Employment laws in Serbia

Owing to its strategic location between Central and Southern Europe and its skilled workforce, Serbia is slowly becoming a valuable hub for conducting business. The country’s steadily developing regulatory framework is an added advantage, helping businesses maintain compliance and fairness. 

For companies to hire in Serbia, employers should have a clear understanding of the local employment laws and regulations. Being aware of these regulations helps them stay compliant while fostering reliable, long-term relationships with employees as well as independent contractors.

In this guide, we will discuss the key employment laws in Serbia that you, as an employer, should know to hire in Serbia with confidence and maintain labor law compliance in Serbia.

Key employment laws in Serbia

Serbia’s employment landscape is marked by a structured set of labor laws in Serbia. These laws define the rights and responsibilities of employees and help employers ensure fairness in the workplace. 

The important laws that make up the employment landscape in Serbia are listed below: 

1. The Labor Law (Zakon o radu): It governs laws that ensure the protection of the rights of employees, ensuring fairness, and promoting social justice in the workplace. 
2. Law on Safety and Health at Work (Zakon o bezbednosti i zdravlju na radu): This law aims at improving and implementing the health and safety measures at work and preventing hazards like injuries or work-related diseases. 
3. Law on Employment of Foreigners (Zakon o zapošljavanju stranaca): This law regulates the conditions for the employment of non-Serbian nationals in Serbia. 
4. Law on Prevention of Harassment at Work: This law aims at taking preventive measures against harassment at the workplace and improving relations. 
5. Law on Gender Equality: This law aims at the protection of employment rights in Serbia and ensures that there is no discrimination at the workplace based on sex. 

Contract employment laws in Serbia

Employers can enter into different types of employment contracts with their employees based on the kind of goal they wish to accomplish. 

The different types of employment contracts in Serbia, based on the duration and nature of engagement, are listed below:

• Indefinite-term contracts: This is the most common form of employment in Serbia. In this kind of arrangement, employment relationships are established not for a limited duration, but for an unlimited period. This type of contract provides long-term job security for employees.
• Fixed-term contracts: Employers and employees may agree upon a fixed-term employment contract that is concluded for a limited duration. These are used in exceptional circumstances, for instance, in the case of project-based roles or when the workload increases. The duration is usually capped at 24 months and may be extended by law in certain cases.

Essential contract terms

The employment laws in Serbia mandate that employers should provide a written employment contract to employees, in Serbian and English. 

The employment contract should contain the following points:

• The name and the registered seat of the employer. 
• The employee’s name and place of residence. 
• The qualification that is necessary for carrying out the task. 
• The employee’s post and job description. 
• The place of work. 
• The type of employment agreement. 
• The duration of the employment contract. 
• The date of the commencement of work. 
• The employee’s work hours. 
• The basic pay that the employee shall be entitled to on the date of the conclusion of the contract. 
• Deadlines for payment of salaries and other payments. 

Minimum wage in Serbia

Employers should pay a minimum of RSD 371 per hour to employees to ensure that they are compensated fairly and can maintain a reasonable standard of living.

Working hours in Serbia

The maximum working hours for employees in Serbia are 40 hours. If an employee has to work more than that, they may be additionally compensated by the employer. 

Although the maximum working hours per week are fixed, employers may require employees to work overtime if needed. Nevertheless, the duration of overtime in Serbia cannot exceed 4 hours per day or 8 hours per week. 

Moreover, an employee shall not be required to work more than 12 hours a day, including overtime.

Mandatory benefits

Employees in Serbia enjoy certain additional benefits that form an essential part of their rights. It is important that employers clearly define these entitlements to the employees. 

Some of the statutory benefits that Serbian employees enjoy are listed below: 

• Annual leave in Serbia: Employees in Serbia are entitled to receive 20 annual leaves every year. This can be increased by 5 days, depending on the employer. 
• Public holidays: There are 7 public holidays in Serbia. Alongside that, there are many religious holidays on which employees shall get leave depending on their faith. 

