Slovenia, with a population of just 2.1 million, is a small but beautifully landscaped country famous for its many ski resorts and 8,000 caves, some over two million years old … amazing as Slovenia is only 30 years old! The country became independent in 1991 from federal Yugoslavia and although it has one official language, there are 46 dialects. Slovenia is an attractive destination for both tourists and people looking to work there. Companies expanding into this European Union (EU) trading bloc country are attracted by its well-developed economy, which enjoys stability and prosperity. Slovenia has been a member of the EU since 2004 and of the Eurozone and Schengen Area since 2007.
Many companies expanding into new territory look towards a Professional Employment Organisation (PEO) and Employer of Record (EOR), such as Bradford Jacobs, to set up their business, recruit staff and operate payroll to save time and money, including acquiring immigration and work documentation.
The different types of Visas and Work Permits for Slovenia
European Union (EU), European Economic Area (EEA) and Switzerland citizens do not require either a visa to enter or work documentation to work in Slovenia, which has been an EU member since 2004.
To enter Slovenia for up to 90 days in a 180-day period, citizens can do so if they have:
A National ID Card for European Union (EU) citizen
A valid passport for those are from a visa-exempt country
A valid passport with a Schengen Visa if a visa is required
A valid visa or residence permit from another EU country
The passport must have at least three months validity from the date holder intends to leave Slovenia. Schengen visas are issued by the Ministry of Foreign Affairs in an embassy or consulate outside of Slovenia. If the procedure goes through a Visa Center, this can be done online.
For longer than 90 days, Third Country Nationals (TCNs) can reside in Slovenia if they have one of the two types of residence permit:
Temporary Residence Permit
Permanent Residence Permit
Temporary Residence Permit
These are issued when applicants have 1) A ‘Provable Purpose for Residence’, there are around 22 categories, PLUS 2) they are able to meet the conditions of the permit. These are issued for up to one year depending on the reason. Generally, issued outside Slovenia at an embassy or consulate in applicant’s home country of residence. Applied for by either the individual or in cases of employment, the employer.
Purpose for Residence in Slovenia includes:
Employment or Work
Cross Border Worker
EU Blue Card
Permanent Residence Permit
These can be applied for after a certain period of time (up to five years) when applicants have been residing continuously in Slovenia on a Temporary Residence Permit.
Work Documentation for Slovenia
Employment of less than 90 days:
There are no short-term permits for employment, there is only a process for exemptions to the main work/residence permit.
EU, EEA and Swiss citizens have the right of free movement within the EU, including Slovenia. However, EU/EEA/Swiss companies who post workers to provide services must register the posting with the Employment Service. This also includes TCN companies posting workers on a short-term basis (90 days in a year) who supply goods and services in Slovenia.
TCNs who work as company representatives also complete a registration form as they must be uploaded on to the Court Register.
For short-term transfers from a company abroad to a Slovenia affiliate for 90 days in a six-month period, known as EU ICT (Intra-Company Transfers), employers must register the employee within eight days of arrival with the Employment Service (Labour Authority). Employers should inquire to the Administrative Units Service whether or not a Single Permit is required. If not, paperwork should be carried as proof of exemption for the authorities in Slovenia.
Employees entering the country for short-term work who are exempt from a work/residence permit, must apply for a Schengen Visa if they are not from a visa-exempt country or part of the EU/EEA or a Swiss National.
For employment exceeding 90 days
The Single Permit is the main work documentation, implemented in 2015, combining a temporary residence permit and work permit into a single procedure. Applicants no longer require two separate permits. The only ‘work permits’ that are issued now are under special agreements with Bosnia and Herzegovina and Serbia citizens.
Note: The Single Permit allows entry, residence, and employment in the country.
Types of permits available through the Single Permit process include:
Employment (local hire): such as working for a company registered in Slovenia on a local contract. These vacancies are referred to the Employment Service to see if any local or EU citizen can fill the position i.e., a Labour Market Test
EU Blue Card for highly qualified personnel with a degree or similar
Intra-Company Transfer from company abroad to a financially affiliated company in Slovenia, up to three years (one year for a trainee) for management positions and specialist personnel
Posted workers employed by company abroad moving to branch office in Slovenia to promote cross border services or training purposes – for up to 12 months (including trainees)
Self-employment for entrepreneurs and investors who have lived in the country for 12 months OR provide independent services OR are on the Slovenian Commercial Register (PRS)
Single Permits are issued by the Administrative Units Service (Upravna enota) with the approval of the Employment Service of Slovenia (ESS) which is covered by the Employment, Self-employment and Work of Foreigners (Aliens) Act. The Administrative Units Service approaches the ESS and ensures all legal requirements are met and the permits are approved. The process does not involve the applicant.
