Managing and drafting employment contracts in Croatia requires a clear understanding of the country’s labour laws, which protect employees while offering flexibility to employers. To stay compliant, businesses need to carefully manage the specifics of contracts, whether they are fixed-term, indefinite, or for independent contractors.
Croatian labour laws provide various types of contracts to suit different business needs. Fixed-term contracts are ideal for temporary projects or specific tasks, while indefinite contracts offer stability and long-term security for both employers and employees. For more flexibility, businesses can also engage independent contractors or casual workers.
In this guide, we will provide everything you need to know about employment contracts in Croatia, including contract extensions, terms, probationary periods, and remote work arrangements, so you can create contracts that comply with local laws.
In Croatia, employment contracts can be verbal, but for certain arrangements, written documentation is mandatory. Contracts that include clauses such as trial periods, non-compete agreements, or notice requirements must be provided in writing. Similarly, specific types of contracts, such as fixed-term, part-time, or remote work agreements, also require written documentation.
To ensure compliance with local regulations, employers should draft employment contracts that clearly outline key terms, including job duties, working hours, compensation, and termination conditions. Doing so protects both parties and creates a foundation of trust and clarity.
Employers in Croatia have the option to include a probationary period in employment contracts. The conditions and duration of this period must be explicitly stated within the agreement. Probationary periods allow both employers and employees to assess the suitability of the role and the working relationship.
While probationary periods are not mandatory, when included, they serve as a useful tool for onboarding new hires and aligning expectations. Employers should ensure that these terms are reasonable and comply with Croatian labour laws.
Establishing comprehensive employment policies is a critical component of workforce management in Croatia. Employers are required to implement certain mandatory policies, including:
Employers should periodically review and update these policies to ensure alignment with their employment policy priorities, including those specific to areas like the Croatian islands.
One advantage of Croatia’s employment framework is its simplicity regarding third-party approvals. Employers are not required to lodge employment contracts with, or seek approval from, any third party. This streamlined process allows employers to focus on developing effective policies and practices without the added administrative burden of external reviews.
An indefinite term contract is the default and most commonly used employment agreement in Croatia. It is particularly suited for roles that require long-term commitment and stability. This type of contract offers employees the highest level of job security and is often seen as a sign of mutual trust between the employer and the employee.
Employers are encouraged to use indefinite contracts when hiring for roles critical to their operations or when aiming to foster loyalty and long-term collaboration within their teams.
Contract renewals play a significant role in managing temporary employment relationships. In Croatia, the rules differ depending on the type of contract:
Employers hiring foreign nationals must ensure timely work permit extensions to maintain compliance. Key details include:
Fixed-term contracts are a common arrangement in Croatia, often used for temporary projects, seasonal work, or when a specific task requires a defined timeframe.
This type of contract is concluded for a specific duration, task, or event. Unlike a casual contract, which allows for flexibility in hours and employment commitments, a fixed-term contract provides structure and predictability for both the employer and the employee.
Key regulations include:
Employees who work continuously for six months under a fixed-term arrangement may request a permanent contract, provided they have successfully completed their probationary period. Employers retain the right to decline this request, provided proper procedures are followed.
For independent contractors, there is no time limitation on contracts, offering employers greater flexibility for project-based work.
Notice periods for fixed-term contract workers are governed by the Labour Act. The specifics depend on:
A fixed-term contract usually ends on the agreed-upon date, completion of a task, or occurrence of a specified event. However, early termination is permissible under certain circumstances:
Employers must document any early termination to ensure compliance with Croatian labour laws and mitigate the risk of disputes.
Under Croatian law, severance pay for fixed-term employees depends on the duration and circumstances of their employment:
Employers should clearly specify severance terms in the contract to ensure transparency.
Employers may often consider whether a casual fixed-term contract is more suitable than a traditional fixed-term contract. While both are temporary arrangements, the distinction lies in flexibility:
The standard working week in Croatia consists of five days, typically from Monday to Friday, this applies to most industries unless otherwise agreed in a collective bargaining agreement or employment contract.
Employers must keep in mind the following regulations around working hours in Croatia:
The standard workweek is 40 hours, meaning employees typically work eight hours a day, five days a week. Depending on the number of working days in a given month, this amounts to 160 to 176 hours per month. For instance, a month with 20 working days equals 160 hours, while a month with 22 working days totals 176 hours. Croatian labor laws strictly regulate working hours to protect employees from overwork.
Any hours worked beyond the standard 40-hour workweek qualify as overtime. Employers must adhere to strict regulations regarding overtime limits and compensation, such as:
Employers should ensure that all overtime arrangements are clearly documented and compliant with Croatian labour laws to prevent disputes and ensure fairness.
Under the Croatian Labour Act, “working from home” is referred to as a “separate workplace” arrangement. While the Act provides basic guidelines, it leaves much of the specifics open to interpretation, meaning that working remotely in Croatia is not yet fully regulated by law.
Employers should include these key details in the employment agreement for remote workers:
As remote work grows in popularity, it is crucial for businesses to establish clear policies that comply with current laws while supporting employee productivity.
For employers managing remote workers in Croatia, certain responsibilities must be met to ensure compliance and employee satisfaction:
By addressing these responsibilities proactively, employers can create a positive and legally compliant remote work environment.
Croatia has embraced the digital nomad movement by introducing a remote work visa. This visa allows non-EU citizens to live and work in Croatia as remote employees or self-employed individuals for up to one year.
Here are some key points about the Croatia’s remote work visa:
For businesses employing international remote workers, the Croatia remote work visa presents an excellent opportunity to attract talent while ensuring legal compliance.
Like all countries, Croatia has its own rules and regulations when it comes to employment contracts — and non-compliance could land your company in hot water.
Thankfully, our team is experienced in drawing up tailored, compliant contracts in Croatia (and more than 100 countries worldwide). That means that, when you work with us, you won’t need to waste time worrying about whether you’ve got it right. Instead, you can focus on what matters: your business.
With our EoR solution, you can engage workers anywhere in the world, without putting your business at risk. No more worrying about local labour laws, tax legislation or payroll customs — we’ve got you covered.
DISCLAIMER: The information contained on this website is provided for general informational purposes only and should not be construed as legal, tax, or other professional advice on any subject matter. While we endeavor to ensure that the content is accurate and up to date, we make no warranties or representations of any kind regarding the completeness, accuracy, reliability, suitability, or availability of the information contained herein. The content on this site is not intended to be a substitute for professional advice. Users should not act or refrain from acting based on any information on this website without seeking the appropriate legal, tax, or other professional advice tailored to their specific circumstances from qualified professionals. We expressly disclaim all liability in respect to actions taken or not taken based on any or all of the contents of this website. Use of the information on this site does not create an attorney-client, tax advisor-client, or any other professional-client relationship between the user and the website or its authors.
