Comprehensive Guide to Hiring Employees in Slovenia

Nestled in the heart of Europe, Slovenia is a bustling and vibrant country brimming with opportunity. With a population of just more than two million, this small yet impressive nation boasts a workforce of highly educated and skillful professionals. In fact, an impressive 63.8% of the population aged 25 and over have completed some form of tertiary education, showcasing Slovenia’s commitment to knowledge and expertise. 

Recruitment and selection in Slovenia involves a significant commitment and comes with increased liabilities and regulations, making it important to understand the process and requirements involved. To ensure a successful hiring process, it’s crucial to have a clear hiring policy and procedure manual in place. 

Now, how to get started with the hiring process in Slovenia? Hiring employees in Slovenia requires a thorough understanding of legal requirements and regulations and transparent policies and procedures. Read on to learn the nitty-gritty of how to hire employees in Slovenia. 

Things to Know Before Hiring in Slovenia

Before carrying on with recruitment and selection in Slovenia, one must know the following. 

Working hours and overtime

• The complete working hours in Slovenia are recorded weekly. The total hours must be, at most, 40 hours per week. 
• Total working hours can be shorter, but at least 36 hours per week. 
• Employers have to let their employees know in advance about overtime work.
• The maximum number of overtime hours allowed is 8 hours per week.
• However, the monthly overtime cannot exceed 20 hours, and the yearly overtime is restricted to 170 hours.
• Overtime payment is generally 130% to 150% of the standard pay in Slovenia.

Minimum Wage

• The Minimum Wage Act determines the minimum wage in Slovenia, and it is adjusted annually based on changes in the consumer price index and economic growth. 
• As of the first quarter of 2023, the minimum wage in Slovenia is 1203.36 EUR per month, an increase from the previous quarter. 
• Slovenia ranks ninth among the 22 EU member states with a statutory minimum wage.
• Employers who pay their employees less than the minimum wage can face penalties and fines.

Bonuses

• Bonuses in Slovenia are not standardized and may vary between companies and industries. 
• However, there are some instances where signing bonuses may be offered to experienced developers as an incentive to switch jobs or to increase initial pay for new employees without breaking salary structures.

Probationary and notice periods

• According to the Employment Relationship Act in Slovenia, the probationary period can last from one to six months, depending on the employment category. 
• The employer or the employee can terminate the employment relationship during the probationary period due to unsatisfactory work with a notice period of seven days.
• Employers looking to hire staff in Slovenia should note that regarding the notice period, employees who have been notified of the termination of their employment contract are required to register with the employment service of Slovenia within three days of the notification. 
• The notice period can be shorter if the employer and employee agree to appropriate compensation, and the agreement must be in writing.

Holidays

While most national holidays in Slovenia are work-free, some are not. Employers looking to hire staff in Slovenia should note that the other holidays (if any) are subject to change as per official announcements. Let us take a look at all the work-free holidays in Slovenia:

Paid vacation

• All employees in Slovenia are entitled to a minimum of four weeks of annual leave per calendar year, regardless of whether they work full-time or part-time.
• A minimum of three days of additional leave is available to workers over 55, those who are disabled, and caretakers, depending on their collective agreement.
• Paid leave can be up to double the average monthly Slovenian pay.
• Additionally, workers are generally entitled to up to seven days of paid personal leave each year.
• It is important to note that the above entitlements and compensations may vary depending on the type of employment contract and the collective agreement in place, among other factors. 

Sick leave

• An employee with a medical certificate is typically entitled to unlimited time off due to illness or injury.
• Employees absent from work without cause are entitled to 80% of their prior month’s compensation.
• Absences caused by work are entitled to 100% of the employee’s pay, based on the three-month average salary. 
• Employees receive pay until they are permanently disabled and their employment contract is terminated.
• Employers are required to compensate employees for sick leave for up to 30 days of absence, with the amount of compensation as negotiated in the contract. 
• After 30 days, the insurance office pays the sickness benefit. 
• It is important to note that an employee can only invoke the right to sick leave once in a calendar year.

Maternity & paternity leave

• Slovenia provides maternity, paternity, and parental leave to support families.
• Maternity leave is provided to every working woman and is a justified period of 105 days, which covers the birth and care of the newborn baby.
• The maternity leave is stated by law to start 28 days prior to the stipulated delivery date. 
• The paid maternity leave is only applicable if the employee has been insured prior to the leave.
• Maternity pay is calculated using the employee’s average monthly wage but must equal at least 55% of Slovenia’s minimum net monthly income. 

In addition, Slovenia provides childcare leave to allow parents to take care of their young children without losing their jobs. Parental leave is usually granted after maternity and paternity leave, and parents are entitled to share the childcare leave (with 30 days of mandatory leave for the mother). A maximum of 75 days of leave may be transferred and utilized until the child reaches the age of eight. Three years before claiming parental leave, the employee must have contributed to parental protection insurance for at least 12 months.

Parents, on the other hand, who are caring for a child with a severe or moderate mental disorder or a disabled child under the age of 18 are allowed to work part-time. Employees are actually entitled to a minimum of 15 days or up to six months of paid leave if they care for a child who is at least seven years old and has a moderate to severe mental or physical disorder. Employees are entitled to one to two weeks of paid leave if they care for a sick spouse.