Note: The Single Permits are issued in the form of a card stating, ‘Single Permit.’
Third Country Nationals who have a valid Single Permit may change the job position with the employer, change the employer, have more than one employer or commence a new employment contract without having to apply for a new Single Permit. BUT, written approval must be sought first at the Administrative Unit in the employee’s local area before changes are made.
Companies moving staff from overseas need to understand the nuances of immigration and work documentation and the relevant laws governing these processes. Many companies look towards Professional Employer Organizations, such as Bradford Jacobs, with over 20 years of experience in these matters, to ensure compliance and keep up with the paperwork and any changes in legislation, while you push forward on other fronts.
How to apply for Visas and Work Permits for Slovenia?
The main long-term work documentation is the Single Permit for those wanting to work in Slovenia. This is a combined work and residence permit, introduced through a European Union (EU) Directive in 2015, to simplify the process for Third Country Nationals (TCNs). NOTE: The only ‘work permits’ that are issued now are under special agreements such as for Bosnia and Herzegovina and Serbia citizens. Citizens of the EU and European Economic Area, plus Swiss nationals do not require work documentation to enter, live or work in Slovenia, just a valid National ID or passport.
The Three Main Types of Single Permits required for employing TCNs are: Single Permit for Local Hire – for locally contracted employees
Offer of employment and signed contract with local entity/company registered in Slovenia for up to one year. Can be renewed for up to two years
Included on the company’s payroll
Salary offered in accordance with any Collective Bargaining Agreements. If none, no lower than the monthly minimum wage which as of 2022 was €1,074.43 (US$1,041.11)
Educational, technical or professional qualifications required for the position
Note: Family cannot join holders of this permit until they have resided for two years and have a one-year validity on single permit at the time.
This permit can be applied for by the employer or employee
The employer first has to notify the Employment Service of Slovenia (ESS) so a Labour Market Test can see if any locals or EU nationals can fill the role. Form ‘request for work’/PDM
The application form can be submitted to the Consulate or Embassy by the employee along with his biometrics (fingerprints). OR, the employer can apply to the local Administrative Unit where the employee will work, or where the head office of the company is located. The employer still requires the biometrics to apply. The Administrative Units Service seeks approval from the ESS regarding any Labour Market Test
Collect the permit from the Embassy once it has been granted, which can take up to four months. This also serves as an entry visa
Within eight days of arrival, employees must register at the Administrative Units Services
Within 15 days of receiving the Single Permit, the employee must start work
EU Blue Card Single Permit – for highly qualified workers
Offer of employment and signed employment contract with local entity/company registered in Slovenia for a minimum of one year. This can be initially for two years and renewed for three years (better position to apply for permanent residency which requires five years)
Included on the company’s payroll
Salary offered should be 1.5 times the ‘average monthly gross salary’ in Slovenia which as of July 2022 was €2,002.27 (US$1,940.16)
Education to university degree level or higher technical or specialist education
Satisfy all other conditions for the position and permit
The employer has to notify the ESS, so a Labour Market Test can check if any locals or EU nationals can do the job
The employee applies for the EU Blue Card through the local embassy or consulate in country of residence where they also have fingerprints taken. OR the employer applies directly through the Administrative Units Service on behalf of the employee, at the Administrative Unit where the employee will work, or where the head office of the company is located. The fingerprints are still required for the application. The Administrative Units Service seeks approval from the ESS (ex officio) as to legality of the application e.g., completed Labour Market Test
Once approved, collect the EU Blue Card from the embassy or consulate. This is also the entry visa
Within eight days of entering Slovenia, employees must register their address with the Administrative Units Service
Employment must start no longer than 15 days after collecting the permit
Note: This permit allows family reunion with no time restriction.
Dealing with tax in Slovenia while overseas can be tricky and pose complications that would demand expert guidance. They have competitive rates for both personal and corporate taxation – among the attractions drawing foreign investment into the country. However, there are still challenges and pitfalls. With more than 20 years of experience in Global Expansion services, Bradford Jacobs ensures our clients comply with every variation of tax laws across the globe. Our ‘know-how’ is vital for international companies expanding into Slovenia.
