Situated in Middle Europe, Slovenia is now expanding its horizons in business. They have been upgrading the country’s business infrastructure by introducing new employment acts and labor codes in Slovenia. It has been enticing foreign nationals to come and register their business in the country.
Slovenia goes around ways to safeguard the rights of the employees in the country. It applies to employees in the public sector, those working in the private sector, and expatriates. The government puts particular emphasis on the labor code in Slovenia, adhering to the provisions made by the European Union.
In this article, let’s learn about the labor act rules in Slovenia.
Who is Covered by the Employment Act?
Article 49 of the Constitution of the Republic of Slovenia states that freedom of work applies to every individual in the country. Hence, this umbrella act helps regulate the country’s employment relationships. The Slovenian government has made this Act applicable to employers and employees from the country. It does not limit itself to only the public sector but also looks after freelancers, the private sector, and new entrepreneurs of foreign nationalities.
According to the Employee Act of 1955, the labor code of Slovenia protects any person who has entered a service contract. It works on all employees irrespective of their wages. Also, the country emphasizes the rules and regulations made by the European Union.
Employment Contract
According to Slovenian labor laws, an employment contract occurs between an employer and an employee. It takes place once the employee joins the employer’s organization. Slovenia labor law has allowed employers and employees to customize these laws per their needs. Here are the labor regulations in Slovenia according to the employment contract. They are:
- The contract must discuss the job vacancies and the post the employee might be applying for.
- Both parties must sign the contract, i.e., the employer and the employee.
- The contract must entail the nature of work, timings, and wages.
- Temporarily increased workload (if any)
- Seasonal or project work provision.
- Preparing for work and training
- Specifying whether it is a full-time or part-time contract with weekly or daily working time distribution
- The annual leave.
- The notice period.
- The indication of collective agreements by the by-laws of the employer
An employment contract is generally valid for two years. Companies can renew it after two years.
Employment Contracts
Both parties sign these contracts on the first day of joining. It is similar for both foreign nationals and native citizens. The employment contracts consist of certain essential aspects of statutory provisions, working hours, work details, overtime work, and other aspects.
An employment contract can be written or oral. However, this is optional for the commencement of the employment relationships concluded for an indefinite term. An average employment contract lasts for two years.
Alternatives to Employment Contracts
The Slovenia labor law provides alternatives to ironclad employment contracts. For example, independent workers can obtain a permit to work in the country without a permit. Instead, independent works have agreements that are called “Agreements for the performance of work,” “Contracts for carriage,” “Building contracts,” “Mandate contracts,” etc. These Slovenian frameworks are obligations for freelancers in the country.
Employment Contracts for Foreign Citizens
Foreign nationals must obtain a single permit to work in Slovenia. According to the Slovenia labor law, foreign nationals must obtain this employment permit under the Work of Foreigners Act. It also specified that highly qualified foreigners might obtain a residence permit for highly qualified employment. It is called the EU Blue Card.
Key Provisions of the Act
The labor code of Slovenia discusses various aspects of employee and employer relationships. Here are some key provisions that one might remember before opening a business in Slovenia or starting working here.
Working Hours
Working hours are also an essential element in Slovenian labor law. The Act talks about the daily and weekly regular working hours and breaks. It also prescribed the rest periods with performance and remuneration one might get for overtime. Let’s read those.
Daily Working Hours; Minimum and Maximum
The regular working time amounts to around 40 hours.
Slovenian working hour law mandates daily shifts to 8 hours with a paid lunch for 30 minutes.
For part-time and freelance employees, the lunch break applies according to Slovenian working hour law.
Rest Periods
The employees are entitled to a minimum of 12 hours which is unpaid. The weekly minimum rest period is 24 hours.
However, employees receive at least 11 hours of rest for uneven work-hour distribution.
Employers can only ask for up to 170 hours of overtime work per year.
However, this can exceed up to 230 hours in total only if the employer gets written consent from the employee for overtime work.
Night Shift
According to labor regulations in Slovenia, the night shift is between 11 am to 6 am.
However, the distribution of work time in the night shift should remain right for eight uninterrupted hours.
Special Provisions for Management
Employees working in middle management or are proxy holders of the management have different work regimes alongside night work, breaks, and daily rest.
Holiday Entitlements
Vacations and holiday entitlements are essential components of labor regulations in Slovenia. Here are some mandatory entitlements given to the employees for vacations. They are:
- Employees receive four weeks of paid annual leave, where they must take two weeks in one stretch.
- Every employee is entitled to 1/12 of the annual leave each month.
- Holiday entitlements expire when the calendar year ends. The employer has the right to request employee use at least two weeks of annual leave in the current calendar year.
