the employer, the employment structure and the development and employment policy; and
• number and type of employees given a written approval for additional work.

An employer must consult a works council concerning:

• adoption of employment bylaws;
• employment policy plan and development and termination of employment;
• transfer of a business or economic activity (or parts thereof) or of employment agreements to a new employer and the expected consequences;
• measures in connection with the protection of health and safety at work;
• introduction of new technologies and changes in the organization and modes of work;
• annual vacation plan;
• working hours schedule, including night-shift work;
• social plans in the event of collective dismissals and
• compensation for inventions in connection with work.

An employer may not finalize a decision without obtaining the prior consent of the works council regarding:

• terminating the employment of a member of (or a candidate for) the works council;
• terminating the employment of an employee with diminished ability to work or of an employee with disabilities;
• terminating the employment of an employee older than 60;
• terminating the employment of an employees’ representative on the supervisory board;
• selection of employees to be included in a social plan;
• collecting, processing, using and forwarding personal information about employees to third parties and
• appointing a person authorized to supervise the administration of the personal information of employees.

The failure of an employer to inform, consult or obtain a prior approval from the works council as required under the law is considered a misdemeanor.

Each works council member is entitled to receive six hours’ paid leave per week for works council activities. This entitlement to paid leave can be transferred to other council members, so that in larger undertakings single works council members may be entitled to be completely released from work.

Dispute Resolution

Employment disputes are primarily tried by the ordinary courts. Up to now, there have not been any special labor courts (except in Zagreb). Some matters may be referred to special authorities such as an administrative court. Arbitration is another possible way of resolving an employment dispute.

Disputes related to signing, amendment or renewal of collective bargaining agreements and other disputes that could result in a strike have to be resolved before a conciliation committee unless the parties agree to an alternative method of peaceful dispute resolution.

The conciliation procedure is conducted by a person chosen by the parties from the list established by the Economic and Social Council or a person agreed upon by both parties. The Economic and Social Council has been established pursuant to an agreement between the government, trade unions and employers’ associations. Among other duties, this body prepares a list of conciliators and arbitrators.

Strikes and Lockouts

Trade unions have the right to initiate and conduct strikes to protect and promote the economic and social interests of their members. A strike must be announced to the employer or employers’ association against which it is directed, and a solidarity strike has to be announced to the employer whose employees are organizing the strike.

A strike cannot begin prior to the completion of a mediation procedure if such a procedure is prescribed by law or prior to the completion of other alternative dispute resolution procedures agreed upon by the parties. The letter announcing the strike must state the reasons for the strike; the place, date and time of the strike; and the manner of its implementation.

Employers may engage in a lockout only as a response to an already existing strike. A lockout may not begin sooner than eight days after the beginning of a strike. The number of employees locked out from work must not be greater than half of the employees on strike.

Successorship Clauses

Under the Labor Law, if a business unit (or a part thereof) is being transferred to another organization, the employment agreements that govern the work of the employees are transferred as well. An employer to which employment agreements are transferred shall assume, as of the day of such transfer, all the rights and obligations arising under the transferring agreement.

If a collective bargaining agreement has been concluded, it will also be transferred and remains valid until the execution of a new one, but no longer than one year after the transfer. The former employer must inform the employees of the transfer of their agreements to the new employer in writing. The employer is also obliged to consult with the works council on the expected legal, economic and social consequences that may arise for the employees as a consequence of their employment agreements being transferred to a new employer.

If a business is transferred to a new employer for a limited time, both the former and the new employer become jointly liable for the employment obligations towards the employees.

Reference Citations

Right to Organize: Labor Law, 2014, arts. 165, 171, 186, 205 (Croatian)

Works Councils: Labor Law, 2014, arts. 27, 50, 141-142 (Croatian)

Dispute Resolution: Labor Law, 2014, art. 206 (Croatian)

Strikes and Lockouts: Labor Law, 2014, arts. 205-206 (Croatian)

Successorship Clauses: Labor Law, 2014, art. 137 (Croatian)

Safety, Health and Security

In General

Employers are responsible for ensuring that the machinery, equipment, tools, place of work, access to the place of work, and the work itself are safe for employees and for training employees on how to conduct their work properly and safely.

Employers must use appropriate measures to ban alcohol and drugs at work, including implementing substance abuse prevention programs, and may perform drug and alcohol tests on employees.

Workplace Safety and Health

Employers are responsible for ensuring that the machinery, equipment, tools, place of work, access to the place of work and work itself are safe for employees. Employers are also obligated to train employees on how to conduct their work properly and safely. Costs of workplace safety and health implementation are paid by the employer.

Employers who employ under 50 employees can perform workplace safety and health activities themselves, provided they fulfill certain legally prescribed conditions (or they can entrust the activities to a workplace safety and health specialist). Employers with more than 50 and less than 250 employees are obligated to entrust performance of safety activities to a workplace safety and health specialist, while employers with 250 or more employees must employ one or more workplace safety and health specialists.

Employers with 50 or more employees must establish a workplace safety and health committee. Employees are entitled to appoint a workplace safety and health commissioner.

Drug and Alcohol Use

Employees are not permitted to bring drugs or alcohol to work or to be under the influence of these substances while at work. Employers must use appropriate measures to ban alcohol and drugs at work, including implementing substance abuse prevention programs.

Employers are allowed to perform drug and alcohol testing on employees. If workers refuse to be tested, they will be deemed to be under the influence of these substances. Employers are obligated to remove such employees from the place of work.

Smoking is prohibited in all workplaces.

