COUNTRY

Written Agreements

The labor code of Croatia mandates that employment contracts be concluded in writing. However, the failure to conclude an employment contract in writing does not impact the existence or validity of the employment contract. If the employer does not put an employment contract in writing, it is considered to be a contract for an indefinite period.

Employers who conclude contracts with seasonal employees, employees sent abroad for work, or employees working from home must include additional mandatory terms in writing.

Employers can include a non-compete clause in employment contracts, which must be agreed upon in writing, either within the employment contract or in a separate document. These restrictions cannot exceed 2 years. The clause is not binding if the employer does not agree to pay the employee at least 50% of their average monthly salary from the last 3 months of employment, for the duration of the restriction. If the employee violates the non-compete clause, the employer can seek compensation for any damages incurred.

Oral Agreements

According to the labor laws of Croatia, the failure of contracting parties to conclude an employment contract in written form does not affect the existence and validity of that contract.

If the employer fails to prepare contract in a written form or does not issue a written confirmation of the conclusion of the contract before the beginning of the employment, it will be considered the employment agreement for an indefinite period.

Implied Agreements

The failure of the contracting parties to conclude an employment contract in writing does not affect the existence and validity of that contract. If the employment contract has not been completed in writing, the employer is obliged to issue a written confirmation of the concluded employment contract to the employee before the commencement of work.

If an employer does not conclude a written employment agreement with the employee before the start of work or does not issue a written confirmation of the concluded employment contract, it will be considered an employment contract for an indefinite period.

The best practice in the industry is to be cautious of implied contracts and utilize written agreements whenever possible.

Per the labor law of Croatia, the standard workweek is 40 hours, unless otherwise stated in a collective bargaining agreement. Employees who work over this number of hours are eligible for overtime. Overtime must not exceed 180 hours a year unless contractually agreed, in which case it must not exceed 250 hours. An employee may not work for more than one employer with a total working time of more than 40 hours per week except when the employee is working abroad.

Part-time work is any working time below the standard 40 hours per week. An employee whose total working time is 40 hours per week, may enter into an employment contract with another employer for a maximum of 8 hours per week, or up to 180 hours per year. The existing employer with whom the employee has already concluded a contract must give written consent for such work.

The following are observed as public holidays and non-working days in the Republic of Croatia:

• New Year's Day - January 1
• Epiphany or Holy Three Kings - January 6
• Easter and Easter Monday - date subject to change annually
• Tijelovo - date subject to change annually
• Labor Day - May 1
• Statehood Day - May 30
• Anti-Fascist Struggle Day - June 22
• Victory and Homeland Thanksgiving Day and Croatian Veterans Day - August 5
• Assumption - August 15
• All Saints Day - November 1
• Day of Remembrance for the Victims of the Homeland War and Day of Remembrance for the Victims of Vukovar and Škabrnja - November 18
• Christmas - December 25
• The first day after Christmas, St. Stephen's Day - December 26

The labor code of Croatia provides paid annual leave of at least 4 weeks to all employees. The employee is entitled to annual leave after he or she has worked for at least 6 months with the employer. The law does not allow compensation in lieu of annual leave.

The labor code of Croatia provides employees with a right to 7 working days of employee-paid leave in case of serious illness. Additionally, employees are entitled to wage replacement benefits through the Medical Committee of the Croatian Health Insurance Fund (Hrvatskog Zavoda za Zdravstveno Osiguranjeor HZZO) for the first 42 days of sickness, typically paid by the employer. From the 43rd day onward, the employer continues to pay out the benefits but is reimbursed by the HZZO.

In Croatia, an employed mother is entitled to maternity leave during pregnancy, childbirth, and care of a newborn child until the child reaches the age of 6 months. The employee is entitled to 100% of their salary compensation for the duration of maternity leave, which is paid from the funds of the Croatian Health Institute.

Croatian law dictates that the mother must use maternity leave 28 days before the expected date of delivery and use it continuously until 70 days after birth (compulsory maternity leave). An employed mother may start taking maternity leave 45 days before the day of the expected birth.

Per the labor laws of Croatia, after the expiration of the compulsory maternity leave period, the remaining maternity leave, which lasts until the child reaches the age of 6 months, may be transferred to the child's father.