Bradford Jacobs’ dedicated specialists remove the burdens of worrying about tax complications while you focus on building your business in a new territory. From locating the brightest talent to running your payroll, our Professional Employer Organisation (PEO) and Employer of Record (EOR) specialists will guide you in every way.
Overview of Tax in Slovenia
Personal Income Tax (PIT):
The Personal Income Tax Act removed the top rate of 50% in March 2022, leaving five bands from 16% up to €8,755 (US$8,483) and a top rate of 45% for the excess over €74,160 (US$71,860). A general tax-free allowance of €4,500 (US$4,360) applies to personal income.
Social Insurance Taxes:
Employers’ contribution amounts to the equivalent of 16.1% of employees’ salaries from their payroll. Employers withhold 22.1% from their employees’ gross salary and remit to the Health Insurance Agency (ZZZS).
Corporate Income Tax (CIT):
The rate is 19% on the worldwide income for tax resident individuals and companies, whereas non-residents are taxed only on their income sourced in Slovenia.
Known in Slovenia as DDV (davek na dodano vrednost), the headline rate for Value Added Tax is 22%, with a rate of 9.5% applying to some foodstuffs, plus seeds, plants, medicines and medical equipment, passenger transportation and books among other categories. A 5% rate applies to certain books and e-books. Zero rate applies to Intra-Community transactions and international transport services and exports, for example. Companies or individuals must register for VAT if they had turnover of €50,000 (US$48,450) in the previous 12 months.
Withholding Tax (WHT):
A rate of 15% applies to payments made by resident and non-resident individuals to recipients outside Slovenia, unless Double Tax Treaties apply. Tax applies to dividends, interest, copyrights, patents and licences among other categories.
Capital Gains Tax (CGT):
A flat rate of 25% applies to gains on interest, dividends and rental income, decreasing according to the length of the holding period.
Individual Tax Rules in Slovenia
The tax year is generally from January 1 till December 31
Spouses must file individual returns
Employment income tax is withheld each month by the employer and remitted to the Slovenia Financial Administration (SFA)
Individuals are tax residents if they have a permanent home in Slovenia or total more than 183 days in Slovenia in a calendar year, and are liable for taxes on their worldwide income
Non-residents are liable for income earned in Slovenia
Individuals with income other than from employment payroll can be liable for taxes in five other categories: business activities; agriculture and forestry; property rights and rentals; income from interest, dividends; capital gains, such as rewards, gifts, prizes and scholarships. All must be declared
The SFA issues a preliminary tax assessment by the end of May the following year, after which payment must be made within 30 days
There are five bands from 16% up to €8,755 (US$8,483) and a top rate of 45% for the excess over €74,160 (US$71,860)
A general tax-free allowance of €4,500 (US$4,360) applies to personal income
Employer’s Social Insurance and Statutory Contributions
Employers contribute the equivalent of these percentages of their employees’ gross salaries to the Health Insurance Agency (ZZZS).
Companies planning to extend operations into new territories have the option of opening a subsidiary overseas to ‘test the market’. This is a tempting move but can be a risky business venture in both time and money – with no guarantee the effort and financial investment will produce success. A subsidiary established in Slovenia by a foreign parent company is a separate legal entity, due to having its own capital and independent administration. Foreign companies typically choose a private limited liability company, a (Družba z omejeno odgovornostjo), generally known by the initials DOO and which is governed by the Slovenian Companies Act.
Expanding overseas is a major step. The road to setting up a subsidiary can be a rocky one for foreign companies determined to handle the process themselves. If the move fails, companies face the added costs and bureaucracy of closing their operation, selling property and paying off employees. This spells potential trouble while also trying to focus on building business in your home country.
The best alternative is to use a Professional Employer Organisation (PEO) and Employer of Record (EOR) such as Bradford Jacobs to find the best local talent and administer your payroll in Slovenia. Your company will be up-and-running in days rather than weeks or even months … and without running any risks.
How to Set Up a Slovenian Subsidiary?
The first decision for foreign companies planning their move into the Slovenian economy is to select the business structure best suited to their plans. The most popular choice is to open a subsidiary as a (Družba z omejeno odgovornostjo), generally known by the initials DOO and which is governed by the Slovenian Companies Act.
The DOO is a legal entity whose owner(s) can be one or more domestic or foreign legal and natural individuals. The owners or members are not responsible for covering the company’s liabilities
Initially, the unique company name must be verified with the Business Register (PRS), which is managed by the Agency for Public Legal Records and Related Services (AJPES).
