Labor Law - changes in 2023

Amendments to the Labor Act bring a number of novelties in the regulation of individual rights and obligations from employment relationships. Among other things, the concept of salary is more clearly defined, prevents unjustified consecutive conclusion of fixed-term employment contracts, and increases the hourly rate for work on Sundays to 50 percent above the regular hourly rate.

Labor Law - new changes

What changes in the new law? The changes are numerous, and we single out the following:

• the issue of concluding employment contracts for a fixed period of time is regulated in a different way by provisions that prescribe greater legal restrictions on the possibility of concluding such contracts,
• working at a separate workplace, such as working from the employee's home or remotely, is regulated more fully, in such a way that the rights and obligations of the employer and the employee are regulated in more detail,
• changes in the arrangement of paid and unpaid leave and the new provision that regulates the right of workers to be absent from work due to urgent reasons, enable more flexible conditions for harmonizing work and family obligations,
• the biggest innovation in the arrangement of additional work of workers is the fact that for the performance of additional (or so-called supplementary) work, the worker will no longer need the consent of the parent employer, but in certain cases the parent employer will be able to object to the additional work of the worker,
• the legal provisions on the work of seconded workers through temporary employment agencies are more fully regulated in such a way that agencies will be able to enter into employment contracts with their workers for a fixed or indefinite period, and agencies will not have a limit on concluding the first employment contract for a maximum of 3 years,
• amendment of the legal provision according to which the worker does not exercise the right to severance pay, if the employer cancels his employment contract, and the worker has acquired the conditions for an old-age pension.

The employer will have to pay overheads for working from home

Law on undeclared work

Undeclared work or better known as "undocumented work" has been present in almost all industries for a long time, but there was no regulatory framework that would systematically represent a mechanism to combat such a way of working. On January 1, 2023, the Law on Undeclared Work entered into force. It defines undeclared work, regulates measures to combat it, activities aimed at encouraging the reporting of work, and responsibility for violations of the Act. It is important for employers to be familiar with the process of transitioning workers from undeclared to registered work and the procedures of the inspection and competent authorities when determining the existence of undeclared work, because the Law prescribes very high penalties for employers who do not register their workers and repeatedly violate the obligations of the Law, and it is ignored and public publication of the list of employers where undeclared work has been determined.

Shops are closed on Sundays

According to the new law, most shops should be closed on Sundays, and due to seasonal reasons, 16 working Sundays are allowed at the employer's choice. As for the regulation of working hours in the shop, the amendments limit work on Sundays and holidays in such a way that weekly working hours are limited to a maximum fund of 90 hours, and the shopkeeper can distribute them in periods from Monday to Saturday.

The work restriction does not apply to stores that are part of certain business entities. Thus, on Sundays, shops will be able to work within transport units (roundabouts, ports, airplanes, ferries), gas stations, hospitals, hotels, areas of cultural and religious institutions, museums, nautical marinas, camps, family farms and protected nature areas. The restriction does not affect market traders who sell their own agricultural products, occasional sales at fairs and public events, vending machines and distance sales.

News in workers' nutrition

As of January 1, 2023, the method of determining the non-taxable allowance for employee nutrition has been changed. Tax-free amounts will no longer be determined on an annual basis, but on a monthly basis and will amount to HRK 500.00 per month in cash, or HRK 1,000.00 per month if meals are provided on the basis of authentic documents.

This makes it possible to change the method of reimbursement of food expenses for the worker even within the year. Therefore, for example, a worker who changed employers during the year, while receiving food allowance based on authentic documentation from the former employer, can receive a flat-rate monetary allowance in the non-taxable monthly amount of HRK 500.00 from the new employer. The same applies in the event of a change in the method of reimbursement of food expenses with the same employer. In doing so, it will be possible to make a tax-free payment all at once, that is, to enable receipt for several missed months of the same tax period, i.e. it will be possible to pay for months in the past, but no longer in advance.