On 28th June 2018 National Assembly of Republic of Serbia rendered Law on simplified work engagement on seasonal jobs in certain activities, which will be applicable starting from 8th January 2019. The Law aimed to establish easier system of engagement of seasonal workers through e-portal managed by tax administration, which shall simplify the procedure of registration and deregistration of seasonal workers. In addition, Law is striving to improve position of seasonal workers especially in regard of contributions for mandatory social insurance.
Pursuant to the law, employer is considered to be any legal entity or entrepreneur, which is performing agricultural, forestry or fishing activity. Employer can also be a natural person who is holder of agricultural household as well.
Seasonal worker can be any person that fulfils conditions for employment in line with the Labour law. Seasonal workers can be engaged for a maximal period of 180 days during calendar year, whereas the same seasonal worker cannot be engaged by the same employer for a period longer than 120 working days during one calendar year. Also, personal engaged based on the respective law are entitled to compensation paid by the hour, which cannot be lower than minimal price of work determined in Republic of Serbia. In addition, seasonal workers who works longer than eight hours per day is entitled to break during work in duration of 30 minutes and he/she cannot work longer than 12 hours per day.
In line with the new law, once the seasonal worker is engaged, he/she does not lose the status of unemployed person, i.e. he/she keeps the rights that derive from unemployment. The tax on personal income at the rate of 10% is due on the reimbursement to the seasonal worker. Also, and since seasonal workers are engaged outside of employment, the employer is obliged to perform payment of contributions for pension and disability as well as for health insurance but only in case of injury at work and professional disease. The tax and contributions are calculated on the number of days the worker has been engaged in a month, taking 1/30 of the minimum monthly salary per day as the base for the calculation tax and contributions. This base is used even when the compensation of seasonal worker is determined in higher amount than minimal salary in Republic of Serbia.
The law also stipulates the obligation of the employer to register and deregister seasonal workers within the prescribed deadline depending on the exact moment they commence work, i.e. their engagement is terminated.
In terms of termination of engagement, the employer is entitled terminate the agreement on engagement once the period for which seasonal worker is engaged expires as well as before the agreed period of engagement if the worker does not perform trusted tasks in the requested manner.
Pursuant to the law, in case of non-compliance with the provisions of the Law (such as engagement of the seasonal worker contrary to the law, failure to register seasonal workers or perform payment of compensation, failure to pay tax and contributions, etc.) legal entity could be liable for misdemeanour and is subject to pecuniary fine ranging from RSD 100.000,00 to RSD 1.000.000,00, while the responsible person in legal entity could also be subject to pecuniary fine ranging from RSD 5.000 to RSD 50.000.
By Jelena Aleksic, Partner, Nikola Dordevic, Partner, Marko Mrda, Senior Associate JPM Jankovic Popovic Mitic