Additional registration requirements and responsibilities include:
Minimum share capital for a DOO is €7,500 (US$7,316) which must be deposited in an account before registration
Register banking documentation with the PRS confirming deposit of required capital
Register Articles of Association with the PRS, signed and notarized by all founders and detailing the company address, shareholders’ obligations and share contribution
Employers must register with the Employment Service of Slovenia (ESS) before starting operations
Obtain company Tax Identification Number (TIN) from the Slovenia Financial Administration (SFA) and register for income tax, corporate tax, indirect taxes and capital gains tax, plus social insurance contributions
Register a minimum of one shareholder and director
Documents must be in Slovenian
Note: A ‘simple’ DOO can be set up via the Slovenian Business Point portal via a digital certificate. All share contributions must be paid in cash before submitting application; a standard form of Memorandum and Articles of Association (which cannot be amended) must be adopted. In the case of a sole member, they must be on the Slovenian population register and also be the sole manager or director.
Benefits of Setting Up a Slovenian Subsidiary
A limited liability company operating as a subsidiary in Slovenia is a separate legal entity to the parent company and can act independently. Generally, the status of the subsidiary protects the foreign parent company and the shareholders from responsibility for its debts or liabilities.
The subsidiary can decide on its business activities, independently of the parent company, and ‘test the market’ by entering into different areas of operation. The subsidiary is also free to draw up its own contracts and agreements with clients.
Other benefits for a subsidiary:
Easier to obtain potential benefits and incentives and enter into contracts with other Slovenian and European Union companies
Subsidiaries will have greater impact with clients and suppliers, as they imply more permanency than branches
Employees feel there is more stability and job security than from being with a branch
However, there is a more straightforward option to the risks and costs of setting up a subsidiary in Slovenia … by working with Bradford Jacobs. Our global Professional Employer Organisation (PEO) networks will locate staff, place them in their roles to be up-and-running within days … not the weeks or longer it could take to find premises and open a subsidiary.
All entities established in Slovenia come under the Slovenian Companies Act. As a member of the European Union, companies incorporated in other EU states and those of the European Economic Area (EEA) can operate business in Slovenia under the Act on Services in the Internal Market. Foreign companies from outside the EU or EEA can operate only through subsidiaries or branches.
Subsidiaries operating as limited liability companies in Slovenia incorporate through the Business Register (PRS) and operate in compliance with the Companies Act.
Registration and Documentation:
Verify unique company name with the Business Register (PRS), which is managed by the Agency for Public Legal Records and Related Services (AJPES)
Register documentation with the PRS confirming deposit of required capital
Register Articles of Association with the PRS, signed and notarized by all founders and giving details of company address, shareholders’ obligations and share contribution
Registration with the Employment Service of Slovenia (ESS) before starting operations
Registration with the Slovenia Financial Administration (SFA) to obtain company Tax Identification Number (TIN) to deal with income tax, corporate tax, indirect taxes and capital gains tax, plus social insurance contributions
Accounts and Taxation:
Minimum share capital for a DOO is €7,500 (US$7,316) must be deposited in an account before registration
All partners in the subsidiary must have a personal Tax Identification Number
Bank account signatories must be present in Slovenia
Submit annual accounts to the SFA
There is no statutory requirement for audits
Pay corporate tax at 19% and DDV (Value Added Tax) at 22% on goods and services
Register a minimum of one shareholder (maximum 50) and one director
The Republic of Slovenia’s modernization and diversification, even before its independence from Yugoslavia in 1991, laid the foundation for the nation’s forward-looking, 21st century market economy. Slovenia is poised to make the most of its location in southern Central Europe as a gateway to the region’s potential for international companies.
Slovenia’s location has Austria to the north, Hungary to the east, Croatia to the south and a short border with north eastern Italy. The port of Koper on Slovenia’s short Adriatic coastline of just 47 km (28.2), opens up export and import links with the Mediterranean, while excellent infrastructure handles national and international transit.
The relatively young nation cemented its place in Europe’s economic superstructure by joining the European Union in 2004 and Schengen Area in 2007. Slovenia also joined the Euro zone that year, the first Central Eastern European (CEE) nation to do so.
Expanding your business into Slovenia
Potential problems – plus a few crisis points – are bound to come with opening a subsidiary and expanding business in any overseas territory. Initially, moving staff across the world involves complications surrounding immigration documentation and work permits. Then there will be issues over compliance with employment legislation before a foreign company can take its place in Slovenia’s developing economy.
When employees are in place, who will handle payroll? How will your company deal with regulations on taxation, entitlements and benefits, termination and severance?
