The Chamber of Commerce (PKCG) and the Union of Employers (UPCG) assert that implementing the law concerning permanent seasonal workers this year is unrealistic. Preparations for the upcoming season are underway, and the law would need to have been enacted by early March to be applicable.

Last week, the Ministry of Labor opened the Draft Law for public consultation until April 20th.

“We find it challenging to expect the Law to be enacted for this season, and even if adopted, its application this year will be difficult, as employers are primarily focused on securing labor for the forthcoming summer tourist season,” the MEF told “Vijesti”.

The law aims to reduce unemployment and address labor shortages during the tourist season by creating a category for permanent seasonal workers. This provision would allow employees to keep their positions outside of the tourist season and continue to receive compensation and contributions even when not working. Employers would benefit from a stable workforce throughout the year, including slower periods.

According to the Draft Law, compensation would be managed by the state via the Employment Agency, with employers contributing to pension and disability insurance.

Both PKCG and MEF agree that the requirement to pay pension contributions for “permanent seasonal workers” during non-working months poses an additional burden on employers. PKCG noted to “Vijesti” that without clearly defined state subsidies, this model is unlikely to be feasible. MEF suggests a clear solution: the Employment Service should co-finance 50% of the contribution costs linked to the minimum wage. Both organizations emphasize the necessity for state financial support to ensure the new legal structure is sustainable and beneficial for the economy.

“Vijesti” is awaiting responses from the Ministry of Labor, led by Naida Nišić, regarding when the law will take effect, the Employment Service’s financial obligations, and whether the state can provide employer contribution subsidies.

“UPCG was represented during the drafting of this legal solution. We are aware that labor costs are lower than in many other countries. However, to make the law truly effective, ” we propose that the Employment Service co-finances 50% of the costs designated for contribution payments. It’s crucial to note that these contributions are based on the minimum wage,” stated the MEF.

Their discussions took into account various suggestions, including that agencies acting as employers should be recognized, given their current disadvantage under the Law on Foreigners.

“Furthermore, objections that trade and construction activities are classified as seasonal, and that specific absences and holidays should be treated separately—especially considering that an individual may not work for several months—were acknowledged. The draft proposal has been shared with MEF members, and we look forward to contributing further during the public discussion,” the MEF stated.

The Ministry of Labor and Employment of Montenegro announced a roundtable on November 1, 2024, focused on the Draft Law for Permanent Seasonal Workers, attended by representatives from the Ministry and Montenegrin businesses.

“The roundtable explored ways to refine the proposed legal framework to better reflect the Montenegrin labor market’s unique characteristics. It highlighted the need for inclusive collaboration among all relevant stakeholders to ensure the law’s final text is comprehensive. PKCG was not part of the Working Group that drafted the law, although it previously raised this issue through a project with GIZ. During the roundtable, it was concluded that budget provisions for employer subsidies are essential for addressing labor shortages and maintaining the domestic economy’s competitiveness. If the state fails to clearly define employer subsidies related to the periods when ‘permanent seasonal workers’ are not employed, practical implementation of this institute will be challenging,” emphasized PKCG. They also mentioned that consultations are ongoing within PKCG’s associative board to address concerns from impacted sectors, with a unified opinion expected to be made public soon.

Moreover, businesses at the roundtable insisted that the “permanent seasonal” model must commence by March 1, 2025, to be effective for the coming summer season.

As per the draft law, employers can engage unemployed individuals registered with the Employment Service, pensioners, and students as “permanent seasonal workers” in tourism, hospitality, trade, construction, and agriculture.

An employment contract for permanent seasonal positions will last between six to eight months. The Employment Service will provide permanent seasonal workers (excluding pensioners) with compensation at the end of the season, continuing until the next season. During the non-working period, employers will be responsible for their taxes and contributions toward pension and disability insurance.

Under the Draft Law, the compensation for “permanent seasonal workers” provided by the Institute during the break between seasons would equal 120% of the calculated coefficient value according to general labor regulations, exclusive of taxes. Currently, this coefficient stands at 90 euros, resulting in a compensation of 108 euros. The average salary in Montenegro is approximately 1,000 euros, from which around 190 euros is allocated to taxes and contributions.

PKCG Advocates for the Engagement of Foreign Workers

“Vijesti” inquired with the Chamber of Commerce and Industry of Montenegro regarding any additional proposals for the Draft Law.

The Chamber of Commerce and Industry of Montenegro explained that the initial version of the law discussed at the roundtable included provisions not only for permanent seasonal work but also for occasional and temporary jobs, which can be more suitable for the agriculture and construction sectors.

“During discussions, it was pointed out that occasional and temporary jobs are beneficial since they provide hiring opportunities for individuals not registered with the Employment Service. This also allows for the employment of foreign citizens residing in Montenegro under a visa regime,” stated PKCG, adding that comments from board members will be consolidated and shared during the public hearing, making them available for the public as well.