Each foster parent is allowed 130 days of leave, which the parent can use any time until the child finishes the first grade of elementary school.

Social Security

Employers looking to hire employees in Slovenia should note that they are responsible for registering their employees for mandatory social security and insurance programs. These programs cover pensions, invalidity, health, and unemployment insurance and are essential to recruitment and selection in Slovenia. Registration can be completed through the Slovenian Business Point portal, and a digital certificate is required.

Overview of mandatory employer contributions (2021)

Employer tax

Slovenia employers must pay 22.1% of social security contributions while employees contribute 16.1%. There is no payroll tax in Slovenia. 

Individual income tax

• In Slovenia, individual income tax rates are applicable in line with recent amendments to the PIT Act. 
• Capital gains, rental income, dividends, and interest are all taxed at a flat rate of 25%. 
• For recruitment and selection in Slovenia, employers should be aware that if the employment income is paid by a person who is not considered a payer of tax in Slovenia, the recipient of the income should declare the income to the tax authority by the 15th day of the current month for the previous month.
• Personal income tax is collected through withholding during the year if the payer of the income is a Slovene legal person. The individual must file and pay the tax if the payer is a foreign legal entity. 

Below is a table summarizing the individual income tax rates in Slovenia:

Employers should also be aware that Slovenia’s corporate income tax rate is 19%.

Termination of employment

• In Slovenia, employers must follow specific rules and regulations regarding the termination and severance of employees.
• Employers can dismiss employees for various reasons, such as disciplinary action, redundancy, and other valid reasons. 
• The notice period for dismissal varies depending on the circumstances, and the involvement of employee representatives and a union is sometimes necessary. 
• If an employer plans to make collective redundancies, approval from state authorities is necessary. 
• Employers can also make summary dismissals in cases of gross misconduct.

Notice period

Whether an employee is fired for business reasons or due to incompetence, the following notice periods apply:

Severance Pay

Regarding severance pay, employees are entitled to receive it in cases of regular dismissal for business reasons or employee incompetence. 

The Employment Relationships Act (ERA-1) determines the basis for calculating severance pay. 

Employers must calculate the severance pay based on the employee’s length of service and salary.

The Cost of Hiring an Employee in Slovenia

While hiring employees in Slovenia, employers must take into account a number of costs, such as job postings, recruitment fees in Slovenia, etc. Various costs are related to recruitment and selection in Slovenia:

• Job advertisement posting costs
• HR team expenditures
• Employee background check fees
• Legal consultation expenses
• Travel allowances for employees
• Annual salary and benefits
• Training expenses
• Social security contributions
• Taxes

What Does a Company Need to Hire Employees in Slovenia? 

To hire employees in Slovenia, an employer must consider several factors and follow specific requirements. 

Establishing a legal entity: 

A company can either establish its legal entity in Slovenia, which involves setting up banking, accounting, and payroll services, or through contacting an Employer of Record who can handle these details.

Employment contract: 

In Slovenia, all employees must have a written employment contract that comprehensively outlines the following in accordance with the Slovenian employment rules and regulations:

• Title of job 
• Job description, 
• Salary
• Working hours,
• Paid leave
• Holidays
• Conditions for termination,
• Notice period

Various Options for Hiring Employees in Slovenia

An employer can conduct recruitment and selection in Slovenia through

• Hiring Employees Compliantly: Companies can hire employees in Slovenia by establishing their legal entity, banking, accounting, and payroll service. Companies must also comply with Slovenia’s social security system, which includes four compulsory social security insurance schemes: pension and disability insurance, health insurance, unemployment insurance, and maternity leave.
• Using an Employer of Record: Employers can use an Employer of Record (EOR) like Multiplier, who can handle all the details of hiring employees compliantly, including mandatory benefits and compliant agreements.
• Hiring Contractors: Employers can also hire contractors in Slovenia, which can be less risky than hiring employees. However, hiring contractors comes with legal and tax considerations that companies should be aware of.

The Steps to Hiring in Slovenia

To hire staff in Slovenia, the following are the rules that a company needs to follow to carry out a seamless hiring process:

• Determine the legal entity structure to use for the company, either by establishing a new legal entity or by using an Employer of Record like Multiplier.
• Posting job adverts and accepting applications is the next step. Once that has been done, companies must select the most suited employee through a thorough interview process. 
• Ensure compliance with Slovenian labor legislation by providing a written employment contract that outlines the employee’s position, remuneration, hours worked, paid time off, notice period, and termination conditions.
• Provide mandatory benefits to the employee, including social security insurance for pension and disability, health insurance, unemployment insurance, and maternity leave.
• Determine the employee’s income tax rate based on the progressive scale, which starts at 16% and ends at 50% and depends on factors such as salary.
• Ensure compliance with working hour regulations, typically involving a 36-40 hour work week, 20 days of annual leave, and 12 public holidays per year.

Let Multiplier Be Your EOR Platform in Slovenia

Understanding the complex regulations of other nations can be difficult, which is why many organizations choose an EOR platform to ensure a smooth global and legal hiring procedure. With local business activities in more than 150 countries, Multiplier is a market-leading EOR.

As your valued EOR, we give the individual you choose a seamless onboarding experience, provide legal employment contracts and standards, and expertly administer rewards and perks.