There are other issues, too. Where will you find manufacturers, offices and distributors?
Drawing up an expansion blueprint is not enough. Your business plan will have to deal with all these issues.
There is a simple and effective alternative – by partnering with a Professional Employer Organization (PEO) and Employer of Record (EOR) such as Bradford Jacobs. This way, companies can plot a time-efficient and cost-effective route to locating and employing staff in Slovenia.
Some Slovenian Facts
Capital – Ljubljana
Population –1 million
Regions and provinces – Istria, Inner Carniola, Gorizia, Upper Carniola, Lower Carniola, Carinthia, Lower Styria, Prekmurje
Official languages – Slovene
Economy and world ranking – Gross Domestic Product €52.21 billion (US$51.1 billion) in 2021 according to Slovenia Statistical Office; 88th in the world (IMF)
Leading sectors – (approx.) Service sector 57%; industry 30%; agriculture 2%
Main exports – Vehicles, parts and accessories; electrical machinery and appliances; pharmaceuticals and medical products
Main imports – Machinery and transport equipment; chemical products; mineral fuels and metals
Main trading partners – Other European Union members, principally Germany, Italy, France, Croatia, plus other republics of the former Yugoslavia
Government – Parliamentary republic
Currency – euro
Advantages and Challenges when entering the Slovenian Market
Advantages of expanding into the Slovenia market include:
Finance: Economic stability from membership of Eurozone
Location: Southern central position in Europe, with the port of Koper on Adriatic coast, places Slovenia in a strong strategic location for transit of goods from western Europe to the eastern Mediterranean and Baltic nations
Workforce: Well-educated and motivated, many multi-lingual in the business sphere; innovative and creative, open to new ideas
Economy: Modernized and diversified with strong sectors for automotive, pharmaceuticals, electronics and tourism, with manufacturing integrated into the European production chain
Taxation: Corporate tax rate just 19%
Infrastructure: Excellent motorway and rail links to neighboring countries; three international airports; modern port of Koper on Adriatic coast
Challenges of expanding into the Slovenia market include:
Economy: Small domestic market; reliance on regional exports and its automotive industry
Bureaucracy: Slow administrative and judicial processes; frustration dealing with state-owned businesses
Workforce: Demographically ageing workforce leading to skills shortages
Companies extending their operations into Slovenia need a complete grasp of local employment contracts. The employment relationship with the employees is governed by the local Labour Code, supplementary legislation, and European Union Directives, dealing with benefits, entitlements and compensation. These issues are a major consideration during the process of hiring, onboarding and drawing up contracts with new staff.
Once Bradford Jacobs’ Professional Employment Organisation (PEO) recruitment networks have located the best talent for your company, we step in to steer you through this crucial element of recruitment. Thanks to our PEO and EOR services, we can provide compliant labour contracts for your employees in Slovenia, including local benefits. Our team keeps track of local laws and regulations daily to be duly aware of updates that can be implemented in working contracts and to ensure a smooth entry for your business into the local economy.
The different types of Slovenian Employment Contracts
The Employment Relations Act (ZDR-1) lays down mandatory requirements for contracts between employers and employees. Before entering into a contract, employers must have verified there is no suitable Slovenian for the position, or nationals from European Union or European Economic Area nations. Contracts must be signed by both parties at the latest the day before starting work.
The Act recognises the following contract types:
Permanent, open-ended employment contracts: The usual type of indefinite contract has no end date and is terminated by following the correct procedures as stipulated by the ZDR-1.
Fixed-term employment contracts: These can be applied only in certain cases, including: work limited to a fixed period; temporary replacement of an employee due to such as maternity or sick leave; seasonal or project work. Fixed-term contracts are generally restricted to two years, but can be longer where temporarily replacing staff or for a specific project.
Part-time employment contracts: These provide the employee with pro rata entitlements, according to the terms of the agreement.
Probation periods: Usually between one and six months, depending on the nature of work. Can be terminated by either party with seven days’ written notice.
Collective Bargaining Agreements (CBAs): Collective agreements are widespread in Slovenia, covering close to an estimated 80% of the workforce. In the private sector they are negotiated at industry and company level by trade unions and employers, but not at the national level since 2006. The government also takes part in some tripartite agreements with unions and employers. Industry-level CBAs must be registered with the Ministry of Labour, Family and Social Affairs.
Slovenian Employment Contracts Requirements
The international economic landscape can change rapidly. Foreign companies exploring global expansion must make the right decisions equally quickly and those hiring employees in Slovenia have to decide which business structure best suits their plans.
