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Employment contracts and policies in Estonia
Contract terms in Estonia
Fixed-term contracts in Estonia
Contract extensions in Estonia
Working hours in Estonia
Remote work in Estonia
Tailored employment contracts in 100+ countries
Contracts of employment in Estonia
Every country has its own rules and requirements when it comes to employment relationships, and Estonia is no exception. For example, Estonian law requires that employees receive a written contract of employment, and sets clear rules around working hours, overtime and rest breaks. Employers must also comply with specific rules for fixed-term contracts and remote work arrangements.
In this section, we’ll explain what you need to know about employment contracts in Estonia. We will cover the minimum terms that must be included in a contract of employment in Estonia, as well as common optional clauses. We’ll also look at how fixed-term contracts work, the rules for extending them, and what employers need to know about working hours and remote work.
Employment contracts and policies in Estonia
Every country has specific rules and regulations concerning employment contracts. Read on for what you need to know to ensure your contracts are valid and compliant in Estonia.
General requirements for employment contracts in Estonia
Employment contracts in Estonia must be concluded in writing in two parts, with the employer retaining one copy and the employee the other. Contracts must also contain certain key terms, including the identities of the parties, the contract dates, and a job description. There is no specific requirement to conclude employment contracts in Estonian, though courts may require an official translation in the case of disputes. Electronically signed contracts are generally considered valid in Estonia.
Probationary periods in Estonia
Probationary periods are allowed in Estonia up to a maximum of four months. During the probationary period, either party can terminate the contract by giving notice of at least 15 calendar days. The duration of the probationary period, if any, must be clearly stated in the employment contract.
Third-party approval for employment contracts in Estonia
Unlike in some other countries, there is no specific requirement to lodge employment contracts with a third party or receive their approval. If a works council exists in the company, it may have the right to object to certain aspects of employment. Employers must also declare all new employees to the Estonian tax authorities before they start work.
Mandatory employment policies in Estonia
Employers in Estonia must implement a written occupational health and safety prevention policy in line with the Occupational Health and Safety Act. This must include risk assessments, hazard mitigation, training programs, and emergency preparedness. As of January 2025, employers with 50 or more employees must also implement a whistleblowing policy including structured reporting mechanisms, guaranteed anonymity, and protection from retaliation.
While not mandatory, it’s also considered best practice to implement other policies such as the following:
- Grievance policy.
- CCTV policy.
- Remote work policy.
- Diversity policy.
Contract terms in Estonia
Estonian labour law sets out certain key requirements for employment contracts, including the minimum terms that must be included. Employers can also choose to incorporate additional terms to protect their employees and their business.
Mandatory contract terms in Estonia
Employment contracts in Estonia must include at least the following mandatory terms:
- Name and identification details of the employer and the employee.
- The contract start date.
- A description of the employee’s duties.
- The agreed remuneration, including any variable pay elements.
- Details regarding pay schedules and methods.
- The training entitlement provided by the employer.
- The employee’s standard working hours.
- The place of work.
- Details about annual holiday and other leave.
- Details about notice periods.
- A reference to the rules of work in place.
- A reference to any collective agreement that applies.
- Details about overtime and compensation.
- The duration of the probationary period.
Optional additional contract terms in Estonia
Employers in Estonia can also choose to include additional terms in their contracts as long as they are in line with local labour laws. For example, you might decide to include:
- A non-compete clause: This prevents employees from working for competitors or starting similar businesses post-employment, typically for up to 12 months, provided the restrictions are reasonable in scope and paired with fair compensation.
- An intellectual property clause: Employers can use the employment contract to clarify that IP created during employment belongs to the employer. This ensures inventions, software, and creative work are legally assigned under Estonian law.
- A confidentiality clause: Employers can use confidentiality clauses to prohibit employees from disclosing specified business or trade secrets both during and after employment.
Provisions for remote work: Contracts may also outline telework arrangements, including location, hours, equipment, data protection, and health and safety, setting clear expectations for remote employees.
Fixed-term contracts in Estonia
Unless otherwise specified, it’sit is assumed that employment contracts in Estonia are concluded for an indefinite period. However, it is possible to conclude a fixed-term contract under certain circumstances. Read on to learn what employers need to know about fixed-term contracts in Estonia.
Limitations on fixed-term contracts in Estonia
Fixed-term contracts are only permissible in Estonia when the work is temporary in nature. For example, they may be used for seasonal employment, to substitute for an employee who is temporarily absent, or to deal with a short-term increase in workload. The maximum duration of a fixed-term contract in Estonia is five years, and there are also limitations on the number of renewals that are allowed under Estonian labour law.
Probationary periods for fixed-term contracts in Estonia
Fixed-term contracts may include a probationary period. During this period, it’s possible for either party to terminate the contract early, with limited notice. The maximum duration of the probationary period for a fixed-term contract is:
- Four months for contracts of eight months or longer.