Leave Schemes
Every employee of the company is entitled to leave. According to the Slovenian labor laws, some entitlements of leaves are available to every employee.
- In case of sickness, employers are bound to provide a minimum wage of paid compensation up to 120 working days of the calendar year.
- Employers pay 80% of wage compensation in case of diseases and if the employee stays at home to nurse or assist a family member.
- 70% of wage compensation if an accident occurs outside of work.
- The employee is obligated to notify their employers about their absence on the first day itself. The employee must present a medical certificate later on.
Minimum Wage
Article 2 of the Minimum Wage Act of Slovenian labor law states that a full-time employee receives a minimum wage. As of now, the minimum wage in Slovenia is €1,023.36 (without taxes). This minimum wage is valid with effect from January 2023.
Pension Fund
According to Slovenia labor law, the pension system considers three tiers: the voluntary, occupational, and voluntary personal pension plans. Any employee working in a hazardous environment is obliged to a pension plan.
Public PAYG Systems: This consists of pensions for all employed persons, both self and unemployed. Individuals are entitled to obtain a full old age pension when they reach the age of 63 and 61 for women.
Occupational and Funded Pension System: This provision is integral to labor regulations in Slovenia. It tells employers to set up an employment plan for employees who work hard in environments that might deteriorate their health. It provides optimal retirement benefits to the employees and makes them more susceptible to working in such challenging environments.
Voluntary Personal Pension Plans: Those who contribute to the public pension can participate in a voluntary occupational planning system. Employees, in this case, have to pay contributions to an open fund to determine how much the employees must contribute.
Payroll Tax
Tax regulations in Slovenia depend upon the type of business performed here. According to the Republic of Slovenia Financial Administration, here are some standard tax rates.
VAT (Value Added Tax) | 22% standard rate with 9% of reduced rates. |
Corporate Income Tax | 19% |
Personal Income Tax | 16%, 27%, 34%, 39%, and 50%. |
Social Security Contributions | 16.1% paid by employers and 22.1% paid by employees. |
Tax Relief | 100% of the amount invested in R&D up to 40% of the amount would be invested in intangible long-term assets. |
Property Tax | 0% |
Immovable Property Transfer Tax | 2% |
Payroll Tax | Abolished in 2009 |
Capital Gains Tax | 0-25% |
Payslip
There are no explicit mentions of payslips per the labor regulations in Slovenia. However, it is a good practice to issue a payslip for every employer. The primary components of a payslip are
- Name and designation of the employee.
- Salary date.
- Basic salary.
- Overtime pay.
- Other monetary benefits in the contract.
- Deduction as per applicable taxes.
An employer should also keep a database of these tax invoices with a payslip hardcopy for maintaining proper documentation.
Trial Period
A trial period in Slovenia labor law can be six months. The employee can join the company after completing the trial period.
Dismissal Rules
There are some rules and regulations to abide by for dismissal in Slovenia Labor Law. They are:
- An employer receives a redundant employee with prior 30-day notice.
- The employer has the right to terminate an employee for just cause. It can be either disciplinary reasons or economic reasons for poor performance.
- Employers can terminate within six months for the estimated misconduct.
Notice period
Employees are entitled to serve a notice period, irrespective of their employment type. Employees must serve a maximum of 30 days of the notice period. It can be increased to 45 days if it is a leadership role.
Severance Pay
According to labor regulations in Slovenia, a maximum of 18 months’ salary is the severance pay in Slovenia. It is based on the average monthly salary received three months before the termination and the employment tenure.
Data Protection and Employee Privacy
The Slovenian government follows a long tradition of data protection. It is a basic human right according to the labor code in Slovenia. Article 38 of the Constitution of Slovenia safeguards the rights of data protection and employee privacy in Slovenia. It constitutes of the following aspects:
- Employers can exercise rights on data processing with the consent of the employee.
- Employers have to ensure data safety for employees.
- Employees are entitled to access data relevant to the job listing and rectify them accordingly.
Penalties
There are only such penalties employers give if they adhere to the labor regulations in Slovenia. However, Slovenia labor law suggests that non-compliance can lead to the termination of the business. It is not a very common case in Slovenia, but it can happen in case of certain mishaps.
Compliance Strategies for Employers
Like penalties, there are no such compliance strategies for employers in Slovenia’s labor law. However, the employer has to be careful about providing the statutory entitlement of the employees to prevent termination of the company status. There are other basic compliance strategies for employers to keep in mind. They are:
- Staying updated with the new labor code in Slovenia.
- Maintain accurate records for employees’ working hours, vacations, wages, and other benefits.
- Hire an in-house HR with expertise in Slovenia labor laws.
- Partner with an Employer of Records (EOR) solution
- Hire a third-party HR agency
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