Foreign companies need to open a subsidiary to establish their presence in Slovenia – the required route to operate payroll for their staff and deal with the revenue and social insurance authorities. The most popular choice is to open the equivalent of a private limited liability company, a (Družba z omejeno odgovornostjo), generally known by the initials DOO and which is governed by the Slovenia Companies Act.
After incorporating the subsidiary, employers must be up-to-speed with contractual requirements of onboarding. These include:
The usual contract type is open-ended or indefinite.
Fixed-term contracts are allowed only in specific circumstances and are generally restricted to two years.
Contracts should be in writing, in the Slovenian language, and signed by the employer and employee before employment starts.
The contract must specify the type of agreement and include: full details of both parties; location, job position and role; salary and payment schedule; annual leave; notice periods; applicable collective agreements.
Probation periods can be written into the contract.
At interview, employers should ask questions only strictly relevant to the nature and working conditions of the position and none of a personal nature or that violate the applicant’s privacy, which is protected both by Slovenian and European Union legislation.
Employee benefits, compensation and entitlements in the Republic of Slovenia are mainly governed by the Employment Relations Act (ZRD-1), with supplementary Acts covering such as Health and Safety at Work, Labour Market Regulations, Labour and Social Security Registers, Minimum Wages, Pension and Disability Insurance and Personal Data Protection.
Foreign companies’ responsibilities reach beyond simply complying with tax, social security, and payroll regulations. Failure to comply with specific rules applying to benefits and entitlements runs the risk of fines and sanctions. Employers must have a firm grasp of what is guaranteed for their employees, which will affect the employer-employee relationship. This is where Bradford Jacobs points you in the right direction, drawing on over 20 years of experience as a Professional Employment Organisation (PEO) and Employer of Record (EOR).
What are the Compensation Laws in Slovenia?
The Employment Relations Act (ZDR-1) governs the employer-employee relationship in Slovenia, supplemented by the Health and Safety at Work Act, the Labour Market Regulation Act, the Labour and Social Security Registers Act, the Personal Data Protection Act and the Pension and Disability Insurance Act among other pieces of legislation.
Collective Bargaining Agreements (CBAS) are also a factor and can improve benefits and entitlements for employees. The Labour Inspectorate ensures legislation is strictly applied, while disputes go before specialist Labour and Social Courts.
Maternity Leave and Benefit: Maternity leave of 105 days includes 15 compulsory days and usually begins 28 days before the due date. Employees fully insured under Parent Protection Insurance receive benefit of 100% of their average salary over the previous 12 months. Those insured for 12 months over the previous three years, or from the day before their due date receive between 55% and 105% of the national minimum wage. There is also provision for paid paternity and parental leave
Sick Leave and Benefit: Unlimited sick leave includes benefit of 80% of the preceding month’s salary if incapacity is not work-related. If incapacity is work-related, benefit is 100% of average salary over the previous three months. Employers pay benefit for the first 30 days, with subsequent payments from the Health Insurance Institute (ZZZS)
Minimum Wages: The monthly national minimum wage for 2022 was €1,074.40 (US$1,050), applying to full-time employees working at least 36 hours a week
Probation Periods: Depending on the nature of the work, trial periods can be between one month and six months. They can be terminated by either side with seven days’ notice in writing
Working Hours: Under the ZDR-1 a full working week is 40 hours, no fewer than 36 and spread over at least four working days. There must a continuous break of at least 24 hours once a week and 12 hours between two working days. The working day includes a paid lunch break of 30 minutes
Overtime: The maximum limits on overtime are eight hours per week, or 170 annually. Employers must make a written request for staff to work overtime, with rates between 30% and 50% above the normal hourly pay as set by collective agreements
Notice Periods: ‘Regular dismissals’ depend on length of service regarding notice periods, as follows: Employment up to one year – 15 days; more than one year up to two years – 30 days; two years or more – 30 days plus extra two days for every extra year up to maximum of 60 days; employed 25 years or more – 80 days; dismissal due to fault of employee – 15 days; failed probationary period – seven days. Note: The Employment Relations Act (ZDR-1) lists eight categories for ‘extraordinary dismissals’ where no notice periods are required
Termination / Severance / Redundancies: The ZDR-1 distinguishes between ordinary and extraordinary dismissals. Extraordinary termination without notice must comply with strict regulations. Ordinary termination must be preceded by an employer’s letter giving reasons and suggesting remedies. Where employees are entitled to severance pay, it is calculated as follows: One year to 10 years’ service – one-fifth basic monthly salary for each year; 10 years up to 20 years – one quarter of basic monthly salary for each year; more than 20 years – one third of basic monthly salary for each year
Paid Vacations: Employers receive a minimum of four weeks paid leave – 20 days for a five-day week and 24 days for a six-day week – with two weeks taken consecutively. Parents receive one extra day for each child under 15 years old, and other categories, such as disabled personnel, have three extra days. Those employed less than a year or whose work is terminated are due leave adjusted pro rata
Social Security in Slovenia
The Health Insurance Agency of Slovenia (ZZZS) is responsible for the mandatory social security system, with the Public Legal Records and Related Services (AJPES) verifying that compulsory contributions are made by both employers and employees. Employers contribute the equivalent of 16.1% of employees’ salaries from their payroll. Employees contribute 22.1% from their gross salary, which is withheld by their employer and remitted to the ZZZS.