- Half the total duration of the contract for shorter contracts.
Contract extensions in Estonia
Usually, fixed-term contracts come to a natural end upon expiry of their term. However, there are certain key circumstances when an employer may need to renew or extend a contract. Read on to learn more about fixed-term contract extensions in Estonia.
Ending a fixed-term contract in Estonia
Generally speaking, fixed-term contracts end automatically at the end of their specified term. It is usually not necessary for either party to give notice of termination. In some limited circumstances, employees or employers may be able to end a fixed-term contract early. However, this is only allowed if there is a good reason, such as a serious breach of contract by either the employer or the employee.
Fixed-term contract extensions in Estonia
Fixed-term contracts in Estonia may be extended as long as the original reason for concluding a fixed-term contract still applies. For example, if an employee is hired to temporarily replace another employee, their contract may be renewed if the original worker still has not returned to their post.
However, fixed-term contracts in Estonia may not exceed a total of five years. If an employer renews a fixed-term contract more than twice consecutively (with less than two months between the two contracts) or extends the contract more than once within the five-year period, the contract is automatically converted to an indefinite-term contract.
Exception for short-term unemployed contracts in Estonia
As of December 2022, a new rule allows for unlimited fixed-term contracts of up to eight calendar days within a six-month window for people registered as unemployed. However, if an additional fixed-term contract is concluded with the same employer after the six-month period is up, the worker is considered to be employed on an indefinite basis.
Working hours in Estonia
In Estonia, standard working hours are 40 hours a week, which are typically spread across five working days of eight hours each. The standard working week is Monday–Friday. Employers should understand the rules and regulations surrounding overtime and working hours in Estonia before hiring employees so they can ensure compliance.
Laws on working hours in Estonia
The rules surrounding working hours in Estonia are primarily informed by the EU Working Time Directive. This piece of legislation provides a standardised approach to working hours across the EU, ensuring that employees are not expected to work unreasonable hours.
Maximum working hours in Estonia
The maximum working hours in Estonia are 48 hours per week, including overtime. However, to allow for variations in working hours, this can be calculated as an average over a four-month reference period (extended to 12 months in certain sectors). This arrangement is known as ‘summarised working hours’. An employee may not work more than a total of 52 hours in any seven-day period.
Overtime in Estonia
All work above an employee’s agreed working time is considered overtime in Estonia. If the employer works summarised working hours, overtime must be calculated at the end of the reference period (generally four months). Overtime is usually only permitted by agreement between the employer and the employee, and employees must not exceed the total maximum limit of 48 hours per week.
Compensation for overtime must also be agreed between the employer and the employee, but it must generally be at least 1.5 times the employee’s regular wages. Alternatively, employers can choose to provide workers with additional time off in lieu of overtime pay.
Breaks and rest periods in Estonia
Employees in Estonia are entitled to a break of at least 30 minutes if they work for six hours or more in a day. This is generally not included in working hours calculations unless the nature of the work means that the employee can’t leave their workplace during their break.
Employees also have the right to a rest period of at least 11 consecutive hours between each working day, and a weekly rest period of at least 48 consecutive hours, which is generally granted on Saturday and Sunday. This can be reduced to 36 hours in a summarised working time arrangement, as long as the employee’s average weekly rest period is at least 48 hours over the course of the reference period. It is not possible for employees to waive these rest periods.
Remote work in Estonia
As in many countries, remote work has become significantly more common in Estonia, particularly since the COVID-19 outbreak in 2020. Here’s what employers need to know about remote work in Estonia.
Remote work laws in Estonia
Unlike some other EU countries, Estonia does not yet have a specific remote work law separate from its general employment legislation. Instead, remote work is regulated under the Employment Contracts Act, which allows employers and employees to agree to teleworking terms in the employment contract or internal work rules.
Employer responsibilities towards remote workers in Estonia
Although there is no specific law in place, employers still have certain responsibilities towards their remote employees in Estonia. For example, they must ensure compliance with health and safety requirements, even while employees are working from home. Employers must also ensure employees do not exceed maximum working hours and grant them the right to disconnect outside of work time.
Other employee responsibilities include:
- Data protection requirements under the GDPR.
- Provision of equipment or reimbursement for costs (if agreed).
Remote work visa in Estonia
As of June 2020, Estonia offers a remote work visa that allows non-EU remote workers to live and perform remote work in Estonia for up to one year, subject to certain conditions. This visa does not permit local employment — applicants must show they have a remote job or freelance position and meet at least a certain minimum income requirement in order to be eligible for the remote work visa.
Tailored employment contracts in 100+ countries
Like all countries, Estonia 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 Estonia (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.
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