LAWS TO WATCH: Employment Incentive Act

mrsic-212 May 2014, LPJ Croatia Issue 84

The proposed amendments enable employers facing temporary financial difficulties in their business to use aid to save jobs, provided they have paid their taxes and contributions.  In order to receive the aid, employers also have to draw up a business recovery programme and a job preservation programme.

The proposed legislation stipulates that employers can cut the work week by two working days or to last 60% of full time employment.  In such cases, the government will provide a financial compensation to the worker proportionate to the number of work hours that were reduced in the normal work week.  The compensation cannot exceed €400 (i.e. the minimum wage).

The bill also creates the possibility of 12-month long use of the aid within a period of three years.  As part of the restructuring process, employers will be able to apply for state subsidies to finance their workers’ additional education, in order to improve their professional skills.  The subsidies can be provided in the amount of up to 50% of the minimum wage.

Employers will have to retain the subsidised workers for at least half of the period of use of the aid.

Note: The legislation was sent to the Sabor regular procedure (two readings)…

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