31
Dec 2024
Foreign workers in Croatia will soon be able to receive unemployment benefits due to changes in the Labor Market Act.
The Croatian Parliament has approved updates allowing foreign workers with valid work permits to register as unemployed with the Croatian Employment Service (CES).
These changes aim to include foreign workers in the job market and help tackle Croatia’s labor shortages.
New unemployment rules aim to fill labor shortages in critical industries
Under the updated law, foreign workers who lose their jobs can register with CES to receive unemployment benefits. To qualify, they must hold a valid temporary residence permit, and the benefits will end when the permit expires.
State Secretary Ivan Vidiš stated that the main goal is to help foreign workers find new jobs quickly, not to send them back to their home countries.
“We need these people in professions facing shortages,” he stated during a parliamentary session.
Croatia faces a severe labor shortage, with about 20,000 unfilled jobs needed to sustain economic growth. By keeping foreign workers in the job market, the government aims to ease pressure on key sectors and support annual GDP growth of 1%.
Increased unemployment benefits raise concerns over adequacy
The law increases unemployment benefits from 91 to 180 days and raises the payment rate from 30% to 35% of the base amount.
However, opposition members argued that the average benefit of about €400 is too low given rising living costs. Irena Dragić from the SDP party stressed that the increase offers little relief and called for more comprehensive financial support.
Another change removes the “permanent seasonal worker” category. Seasonal workers can now secure permanent contracts and find additional work during the off-season. This change aims to provide greater job stability for thousands of seasonal employees.
(Image courtesy of wavebreakmedia_micro via Freepik)
Proposed quotas to balance foreign and domestic workforce participation
The amendments have sparked debates about including foreign workers in the unemployment system. Critics are concerned about potential misuse and fear that foreign workers might be prioritized over Croatian nationals.
MP Dalija Orešković expressed worries about low-skilled foreign workers dominating certain industries. In response, Vidiš stressed that many foreign workers are medium- or highly-skilled professionals essential to the economy.
To balance foreign and domestic workers, proposed quotas would require companies in shortage sectors to employ a minimum percentage of Croatian workers. These measures aim to encourage businesses to invest in the local workforce.
Policy changes to improve security for foreign workers and migrants
These changes could affect the experiences of foreign workers, visitors, and migrants in Croatia.
Short- and long-term visitors may feel more secure and view Croatia as a fairer and more supportive destination.
Migrants who lose their jobs will have better chances to find new work without facing immediate deportation.
These reforms also align with the European Travel Information and Authorization System (ETIAS), which aims to simplify mobility within the European Union (EU).
(Image courtesy of senivpetro via Freepik)
Croatia sets example for EU nations tackling labor market challenges
Croatia’s actions could influence other EU countries dealing with similar labor issues. By expanding worker rights, Croatia shows how focused policies can fill labor gaps while supporting vulnerable workers.
Critics, however, stress the need to retain local talent and prevent overdependence on foreign labor. The use of quotas and stricter rules reflects an effort to balance these goals, ensuring migration policies benefit both the economy and local communities.
A step toward inclusive growth
Expanding unemployment benefits to foreign workers is an important step in Croatia’s labor market reforms. The policy helps address labor shortages and shows a commitment to inclusivity and economic stability.
The challenge will be to ensure these policies benefit both foreign and local workers, creating a stronger and fairer labor market.