Information for this page was compiled during December 2023 and January 2024. As Member States are currently transposing the EU minimum wage directive, national legislation can be subject to change. Eurofound intends to update these profiles in early 2025. Users are invited to contact Eurofound if they are aware of changes.
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The most relevant legal sources for the setting of the statutory minimum wage in Croatia is the Minimum Wage Act (‘Zakon o minimalnoj plaći’ No. 118/18, as modified by the Law on Amendments to the Minimum Wage Act, ‘Zakon o izmjenama i dopuni Zakona o minimalnoj plaći’, No. 120/21). It holds a central position: besides representing the legal basis for the minimum wage, it also provides the rules for its determination, adjustment, supervision, and enforcement.
Another source for statutory minimum wage settings in Croatia is the regulation issued by government on a yearly basis (see section on the process of setting the minimum wage for more information) providing the gross amount of the minimum wage. The analysis of these regulations (the most recent one being that of 25 October 2023 - Decree on the Minimum Wage for 2024 (N 125/2023 (26.10.2023.), ‘Uredba o visini minimalne plaće za 2024. Godinu’), read together with the procedure for minimum wage setting (see relevant section) however, points to a formal, rather than regulatory, character (The last one’ full text is the following: ‘Article 1 - The amount of the minimum salary for the period from January 1 to December 31, 2024 is determined in the gross amount of EUR 840.00. Article 2 - This Regulation will be published in the ‘Narodne novine’ [official gazette], and will enter into force on January 1, 2024’).
The process of setting (adjusting) the minimum wage rate, as well as the actors involved and the criteria guiding the adjustment, have changed substantially from its original introduction on 1 July 2008. The 2013 reform represented the one impacting the most on the process, criteria and actors involved. Further modifications occurred in more recent years (2018, 2019 and 2021) have had an overall smallest impact on the conceptual framework of the law, with one very important exception: the creation of the expert Commission was provided by the Act only with its December 2018 new formulation (hence the Miniter’s Decision for its establishment being dated quite recently, in 2019).
The main actors in the determination of the statutory minimum wage in Croatia, in accordance with the procedure set up by the Minimum Wage Act are represented by (arts 6 and 7):
The Minister’s Decision to set up the commission was issued on 11 April 2019 (‘Odluku o osnivanju stručnog povjerenstva za praćenje i analizu kretanja minimalne place’, No. 37/2019), qualifying the Commission as an advisory body of the minister on minimum wage topics (art. II). It is composed of ten members: the head of the internal organizational unit of the ministry (also president of the body), three representatives of the academic community, two employers’ organization representatives, two trade union representatives, and two representatives of the Ministry of Labor and Pension System (art. III). Social partners representation is therefore guaranteed, if not explicitly by the Minimum Wage Act, by the Minister’s Decision (the representatives are designated by themselves too, suggesting a guarantee of their autonomy in this choice) (art. IV).
Originally, the difference in the process of setting the minimum wage was coupled by a difference in actors involved, with the State Bureau of Statistics being originally the only relevant subject, that ‘will publish the amount of the minimum wage in the ‘Narodne novine’ [Official gazette] (Art. 4(4), Zakon o minimalnoj plaći OG 67/08).
Under a procedural point of view, the Minimum Wage Act (arts. 6 and 7) provides that the amount of the minimum wage for each calendar year is determined by the government by regulation, on proposal of the Minister responsible for labour. The nominal gross rate cannot be lower than the amount determined for the previous year. It must be adjusted annually (no later than 31 October) for the following calendar year (art. 5). Originally, the relevant month for the yearly adjustment was June (Art. 4(1), Zakon o minimalnoj plaći OG 67/08). From 2019, October became the month of reference.
The social partners’ role in the process of setting the minimum wage is highlighted in the Minimum Wage Act itself, requiring the minister to propose the amount of the minimum wage to the government after consultation with social partners, which appears, therefore, a compulsory step – despite the form and timing for this consultation is not strictly regulated: the Minimum Wage Act simply provides that the annual consultation with social partners are ‘usually held’ in September and October (i.e. the months immediately preceding the governmental regulation that formally adjusts the rate).
The establishment of an expert Commission is required too, with the specific aim of monitoring and analysing the fluctuations of the minimum wage. Such Commission is established by the Minister for Labour, who, by Decision, determines its composition, its tasks, the working procedures, and the compensation of their members (already discussed in the previous section).
Criteria for the determination of the statutory minimum wage are indicated by the minimum Wage Act. As of its latest version, apart from the legal requirement to be expressed in gross amount and in full-time equivalent (art. 3, suggesting, in turn, that an hourly determination would somehow clash with the legal provision and therefore an albeit implicit propensity towards a monthly rate), and keeping in mind the legal ban on lowering its level (art. 6(1)), the law requires taking into account the following indicators (art. 6(3)):
Moreover, while considering the overall state of the economy, ‘special attention’ to activities with low wages and vulnerable groups of employees is prescribed.