An employed father is also entitled to parental leave separate from maternal leave. An employed father can use paternity leave in the period from the day of the child's birth up to the sixth month of the child's life. Fathers may take 10 working days for one child and 15 working days in the case of multiple babies (i.e. twins, triplets, etc.) An employee is entitled to parental leave for eight months for the first and second-born child, and 30 months for twins, the third, and each subsequent child. If both parents use parental leave, each can take leave for four or 15 months, depending on the number of children.

Salary compensation during parental leave for the first 6 months of maternity leave or 8 months of parental leave is paid in the full amount of the salary compensation base (100% of the salary compensation base), but cannot, for full-time work, amount to more than 225.5% of the budget base per month EUR 995.45 (Euro).

Minimum Wage

From January 1, 2024, to December 31, 2024, the minimum wage in Croatia is set at EUR 840 (euros) per month, and is increased to EUR 970 from January 2025.

Salary must be paid monthly or as per the terms set in an individual or collective agreement, and no later than the 15th day of the current month for the previous month.

Overtime, Holiday & Vacation Pay

The labor law of Croatia limits overtime for cases of emergency or any extraordinary reasons for work increase. The total duration of overtime must not exceed 10 hours in a week and 180 hours in a year (250 hours in a year if it has been provided by the collective agreement).

For difficult working conditions, overtime, and night work, and for work on Sundays, holidays, and non-working days determined by a special law, the employee has the right to an increased salary. The amount is determined by the collective agreement, labor regulations, or labor contract. Work performed on Sunday must be paid at a minimum of 50% wages for each hour of work.

Notice Period

The Croatian Labor Code provides that, in the case of dismissal, the employer must give prior notice to the employee in writing.

The duration of the notice period depends on how long the employee has been working for the same employer:

• 2 weeks' notice: employed for less than 1 year
• 1 month: employed for 1 year
• 1.5 half months: employed for 2 years
• 2 months: employed for 5 years
• 2.5 months: employed for 10 years
• 3 months: employed for 20 years

An employee whose employment contract is terminated due to employee misconduct is entitled to a notice period in the amount of half of the notice periods listed above.

Severance Benefits

An employee who is dismissed by the employer after 2 years of uninterrupted work (unless dismissed due to misconduct) is entitled to severance pay in the amount determined by the length of their previous continuous service with that employer.

The severance pay may not be less than one-third of the average monthly salary earned by the employee in the 3 months before the termination of the employment contract, multiplied by each completed year of service with the same employer.

Pension

Under the Pillar I of Croatia's pension scheme (there are three in total), the right to an old-age pension for men is acquired when they reach the age of 65 and have 15 years of pensionable service. At least 15 years of pensionable service is also required for women, but, as of 2022, women qualify for an old-age pension at the age of 63 years.

The pension amount is calculated by multiplying the personal value points of the employee by the pension factor and the actual value of the benefit. The personal value points are calculated by dividing the insured worker's average annual salary earned during their working life by the average annual salary in Croatia. The pension factor for old-age and early old-age pensions is 1.0. The actual value of the benefit is determined by the Administrative Council of the Croatian Pension Institute biannually and is correlated to the consumer price index in Croatia.

Dependents/Survivors Benefits

In Croatia, the family members of a deceased insured person are entitled to a survivors pension if the insured person:

• Had completed at least 5 years of insurance contributions
• Had met the length of pensionable service requirements for a disability pension
• Was the beneficiary of an old-age, early old-age or disability pension or
• Was the beneficiary of the right to professional rehabilitation benefits

A survivors pension after the death of the active insured person is calculated as a percentage of the invalidity pension to which the deceased would have been entitled, according to the number of family members (effective January 2023):

• For 1 beneficiary: 77% of the pension
• For 2 beneficiaries: 88% of the pension
• For 3 beneficiaries: 100% of the pension
• For 4 beneficiaries: 110% of the pension

Invalidity Benefits

In Croatia, an insured person is entitled to a disability pension if they have a partial or complete loss of working capacity and meet the necessary age requirements.

If the insured person suffers a partial or total lack of working capacity before 65 years of age as a consequence of illness (non-occupational) or injury outside of work, they may receive an invalidity pension if the qualifying period covers at least one-third of the working life.

If the insured person's disability is due to a workplace injury or an occupational disease, they acquire the right to a disability pension regardless of the length of pensionable service.