Contributions cover insurance for: pension and disability; health; parental care; unemployment; occupational illness or injury. Employees can also enter individual or collective schemes that are financed by equity funds under the Insurance Supervision Agency.
International companies expanding into the Republic of Slovenia know that recruiting top talent is essential for their business plans to develop successfully. Slovenia’s membership of the European Union (EU) allows workers from other EU nations free movement into the employment market, with those from Norway, Liechtenstein and Iceland, from the European Economic Area (EEA) plus Switzerland. This frees employers to throw the recruitment net over a wider area.
However, jobs must generally first be offered to locals, with some exemptions applying to highly-skilled individuals in skills shortage sectors. It is also mandatory for all vacancies to be advertised through the Employment Service of Slovenia (ESS) for a ‘Labor Market Test’, who may recommend candidates for the vacancy from their database. The recruitment process is rarely straightforward and red tape has to be unraveled … principally surrounding immigration regulations if foreign companies are moving staff into the country from outside the EU or EEA. Once staff are in place, employers must comply with strictly-applied legislation setting out their obligations and the guaranteed entitlements of their staff.
The Recruitment Process
International companies recruiting in Slovenia have a wider target market than just Slovenian citizens, due to its membership of the European Union (EU). This permits workers from fellow-EU nations to have free movement into the employment market, plus citizens from the European Economic Area (EEA)’s Norway, Liechtenstein and Iceland, as well as Switzerland.
However, employers must prove that vacant positions cannot be filled by a Slovene or EU / EEA national before being offered to a ‘Third Country National’. It is compulsory for all vacancies to be advertised, and those in the public or state sector must be logged with the Employment Services of Slovenia (ESS). This complicates recruiting staff from major employment markets such as the USA, UK, Australia and Asia. Recruitment is the first stage in making your company successful and competitive in Slovenia. But these restrictions complicate moving staff into the country … along with obtaining correct immigration and work documentation.
Once employees are recruited and onboarded in Slovenia, the employer must comply with various responsibilities, including:
Registering employees with the Employment Service of Slovenia (ESS). Foreign employers can register non-Slovenian employees online
Foreign employees must register a place of residence with their local police station and Administrative Unit within three days of arrival
Obtaining the employee’s Personal Identification Number (EMŠ0), essential for arranging banking, taxation, social security contributions and other transactions
Obtaining employee’s Tax Identification Number (TIN) from the Slovenia Financial Administration (SFA) and registering their employment
Employees’ Legal Checks in Slovenia
Pre-hire checks are generally initiated by the employer asking the candidate to supply a number of documents before employment can be agreed upon and before drawing up the contract. Legally-required documents when recruiting in Slovenia include the following:
Scope: Generally, an employer should only ask questions and request information that is relevant to the position being applied for. An applicant can be asked to perform a test relevant to their suitability for the role.
Criminal record checks: If these are required for certain sectors, they can be conducted only through the Ministry of Justice.
Education and reference checks: Can be requested with the applicant’s permission.
Health and medical checks: Employers can ask for information from a doctor where the employee’s health is relevant to performing the role, but they cannot request information about their general health background.
Privacy: Unless they are specifically relevant to the role in question, employers cannot enquire about family or marital status, pregnancy and family planning or other personal information. Employers must also comply with Slovenia’s Personal Data Protection Act as well as the European Union’s General Data Protection Regulation (GDPR).
Required: Immigration compliance.
Basic Facts when Recruiting
Employment legislation applies to all workers, whether Slovenian citizens or those of other nations.