• Sick leave in Serbia: In Serbia, employees are entitled to sick leave for which they shall receive compensation. For the first 30 days, the employer makes the payment, and from the 31st day, the payment is made by the state health fund (RFZO).
• Maternity leave in Serbia: Serbian employees shall get leave for pregnancy and childbirth, the total duration of which is 12 months. The leave may commence 45 days before the delivery. However, employees must take the leave at least 28 days before the date of the child’s birth.
• Paternity leave in Serbia: In Serbia, employees get paternity leave for 5 working days when a child is born.
• Social security contributions: Employees have to make contributions for social security for health insurance, pension, disability insurance, and unemployment insurance. A percentage of the employee’s salary is deducted for these purposes. The contribution rate for health insurance is 10% (employer’s contribution- 6% and employee’s contribution- 4%)

Termination

Employers, before hiring employees, should be well aware of the termination laws. 

The termination rules determine how and when an employment relationship can be ended and what obligations both parties have to meet during the process. 

Before we delve deeper, let us have a look at some valid cases in which an employment contract may be dissolved.  

Valid termination scenarios

According to the termination laws in Serbia, the following cases may lead to the termination of an employment relationship:

• The period of employment expires
• Both the employer and the employee mutually agree to end the employment
• Either the employer or the employee decides to cancel the employment contract
• The employee expires

Cancellation of employment by the employee 

An employee may terminate the employment contract at their own discretion. However, they have to provide a written notice to the employer at least 15 days before the day they wish to stop working. This way, the employer gets adequate time to manage the transition. The notice period may be extended up to 30 days. 

Cancellation of employment by the employer

An employer may cancel an employment contract on justified grounds based on the employee’s conduct, performance, and the business’s operational needs. Before proceeding with the dismissal, the employer has to follow a complete procedure, such as issuing a written warning, providing evidence, and allowing the employee a chance to respond within eight days. 

Probation period rules

The probation period in Serbia can last from 15 days to 90 days. 

• Notice period during probation: If an employment contract is terminated while the employee is still in probation, then there is no need for a notice period. 
• Notice period after probation: If an employment agreement is to be terminated after the employee has completed the probation period, the notice period in Serbia may range between 15 and 30 days, depending on the employee’s seniority. 

An employee can leave the job before the notice period ends, but they must be paid a salary for that remaining time as specified in the company’s rules or their employment contract.

Severance pay

Employers should pay employees severance pay after termination, which acts as a financial support during the employee’s transition period. The severance pay in Serbia should not be lower than one-third of the employee’s salary for each year they have worked. In this case, salary refers to the average monthly salary of the employee for the last three months before the month in which the severance pay is given. 

Navigate employment laws in Serbia with Payoneer Workforce Management

It may seem challenging to stay compliant with the employment laws in Serbia. The key areas, such as employment contracts, leave laws, termination, and payroll, require a deep understanding and careful handling. 

A workforce management platform like Payoneer Workforce Management helps bring these processes together, thereby maintaining compliance. 

Payoneer Workforce Management supports everything from onboarding and payroll to everyday HR admin, thereby helping you to streamline local requirements.

Book a demo today!

FAQs

1. What are the different types of employment contracts in Serbia?

 According to the labor laws in Serbia, employment contracts may be for indefinite periods or fixed terms. For indefinite-term contracts, employment contracts are made for an indefinite duration. For fixed-term contracts, employment contracts are built for a limited duration, say till a task is accomplished. 

The maximum duration for this is 24 months, and may be extended.  

2. What is the minimum wage in Serbia?

The law about minimum wage in Serbia mandates that employers should pay employees at least RSD 371 per hour. This will make sure that they are fairly paid and can maintain a decent standard of living. 

3. What are the rules for overtime in Serbia?

According to the overtime laws in Serbia, the maximum working hours in Serbia are 40 hours. If needed, employers may get employees to work overtime, but it should not exceed 12 hours a day or 8 hours a week. 

4. What are the social security contribution requirements in Serbia?

The employment laws in Serbia list everything, including the payments of employees. When an employee is being paid, both employers and employees collectively contribute to a social security system for health, pension, disability, and unemployment. The contributions are split between the parties.