Foreign workers now able to gain unemployment benefits in Croatia

Zagreb

ZAGREB, 12 December 2024 (Hina) – Foreign workers with valid work permits who terminate their employment will now be able to register with the Croatian Employment Service (HZZ) and claim unemployment benefits.

This change arises from amendments to the Labour Market Act, which were discussed in Parliament on Wednesday.

“For the first time, they will be able to register as unemployed. The idea is to offer them jobs immediately, help them find new employment straight away, and ensure they are not forced to return to their home countries by law,” said Ivan Vidiš, State Secretary at the Ministry of Labour, Pension System, Family and Social Policy.

Once their temporary residence permits expire, foreigners will no longer be entitled to unemployment benefits, Vidiš explained while presenting the legislative changes.

“The key aim is to allow these individuals to register, not for the purpose of claiming benefits, but to provide them with new employment opportunities, given the high demand for such workers. Most of them are employed in shortage occupations,” he added.

Vidiš rejected claims by Dalija Orešković (DOSIP) that foreign workers are predominantly low-skilled, stating that most are medium-skilled, with some being highly skilled.

He also responded to criticism from Miro Bulj (Most), who argued that unrestricted importation of foreign labour is occurring while young, educated Croatians are emigrating. Vidiš pointed out that a one percentage point increase in GDP equates to at least 20,000 new jobs.

Opposition: Unemployment benefit increases remain insufficient

Vidiš announced that the Foreigners Act would introduce a mandatory proportion of Croatian citizens among employees in companies operating in sectors facing worker shortages.

Amendments to the Labour Market Act will also increase unemployment benefits from 30% to 35% of the base amount during the period from the 91st to the 180th day of unemployment.

“We decided to improve the adequacy of benefits. Even though unemployment is at a record low, we must consider the financial position of unemployed individuals,” the State Secretary emphasised.

The benefit increase, he added, is designed to encourage unemployed people to register and engage in structured job-seeking, helping them find employment more quickly in the long term.

However, Irena Dragić (SDP) argued that increasing benefits from 30% to 35% of the base amount would not significantly impact the lives of unemployed individuals. “The average benefit is around €400, which is insufficient given soaring prices,” she observed.

Jelena Miloš (Možemo!) criticised the system for allowing former minister Vili Beroš to claim a six-plus-six-month benefit despite being dismissed under serious corruption allegations, while those who lose their jobs through mutual agreement, often under employer pressure, are ineligible for unemployment benefits.

New provisions for young workers and apprentices

A new provision in the law will allow young workers to qualify for benefits after six months of employment within a two-year period. Additionally, the hourly wage for apprentices will be aligned with that of students.

Discontinuation of the “Permanent Seasonal Worker” Scheme

Unemployed individuals who enrol in education programmes will be eligible for unemployment benefits if these are more favourable than the allowances provided for participating in educational programmes offered by the Croatian Employment Service.

Additionally, unemployment benefits will no longer be reduced by the amount of the inclusive allowance.

The government has decided to discontinue the “permanent seasonal worker” measure, as explained by Vidiš. He emphasised that with record-low unemployment, it is crucial to maximise the use of the new provision allowing permanent seasonal workers to sign open-ended contracts and take on other roles outside the season.

In October 2024, the unemployment register listed 86,000 people, with 20% of them qualifying for unemployment benefits. This indicates that these individuals had worked for at least nine months in the past two years, Vidiš noted.

Opposition Calls for Further Reforms

During the debate, opposition members highlighted several issues, including the mismatch between education and labour market needs. They proposed extending benefits for those pursuing self-employment for an additional year and stressed the importance of continuous retraining and lifelong learning.