The government is set to tackle unemployment and address labor shortages during the tourist season by introducing a new category of permanent seasonal workers. This initiative aims to retain employees beyond the peak tourist periods, ensuring they receive salaries and social contributions year-round, even during off-seasons, while providing employers with a reliable workforce throughout the year, including during times of lower business activity.
The Ministry of Labor and Social Welfare, while not revealing specific details, informed “Vijesti” that they are in the process of drafting the Law on Permanent Seasonal Workers. The objective is to facilitate the efficient employment of local labor, establish a comprehensive legal framework, and involve all relevant institutions. A working group, comprising representatives from the government, labor unions, and employers, has been established to draft this legislation.
Under the leadership of Naida Nišić, the ministry has also secured support from the German Organization for International Cooperation (GIZ) to provide expert assistance and ensure effective implementation of the new law. Montenegro, being a significant tourist destination, sees a pressing need for such a regulation to maximize the benefits of its tourism industry.
- The aim is to achieve more efficient employment of local labor during seasonal periods, provide a flexible legal framework, and ensure active participation from all relevant institutions. Considering that the drafting of the Law on Permanent Seasonal Workers is still in its early stages and the first meeting of the working group was held on June 14th, it is currently not possible to provide detailed explanations regarding the specific provisions that will be included in the draft. Public consultations will be organized once the draft is prepared, allowing for broader participation and input.
Croatia’s existing model
Montenegro’s neighboring country, Croatia, has also faced challenges with seasonal labor shortages and introduced the concept of permanent seasonal workers a few years ago. According to the Croatian Employment Service’s website, workers who have been continuously employed for at least six, but no more than nine months with the same employer and are expected to work for at least another six months are eligible for this measure. Employers receive 100% of the cost of extended pension insurance for the first three months, and 50% for the subsequent three months.
- Financial assistance to the worker is provided for up to six months of extended pension insurance, determined based on the calculation of unemployment benefits. For the first 90 days, financial assistance amounts to 60%, and for the remaining period, 30% of the determined base. The maximum amount is 70% for the first period, and 35% for the subsequent period of the average net salary paid to employees in Croatian companies in the previous year. The minimum financial assistance cannot be lower than 50% of the minimum wage, reduced by contributions for mandatory insurance as stipulated by a specific regulation.
In 2023, over 5,000 permanent seasonal workers were registered in Croatia, with 2,340 recorded in the first three months of this year.
The Chamber of Commerce informed “Vijesti” that the introduction of the Law on Permanent Seasonal Workers will be a crucial part of broader reforms, particularly because the local tourism industry remains highly seasonal. Some potential workers are discouraged by the lack of year-round income.
- This measure will motivate the unemployed to retrain and secure permanent seasonal employment with income throughout the year, in line with positive experiences from EU countries. The system provides financial support to seasonal workers during periods when they are not working, ensuring that employers in all sectors have the necessary workforce even during times of reduced business activity due to the seasonal nature of their operations. The measure applies to individuals who have been continuously employed for at least six months with the same employer and who will work for at least one more season (minimum of six months) with that employer.
Market analyses indicate that simplifying the registration process for workers would be a significant boost for both the economy and citizens, encouraging them to fulfill their obligations to the state more promptly. This is especially important for the employment of seasonal workers, a dynamic segment of the labor market compared to regular employment. Therefore, measures to simplify registration processes are essential. Employers consistently face challenges with qualified labor, and there is a need for synchronized efforts to train as many local workers as possible.
Enacting the law on student jobs
- The Ministry of Labor has initiated amendments to the Labor Law, and the Chamber of Commerce has submitted comments and proposals through the prescribed process. It is necessary to enact a Law on Student Jobs, allowing for more flexible engagement of local labor and students as a specific category. There is a need to develop a new Human Resources Development Strategy in the tourism sector, supported by specialized education centers for various profiles.
The Chamber of Commerce also mentioned their collaboration with the Ministry of Tourism on the project “Increasing Employment Opportunities for Seasonal Workers in Southeast Europe,” financed by GIZ. This project proposes a reform model to adapt the legal framework for more flexible seasonal employment and develop an online portal for the registration and deregistration of seasonal workers. The portal is expected to facilitate communication between institutions and applicants, improving the efficiency of the seasonal employment system and increasing both the number of seasonal workers and revenue from taxes and contributions.
- A comparative analysis of seasonal employment in Croatia and Montenegro has been conducted, revealing that implementing some models used in Croatia could accelerate the digitalization of the system in Montenegro (by linking registries and automating data exchange). Introducing an electronic application process for residence and work permits eliminates the need for foreign workers to be physically present in Montenegro before the permit is issued. The analysis shows how basic procedural constraints related to the employment of foreign workers can be improved by adopting solutions implemented in Croatia.
Increasing practice and cooperation
The Chamber of Commerce believes it is necessary to improve the business environment to incentivize employers to hire local workers, making the system more attractive and promoting seasonal work more effectively.
- Long-term improvements in human resources involve enhancing educational programs through increased practical training and dual education systems, better cooperation between employers (hoteliers and restaurateurs) in preparing personnel, stimulating the employment of local labor, promoting tourism-related occupations, and providing scholarships for students in these fields.
