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Slovakia, a land of boundless opportunity for global enterprises seeking extraordinary talent amidst its dynamic milieu of skilled professionals and cost-effective recruitment prospects. When navigating the maze of Slovakia's intricate labor laws and regulations,partnering with a venerable Employer of Record (EOR), ensures compliance with local statutes.
Partnering with a Slovakia EOR/PEO holds paramount advantages. Slovakia's dynamic business landscape brims with cost-effectiveness, offering competitive labor rates, rendering it a haven for corporations seeking expansion.
Unlike many employer-friendly nations, Slovakia’s labor laws focus on protecting the rights of their employees. This can be seen via the standards the country has laid out for employee’s safety and health at the workplace. Additionally, trade unions heavily influence various employment laws. They do this through collective bargaining agreements. CBAs play a role in amending laws pertaining to wages across each sector.
By leveraging Gloroots' Recrew platform, businesses can harness the exceptional potential of Slovakia's talent pool and embark on an exponential growth trajectory.
EORs in Slovakia base their pricing on two common pricing models: fixed pricing and percentage-based pricing.
In a fixed pricing model, the EOR charges a predetermined fixed fee for each employee or service provided. Companies with long-term goals to grow in Slovakia can partner with EORs following fixed pricing. Such a model allows employers to plan their hiring budgets when hiring talent in Slovakia.
Alternatively, the percentage-based pricing allows EORs in Slovakia to charge a percentage of the employee's salary - 3% to 10% - as their fee. The percentage depends on various factors- the number of employees, specific services required, and the duration of the engagement. Such a pricing model suits companies with fluctuating or project-based workforce needs.
Discuss with your EOR partner prior about cost arrangements before expanding in Slovakia.
Key Metrics For Foreign Employers
The table below depicts key indicators from the Global Talent Competitiveness Report for employers wishing to hire from Slovakia.
Source: The Global Talent Competitiveness Index 2022
Growing your team in Slovakia demands meticulous attention to hiring the right talent at the opportune moments for specific roles. Complying with Slovakia's employment regulations necessitates a local legal entity and access to local resources for seamless management of payroll, tax, benefits, and compliance, which can be challenging due to intricate employment laws.
Gloroots' esteemed global Employer of Record (EoR) service eases this burden by handling payroll, tax, benefits, and compliance, empowering you to focus on your paramount priorities: nurturing your employees and fostering exponential company growth.
In Slovakia, misclassification of workers poses significant risks for businesses. Incorrectly classifying employees as independent contractors or freelancers can lead to legal and financial repercussions, including penalties and back pay for unpaid taxes and benefits. Non-compliance with labor laws and regulations may result in fines and damage to a company's reputation.
To mitigate these risks, partnering with a reputable PEO/EOR in Slovakia is crucial.
Employment contract
In Slovakia, employment agreements must be in writing to be legally valid, and both the employee and employer must receive a copy. The contract must include essential terms such as the identification of both parties, commencement date (and employment duration for temporary contracts), workplace, job description, basic salary, and other compensation or benefits (unless specified in a collective agreement), payment details, working hours, total holidays, notice periods for termination, and any probation period if applicable.
By default, employment agreements in Slovakia are considered permanent, but fixed-term contracts are allowed as long as they don't exceed two years. The employment contract must be concluded no later than the employee's first day at work, ensuring clear terms and conditions for the employment relationship.
It’s important for employers to understand the intricacies of these programs before making a hire.
This might sound overwhelming—but it doesn’t have to be. A solution like Gloroots eliminates the barriers for you. With Gloroots’ Employer of Record offering, hiring and managing employees globally is a piece of cake.
Get an overview of what you need to know when hiring in Slovakia.
Working Hour
The typical workweek consists of 40 hours, with 8 hours dedicated to each working day.
Overtime
All work exceeding the standard weekly working hours is considered overtime and is subject to regulation through employment contracts or collective agreements.