Reference Citations

Workplace Safety and Health: Act on Health and Safety in the Workplace, 2014, art. 20 (Croatian); Labor Law, 2014, arts. 8, 17 (Croatian)

Drug and Alcohol Use: Act on Health and Safety in the Workplace, 2014, arts. 15, 24 (Croatian)

Termination

Termination by Employer

Under the Employment Act, valid cause for dismissal includes cases where employees engage in misconduct or are unable to perform their jobs (e.g., for health-related reasons). Employers can also terminate employees for economic reasons, although before doing so employers with 20 or fewer employees must consider the individual’s employment history, support obligations and age. If within a period of six months following the employee’s dismissal for redundancy the employer wants to hire a new employee for the same job, it must first offer to rehire the terminated employee.

Notice periods must be proportional to the duration of employment and amount to at least two weeks for less than one year of employment. After the first year, an employer has to observe a notice period of one month. After two, five, 10 or 20 years of employment, the statutory notice period increases to one month and two weeks, two months, two months and two weeks and three months, respectively. After 20 years of employment, the notice period increases by two weeks for employees aged at least 50 years and by one month for employees aged at least 55.

In case of dismissal for misconduct, notice periods are shortened by half. During the notice period, employees are entitled to receive their wages and all other entitlements under the law. Garden leave—the employee paid but required not to work—during the notice period is allowed.

Termination without notice (extraordinary dismissal) is only lawful if there is a serious breach of the employee’s duties or another important reason that renders the continuance of employment impossible. In case of an extraordinary dismissal, employers are not required to provide notice or issue severance payments.

Employers are not permitted to terminate the employment agreements of the following persons:

• pregnant women during their pregnancy,
• parents exercising their right to maternity or paternity leave,
• parents and adoptive parents when exercising their right to work part-time and adoptive parents during adoption leave,
• parents/adoptive parents during leave for the purpose of nursing a child with severe disabilities and
• employees who have suffered an injury at work or contracted an occupational disease and are temporarily unfit to work due to treatment or recovery.

The employment of the following persons may be terminated only with the prior consent of the works council or trade union:

• members of the works council,
• candidates for the works council and members of the election committee for three months after the results of the elections have been established,
• employees with diminished working capacity and employees with disabilities,
• employees over 60 years of age and
• employee representatives on the supervisory board of an employer.

If the works council or trade union does not express disapproval of the dismissal within eight days, the termination shall be deemed approved. If the approval is explicitly denied, an employer may seek an arbitration award.

Termination by Employee

Employees are entitled to terminate an employment agreement without stating the reason, although legally prescribed or agreed notice periods must be respected.

Employees are also entitled to terminate an employment agreement if there is a serious breach of the employer’s duties or another important reason that renders the continuation of employment no longer possible. In such cases, no notice needs to be given.

Plant Closings and Mass Layoffs

Employers that plan to lay off at least 20 employees, at least five due to redundancy, within a 90-day period must consult the works council to seek an agreement to save the employees’ jobs or limit the number of layoffs. The employer must provide the works council with written information concerning the reasons for the dismissals; the total number, professions and positions of employees targeted for termination; selection criteria of these employees; amounts and way of calculating severance payments and measures undertaken to prevent the terminations.

In addition, the employer must inform the Croatian Employment Agency of the layoff and provide it with the same information given the works council, as well as information on the duration and results of negotiations with the works council. The works council is entitled to send its objections and suggestions to the agency as well. If there is no works council, an employer must consult the trade union commissioner.

Payment on Termination

Employees with at least two years’ employment with the same employer dismissed for economic reasons or for inability to perform the job must receive a severance payment.

The minimum amount of severance is calculated by multiplying one-third of the average monthly wage paid in the last three months by the number of years of continuous employment with the same employer. Severance is capped at six times the average monthly wage unless otherwise stipulated by law, employment bylaw, collective bargaining agreement, or employment agreement.

Employers and employees are allowed to agree on notice periods and severance payments more favorable for an employee than provisions prescribed by the law.

Unemployment Insurance

An unemployed person who worked for at least nine of the 24 months prior to loss of employment has the right to unemployment compensation from the state.

Reference Citations

Termination by Employer: Labor Law, 2014, arts. 34-36, 121-122 (Croatian)

Termination by Employee: Labor Law, 2014, art. 116 (Croatian)

Plant Closings and Mass Layoffs: Labor Law, 2014, arts. 127-128 (Croatian)

Payment on Termination: Labor Law, 2014, art. 126 (Croatian)

Personal Taxes

Residency Requirements

Individuals are considered Croatian tax residents if they reside in Croatia, permanently or temporarily, for more than 183 days in one or two consecutive calendar years.

Taxable Income

Croatian residents pay personal income tax on their worldwide income. Nonresidents pay tax only on income derived from sources within Croatia. Employment income includes wages, pensions, grants, bonuses, and life insurance, retirement insurance, and property insurance premiums paid by employers but does not include compulsory employee social security contributions.

Tax Rates

The tax year is the calendar year, and every taxpayer must file a return by the end of the following February.

The top personal income tax rate is 30 percent. A reduced rate of 20 percent applies to annual income up to 360,000 kuna.

Croatia grants credits for foreign taxes paid on foreign source income.

Reference Citations

Residency Requirements: Law on Income Tax, 2013, arts. 6, 37, 62 (Croatian)

Taxable Income: Law on Income Tax, 2013, arts. 6, 37, 62 (Croatian)

Web References

In Croatian unless otherwise noted.

Law and Regulation

Croatian laws

Labor Act

Government Websites

Croatian Unemployment Agency (English)

Institute for Health Insurance

Institute for Pension Insurance (English)

Ministry of Labor and Pension System