Incoming companies cannot risk ignoring basic requirements of employment law that apply to their employees, including:
At interview, employers should ask questions only strictly relevant to the nature and working conditions of the position and none of a personal nature or that violate the applicant’s privacy, which is protected by Slovenian and European Union laws
Employment contracts must be in writing and signed by both parties
Contracts can be for a definite or indefinite period, full-time or part-time
Fixed-term contracts can be concluded only in specific circumstances and are generally restricted to two years, unless replacing a temporarily absent employee for longer
The contract can specify a probation period
The contract must specify the type of contract and include: full details of both parties; location, job position and role; salary and payment schedule; annual leave; notice periods; applicable collective agreements
Note: Nationals from European Union (EU) countries and those from the European Economic Area (EEA) nations of Iceland, Norway and Liechtenstein, plus Switzerland, have free access to Slovenia’s employment market.
After hiring and onboarding new staff, employers must ensure they comply with their employees’ statutory entitlements. Mandatory standards apply to such as sick leave, working hours, maternity allowances, paid vacations, termination and severance and notice periods. All statutory minimums can be improved by contracts or collective agreements, but not reduced.
The Republic of Slovenia’s impressive advance into the landscape of 21st century economies has seen the nation grow into a tempting and rewarding market for international companies with an eye on global expansion.
The workforce in Slovenia accounts for around half of the population, which is just over two million, but membership of the EU of course opens the door to workers from other member nations, so culturally there will be a high level of diversity that will require flexibility in outlook and attitude.
Slovenia’s economy is an appealing target market for foreign companies and their staff, as well as for job-seeking individuals attracted to its medieval cities, spas, forest, lakes, mountains and other tourist delights. However, adjustments will have to be made for those moving into a different work and cultural environment, and striving to strike a work-life balance – not always easy in a nation recognized for working extra hours.
As a global Professional Employment Organisation (PEO), we aim to be familiar and updated with the business culture in the country we work with and in. Here are a few tips on how to clear those cultural hurdles and business etiquette issues in what can still be a rather formal business environment
The Basics of the Slovenian Work Culture
Language: Slovene is the official language, though in the business sphere English is commonly used while Italian and German are often the second language in areas close to the borders with Italy and Austria. It is safer to check if an interpreter will be needed for business meetings.
Punctuality: Slovenian business people do not appreciate being kept waiting. If you want to be taken seriously … be on time.
Business Relationships: Face-to-face meetings are the way to start relationships, which tend to be formal and structured at the outset before becoming relaxed as the hosts feel trust building up.
Negotiations: State objective at the first meeting, be prepared with documents, stats and presentations … and ready to answer detailed and probing questions. Negotiations may follow a protracted course and in a generally hierarchical business structure it can take time for decisions to filter down from senior management. Be prepared for some ‘give and take’.
Greetings: Direct eye contact, a smile and firm handshake is the way to start, greeting female members of their team first – and finish with handshakes at the end of the meeting. Respect personal space.
Gift Giving: Not expected, but a modest item from the home country, a corporate gift or bottle of wine will be accepted with thanks. Expensive gifts may be misunderstood and will often have to be reported to senior management. And they should be given towards the end of successful negotiations.
Business Cards: Always exchanged at the outset; take the trouble to have one side of the card printed in Slovenian, to be presented face up, and use academic titles where applicable as they will impress.
Dress Code: Slovenians put great store by the social status implied by dressing well and business wear should be smart, conservative and formal for both men and women.
Business Meals: A relaxed way to learn more about each other and discuss the relationship – Slovenians can be as likely to make decisions around the dinner table as in the boardroom.
Labour Law and Slovenian Work Culture
Slovenia’s national minimum wage of €1,074.40 (US$1,050) applies to all full-time employees working at least 36 hours a week.
Usually between one and six months, depending on the nature of work. Can be terminated by either party with seven days’ written notice.
A full working week is 40 hours, not less than 36 and spread over no fewer than four working days. Under the Employment Relations Act (ZDR-1), there must a continuous break of at least 24 hours once a week and 12 hours between two working days. The working day includes a paid lunch break of 30 minutes.
Overtime cannot exceed eight hours a week, 20 per month or 170 hours a year (except in sectors such as healthcare), and employees must be given a written request to work overtime. Overtime rates are determined by collective agreements, generally between 30% and 50% above the normal hourly pay.
Join Our Newsletter
Stay up to date with latest service offerings while receiving tips and strategies for making your next remote hire.