Overtime hours, which surpass 40 hours per week, are remunerated at a rate of 125% of the employee's average salary rate. In the case of work performed during night hours, overtime is compensated at 140% of the standard salary rate. Additionally, work completed on Saturdays is rewarded at 150% of the regular salary rate, while overtime on Sundays warrants a compensation rate of 200% of the standard salary rate.
Notably, executives and C-level workers are exempt from overtime regulations.
Public holidays
Public holidays that occur on weekends are typically forfeited or lost.
Maternity leave
If a female employee is going to have a baby, she can take 34 weeks of paid time off from work. But if she's expecting more than one baby, like twins, she can have up to 43 weeks of maternity leave. And if she's a single mom, she can take 37 weeks off with pay. Normally, she can start her maternity leave about six to eight weeks before her baby is due, but it must be at least 14 weeks in total as required by the law.
During this time, the Social Security agency will give her 75% of her daily salary as her maternity pay.
Payroll
The usual payroll frequency is monthly, with employers required to make salary payments at least once every month.
Minimum Wage:
The minimum wage set by the government is 700.00 EUR per month.
Annual leave:
Employees who have worked for their employer for a minimum of 60 days are eligible for at least four weeks of annual leave. However, employees over the age of 33 and those with children are entitled to five weeks of annual leave.
Slovakia's labor law recognizes 15 public holidays, which include Easter Sunday, during which employees are typically not obliged to work. If an employee's job requires work on any of these public holidays, they are entitled to receive double pay for their services.
Sick Pay:
To be eligible for sick leave, the absence must be approved by a medical professional.The employer covers the cost of sick leave for the initial 3 days at 25% of the employee's regular pay rate. From the 4th to the 10th day of sickness, the compensation is at 55% of the employee's standard salary. After the 11th day, sick leave is compensated by the Social Insurance Agency at 55% of the employee's regular salary.
Income Tax
SOCIAL SECURITY AND OTHER TAX
Employment Termination
The process of termination varies depending on the Employment Agreement or Collective Agreement in effect and is determined by the type of contract and the reason for the termination. The employer has the option to terminate an employee with notice for lawful reasons, such as employer liquidation or relocation, employee redundancy, health-related incapacity to work, unsatisfactory performance, or disciplinary infractions.
Notice Period
The length of the notice period is contingent on the employee's length of service as outlined below:
- Workers are entitled to a minimum of 1 month's notice.
- Employees with 1 to 5 years of service must be given 2 months' notice.
- Employees with 5 or more years of service must be given 3 months' notice.
Regarding the probationary period, written notification of termination should be provided at least 3 days prior to the exit date.
Severance pay
Employees are eligible for severance pay under the following circumstances:
1. Company dissolution or relocation, with the employee opting not to relocate.
2. Employee redundancy.
3. Employee's inability to perform the job due to health reasons.
The amount of severance pay depends on the employee's length of service and the reason and type of termination. If an employee is terminated with notice, they are entitled to a minimum of four times their average monthly earnings as severance pay.
Probation period
Operational positions have a probation period of up to 3 months, while Managerial positions have a probation period of up to 6 months.
When expanding your hiring efforts globally, ensuring compliance becomes a crucial challenge. Employers must meticulously navigate through employment laws, payroll procedures, DE&I compliance, GDPR, and other data protection regulations. Setting up infrastructure and initiating the hiring process can be time-consuming, and staying updated on the ever-evolving compliance landscape adds another layer of complexity.
At Gloroots, we are here to simplify these challenges for you. Our comprehensive solutions offer a single window to efficiently manage all your hiring tasks. With our in-house experts, you can rest assured knowing that they will shield you from cross-border employment and payroll compliance risks. They will assist you in generating employment contracts, ensuring timely payments, and providing compliant benefits, while your focus remains on talent screening and selection.
Our commitment is to provide you and your employees with a stress-free global employment experience.
Contact our experts today to kickstart your global hiring campaign in Slovakia.
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