Employers who have struggled for years with a shortage of seasonal labor may find it challenging to hire workers under the “permanent seasonal worker” model this summer, as the legislation governing this has only reached the draft stage. The Ministry of Labor has opened the draft for public discussion until April 20th.

The proposed law aims to mitigate unemployment and address labor shortages during the tourist season by establishing the permanent seasonal worker category. This would allow employees to continue in their roles outside the tourist season and receive compensation and contributions even when not actively working, while helping employers maintain a consistent workforce during slower periods.

As per the draft legislation, compensation would be provided by the state through the Employment Agency, while employers would contribute to pension and disability insurance.

The Ministry of Labor, led by Minister Naida Nišić, indicated back in November that this law would be in place by the end of January 2025 to prepare Montenegro for the upcoming summer tourist season, with seasonal workers ready by March. However, this timeline was not met. In January of this year, the Ministry reiterated its commitment to have the law enacted and ready for implementation by the 2025 tourist season, promising significant improvements in seasonal employment.

“Vijesti” is currently seeking clarification from the Ministry of Labor regarding when the Law on Permanent Seasonal Workers will take effect, whether it will be applicable this summer, and how much compensation for permanent seasonal workers will cost the Employment Service.

The draft law allows employers to hire registered unemployed individuals, pensioners, and students as “permanent seasonal workers” across various sectors, including tourism, hospitality, trade, construction, and agriculture. Employment contracts for these positions will last a minimum of six months and a maximum of eight months.

The Employment Service will provide permanent seasonal workers (excluding pensioners) with compensation at the end of the season, which they will receive until the start of the next season. During the off-season, employers will be responsible for their taxes and contributions to pension and disability insurance.

According to the draft, “permanent seasonal workers” will receive compensation during the off-season amounting to 120% of the calculated value of the coefficient according to general labor regulations, excluding taxes. The Government has set this coefficient at 90 euros, meaning the compensation would total 108 euros. Currently, the average salary in Montenegro is approximately 1,000 euros, with around 190 euros allocated to taxes and contributions.

The draft also states that if a “permanent seasonal worker” refuses to sign a new employment contract for the subsequent season, they must repay the compensation received from the Institute and the contributions to the employer.

It further outlines the circumstances under which a seasonal worker can justifiably decline to sign a new contract for the next season.

“Justifiable reasons for refusing a new employment contract include health issues certified by an authorized physician, treatment, moving abroad, temporary incapacity due to pregnancy, maternity, or parental leave,” the draft specifies.

If an employer fails to extend a new contract to a seasonal worker for the subsequent season, the worker must repay any compensation received from the Institute.

A “permanent seasonal worker” could lose their right to compensation if they become a permanent employee of their employer, find employment elsewhere, lose their capacity to work, have their work found unlawful by an inspection, are absent due to incarceration, lose their residence as per special laws, or reach the age of 67.

The Draft Law also protects permanent seasonal workers by stipulating that if they work for a company for over eight months a year, they will automatically qualify for permanent employment.

Employers cannot initiate an employment relationship for seasonal jobs under this law if they have terminated an employment contract within the last six months due to reduced work demands, in line with general labor regulations.

“After the period of the employment contract for permanent seasonal workers expires, employers must deregister them as employed individuals and subsequently register them for pension and disability insurance for an extended period. Once they have utilized their right to extended pension and disability insurance, they must be registered again as permanent seasonal workers for the upcoming season.”

“The purpose of this law is to ensure legal protection for seasonal workers by introducing the ‘permanent seasonal worker’ institute, enabling consistent employment in seasonal roles and enhancing social security through mandatory registration for pension and disability insurance during non-work periods. This law also obligates employers to offer permanent seasonal employees work for the next season, promoting job security for both the employee and the employer. Additionally, fiscal benefits and extended pension and disability insurance for permanent seasonal workers aim to increase the attractiveness of seasonal employment and diminish the informal economy,” states the explanatory memorandum of the Draft Law.

Penalties for Employers from 200 to 1,000 Euros

The draft law proposes penalties for employers who neglect to register seasonal workers, fail to offer contracts for the following year, or disregard working conditions. Companies could face fines ranging from 500 to 1,000 euros, while responsible employees may incur fines from 200 to 1,000 euros.

Fines for entrepreneurs range from 150 to 1,000 euros, and individuals could face fines from 50 to 500 euros for violations.

“A fine will be imposed if a person neglects to conclude an employment contract for permanent seasonal work, fails to offer a permanent seasonal worker a new contract for the next season, does not register or deregister a permanent seasonal worker from mandatory social insurance, fails to comply with Article 8 regarding permanent seasonal work contracts, or concludes a contract for longer than eight months excluding the days of extended pension and disability insurance,” as stated in the draft.

News