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Bosnia and Herzegovina
POPULATION
3,12 million inhabitants
CURRENCY
Bosnian Mark (BAM)
GDP
$36,24 billion
MINIMUM MONTHLY WAGE:
1000 BAM
TIME ZONE
UTC +1
In Bosnia and Herzegovina, there are separate administrative entities, the two main ones being the Federation of Bosnia and Herzegovina (FBiH) and Republika Srpska (RS) and a smaller one Brčko district. Specific employment rules are dependent on which region the employee is based in.
Bosnia’s economy suffered about 260 billion USD in material damage during the Bosnia War of 1992 to 1995. The country is generally an upper middle-income country which has greatly recovered from the effects of the war.
Bosnia and Herzegovina have numerous types of minerals found in the country, and some of the top minerals in the country include coal, steel iron ore, zinc, lead, bauxite, and manganese. Mining accounts for 10% of the industrial production in the country. Most employments (more than 50%) are in service/public sectors.
✓ Employment contract
– With a definite period
– With an indefinite period.
When concluding an employment contract, probation period can be arranged, but no longer than 6 months.
✓ Service contract
Probationary periods must be no longer than six months.
In case of natural disasters (fire, earthquake, flood) and a sudden increase in load, as in other similar cases of urgency, the worker is obliged at the request of the employer works longer than full time (overtime) but not more than eight hours per week. Overtime work of minors, pregnant women, adoptive parent of a child up to three years of age, as well as to a single parent is prohibited.
Employees may take a minimum of 20 working days of paid vacation per year. In the Federation of Bosnia and Herzegovina, a further 4 working days of unpaid leave are provided for employees with religious or traditional needs. In Republika Srpska, unpaid leave is permissible for a maximum of 3 working days and is provided for employees with religious or traditional needs.
The duration of the annual leave can also be determined by a collective agreement and can be longer than stated in labor law.
Bosnia has several public holidays, but since the country is divided into three federations (Federation of Bosnia and Herzegovina – FBIH, Republic of Srpska – RS and Brčko District – BČ), there are few differentiates.
01 Jan New Year FBiH / RS / Brčko
02 Jan New Year (Day 2) FBiH / RS / Brčko
07 Jan Orthodox Christmas Day RS / Brčko (Orthodox believers)
09 Jan Day of Republika Srpska RS only
14 Jan Orthodox New Year RS only
01 Mar Independence Day FBiH only
08 Mar Brčko District Establishment Day Brčko only
30 Mar – 31 Mar*
Eid al-Fitr (Ramadan Bayram) FBiH / RS / Brčko (Muslim believers)
03 Apr Catholic Good Friday FBiH (Catholic
believers)
05 Apr Catholic Easter Sunday FBiH (Catholic
believers)
06 Apr Catholic Easter Monday FBiH (Catholic
believers)
10 Apr Orthodox Good Friday RS / Orthodox
believers
12 Apr Orthodox Easter Sunday RS / Orthodox
believers
13 Apr Orthodox Easter Monday RS / Orthodox
believers
01 May Labour Day FBiH / RS / Brčko
02 May Labour Day (Day 2) FBiH / RS / Brčko
09 May Victory Day RS (official public
holiday)
06 Jun – 07 Jun*
Eid al-Adha (Kurban Bayram) FBiH / RS / Brčko (Muslim believers)
21 Nov Dayton Peace Agreement Day RS only
25 Nov Statehood Day FBiH only
In FBIH the first 15 days of temporary incapacity for work shall be provided by the employer from its own funds. From 16th day up to 12 months, monthly compensations are provided by the Health Fund.
The highest amount of salary compensation paid may not exceed 80% of the average salary for the last 6 months before the onset of temporary incapacity for work.
In RS sick pay is a minimum of 70% of the employee’s salary compensation. The first 30 days are paid by the employer and after that it is paid by the state.
The most common benefits for employees in BIH are:
• pension: A pension plan is a mandatory and contributory savings plan for all employed persons in Bosnia and
Herzegovina. The percentage of the pension contribution is prescribed by law is approx. 23% of gross salary.
• personal accident insurance: In Republic of Srpska this benefit is mandatory and in other entities this coverage is voluntary. It typically covers:
o Death due to illness or an accident,
o Permanentdisability,
o Treatment costs due to an accident,
o Hospital stays due to an accident.
• legislative leaves: annual leaves, sick leaves, and other leaves in consent with the employer. In these cases the employer must maintain employee’s work position.
• paid time off: employed woman is entitled to maternity leave of one year continuously.
• unemployment insurance: The amount of cash benefit is 40% of the average net salary paid in Bosnia and Herzegovina in the last three months before the termination of employment.
Income tax – The Federation of Bosnia and Herzegovina (FBiH) and the Republika Srpska (RS) both have a 10% flat rate.
workplace canteens: large employers and the employers outside of the cities often have an onsite cafeteria with discounted food prices.
additional healthcare: Extended healthcare includes outpatient healthcare in the private clinics in Bosnia and Herzegovina. This is usually provided by International employers.
eye exams.
All persons meeting the following conditions are eligible to obtain the unemployment benefit:
✓ they have contributed to the social security system for a period of at least 12 months.
✓ they have certificates from the labor offices attesting that they are unemployed,
✓ they are willing and available for training or retraining and they do not receive any other benefit under this law,
except for partial invalidity payments.
RS:
If the employer is the one terminating the employment contract in RS, the notice period must not be shorter than 30 calendar days.
FBiH:
In FBiH, the notice period must be at least 15 days but not exceed six months. The specific duration of the notice period is determined by the collective agreement and the rulebook. The notice period starts from the date the notice is delivered to either the employee or the employer.
In RS, if the employer initiates the termination of the employment contract, the notice period must not be shorter than 30 calendar days.
On the other hand, in FBiH, the notice period ranges from 15 days to a maximum of six months, and the specific duration is determined by the collective agreement and the rulebook.
Regarding severance pay in RS, it is established through the collective agreement, rulebook, and employment contract. It should amount to at least one-third of the average monthly wages of the last three months for each full year of service with the employer (Art. 141 ZOR), and its value varies based on the length of service of the employee with the employer.
As for severance pay in FBiH, it is also determined by the collective agreement, rulebook, and employment contract, and it cannot be lower than one-third of the employee’s monthly salary in the last three months before retirement, for each year of employment with the employer (Article 100 of the Labor Act).
RS and FBIH: A worker who is dismissed by his employer after two years of uninterrupted work, unless he is dismissed for reasons conditioned by the employee’s conduct, is entitled to severance pay in an amount determined by the length of the previous
uninterrupted employment relationship with that employer.
The severance is determined in the amount of minimal of 1/3 of the average monthly salary earned by the employee in the three months before the termination of the employment contract, for each completed year of work with that employer. Unless otherwise provided by law, collective agreement, rulebook or employment contract, the total amount of severance pay may not exceed six average monthly salaries earned by the employee in the three months before the termination of the employment contract.
Although the economy of Bosnia and Herzegovina has been expanding steadily in the past few years, job creation has not kept up and the country shows one of the most challenging labour market situations in the region. Employment rates remain low (46% for age 15-64, 2019).
With our immigration support solution, we can ensure 100% compliance with the local legislation in terms of expatriates’ employment in Bosnia within a short period of time, to facilitate and speed up expansion of your business to the country.
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