What do you need when hiring your first employee?

What must be in place before the first working day?

Two things: a written employment contract and the employee’s registration for compulsory social insurance.

Under the Labour Law (Zakon o radu), the employment contract (ugovor o radu) is concluded in writing, before the employee starts work (Article 32, paragraph 1). If no contract has been concluded, the employee is deemed to have entered into employment for an indefinite period from the day they started work (Article 32, paragraph 2).

The registration is filed electronically, through the Central Register of Compulsory Social Insurance (CROSO), at the latest before the employee starts work. The employer gives the employee a copy of the registration.

What must the employment contract contain?

The Labour Law (Article 33) lists what the contract must contain, among other things: details of the employer and the employee, the type and level of qualification, the job title and description, the place of work, the type of employment (for an indefinite or a fixed period, with its duration), the start date, the working hours, the amount of the base salary, the elements for determining the salary and the deadlines for paying it.

If you agree on a probationary period (probni rad), it may last six months at most (Article 36). A fixed-term contract may, as a rule, last 24 months at most, with or without breaks (Article 37).

Which acts must the company have?

The Law on Safety and Health at Work (Zakon o bezbednosti i zdravlju na radu) requires a risk assessment act (akt o proceni rizika) for the job positions, and training of the employee in safe and healthy work. These obligations do not depend on the number of employees.

Employees’ rights are governed by a collective agreement, an employment rulebook (pravilnik o radu) or the employment contract. If no collective agreement applies to you, an employment rulebook is the most common way to make the rules on salary, leave and working hours the same for everyone. Smaller employers sometimes settle these matters in the employment contracts themselves.

Under Article 24, an employer with up to ten employees is not required to adopt a job classification act (akt o organizaciji i sistematizaciji poslova). Once the company adopts one, the employment contracts refer to it, and later so does the procedure when a job is abolished as redundant (tehnološki višak).

Employment contract or work outside employment?

Some work can be done outside an employment relationship: temporary and occasional work (privremeni i povremeni poslovi), a contract for services (ugovor o delu) or supplementary work (dopunski rad). Each of these contracts has its own conditions and limits.

If someone does a permanent job for you, on your instructions and within your working hours, a wrongly chosen contract may be interpreted as employment, with all the obligations that follow from it: salary, contributions and annual leave.

When do you not need a lawyer?

Registration for insurance, salary calculation and tax returns are usually handled by an accountant, and you do not need a lawyer for that. Agree the order and the deadlines with your accountant before the first working day. Legal help makes sense for contracts that need more care: a probationary period, working from home, a non-compete clause (zabrana konkurencije) or an employee coming from abroad.