The process of setting and adjusting the minimum wage was greatly impacted by subsequent modifications, in turn impacting the relevant criteria – the changed of which occurred over time is significant. Originally (Zakon o minimalnoj plaći OG 67/08), its increase was strictly ‘linked to the real GDP growth from the previous year, according to the publication of the State Bureau of Statistics’ (Art. 4(1)): while the salary for the first period (July 2008-May 2009) after the entry into force of the Act was provided to be in the measure of 39% of the country’s average monthly gross salary (Art. 4(2)), it was contextually provided that ‘for each subsequent one-year period, [it] will be adjusted to the real GDP growth for the previous year, in such a way that the share of the minimum wage in the average gross salaries of legal entities in the Republic of Croatia realized in the previous year increased by the percentage of real GDP growth in the previous year, according to the publication of the State Bureau of Statistics’ (Art. 4(3)). The current process based on the pattern social partners’ consultation – Minister’s proposal – governmental regulation was introduced in 2013 (Art. 7, Zakon o minimalnoj plaći 2013). The basis for calculating the minimum wage adjustments for the year 2013 was determined, ‘as the product of the monthly poverty risk threshold for a single-person household and the coefficient of the number of members of the average household in the Republic of Croatia, divided by the coefficient of employment, and adjusted for the average change in the index of consumer prices of goods’ (art. 5(4.2)). From 2013 onwards, the governmental Regulation became the formal source through which the minimum wage modification had to be adopted (art. 6, Zakon o minimalnoj plaći 2013). The same 2013 reform, however, linked the mentioned criteria only to the 2013 adjustment, to inaugurate the current pattern based on social partners’ consultation and Minister’s proposal in the same text, from the following yearly revisions (Art. 7, Zakon o minimalnoj plaći 2013).
Despite the universal and compulsory characters of the Croatian statutory minimum wage – suggested, the first, by the formulation of art. 3(1) of the Minimum Wage Act and that the right to the minimum wage belongs to all workers employed in the Republic of Croatia, regardless of the employer's headquarters or registration (art. 4(1)).; and second, by the fact that agreements between the employer and the worker to waive the right to receive the minimum wage is explicitly not permitted (art. 3(8)) – the law itself leaves open a potential for exemptions:
It does so in at least three passages of the Act:
Importantly, exemptions are not only provided by the Minimum Wage Act. Identifying other cases in which minimum wage obligations do not apply (partially or fully) requires a broader analysis of relevant sources of law.
An important exception identified from a source different from the Minimum Wage Act is that referring to interns: the Labour Code (‘Zakon o radu’ OG 93/14, 127/17, 98/19, 151/22, 64/23) provides (art. 59) that if a professional exam or work experience is determined by law or other regulation as a requirement for performing the tasks of a job in a specific profession, the employer may admit a person who has completed education for such a profession to professional training without establishing an employment relationship. This period of professional training is included in the internship and work experience prescribed as a requirement for working in a job in a specific profession and cannot last longer than the duration of the internship. It is explicitly provided that ‘the provisions on employment relationships of this and other laws apply to a person undergoing professional training, except for the provisions on the conclusion of an employment contract, salary, and salary compensation, as well as the termination of the employment contract’. The exclusion of legal provisions related to salary and salary compensation makes this occurrence a relevant exception, considering that the duration of an internship can be up to one year (art. 57).
While the mentioned provisions of the Labour Code allow this exceptions on the condition that the period of professional training is a legal precondition (or a precondition provided by specific regulations) to the performance of a certain profession, the ‘Law on the labour market’ (‘Zakon o tržištu rada’ OG 118/18, 32/20, 18/22, 156/23) extends this possibility also in the absence of this precondition for certain categories of unemployed persons, with an increased duration (in specific circumstances) to up to 24 months (arts. 37-38 and 40(1)). In this circumstance, though, the measure qualifies as active labour market policy and the beneficiary is entitled to public financial aid in the amount of the minimum wage deducted of the contributions for mandatory insurance, proportionally to the days spent on professional training (art. 41(1)).
As for changes occurred overtime, no exception was explicitly provided for collective bargaining in the 2008 Minimum Wage Act: this was provided only from the 2013 reform (Art. 8, Zakon o minimalnoj plaći 2013), while – in the framework of the same reform – the exception for the textile, wood, leather and footwear industries disappeared from the text of the Act.
Sub minima in the strict sense (i.e. lower statutory rates applicable to specific categories of workers) have not been identified. However, in a broader meaning, subminima may include some of the exemptions referred to in the previous section, in particular the possibility for a collective agreement to stipulate a minimum wage lower than the amount prescribed by the minimum wage act however not in an amount less than 95% percent of the statutory minimum wage. Other exemptions identified in the previous section, however, do not qualify as sub-minima.
To note some of the changes occurred overtime, a further exception was envisaged by the 2008 version of the Minimum Wage Act, specifically for the textile, wood processing and leather and footwear industries, for which the share of the minimum wage had to be multiplied by the following coefficients: in the first year, from the date of entry into force of the Act, by 0.94 ; in the second year with 0.96; in the third year with 0.97 and in the fourth year with 0.98 (Art. 5, Zakon o minimalnoj plaći OG 67/08).
The Minimum Wage Act defines the minimum wage as the ‘the lowest monthly gross amount of salary paid to a worker for full-time work’ (art. 3(1)), determined compulsorily (art. 3(3)) in gross amount (sanctions are explicitly provided by the Act itself in case of violation of such requirement (art. 10(1.b)), stemming from a general obligation provided for by the Labour Law (art. 90.b(1)) according to which the salary must be ‘agreed, determined, or prescribed’ in the gross amount).
The minimum rate as described above cannot include bonuses related to overtime work, difficult working conditions, night work, and work on Sundays, holidays, or any other day qualified by law as non-working day (art. 3(4), Minimum Wage Act).
No national regular statutory minimum wage reports exist in Croatia.
Among relevant country resources on minimum wages, recently published academic articles have been identified. In particular, the journal Radno Pravo has published relevant articles; a list of some of the most recently published is provided: