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 Minister’s Decision for its establishment being dated quite recently, in 2019).

By the Amendments to the Minimum Wage Act (Zakon o izmjenama i dopunama Zakona o minimalnoj plaći - OG 152/24), the provisions of the Directive (EU) 2022/2041 of the European Parliament and of the Council of 19 October 2022 on adequate minimum wages in the European Union (OJ L 275/33, 25 October 2022) are transposed and implemented in the Croatian legislature.

• Minimum Wage Act (‘Zakon o minimalnoj plaćiopens in new tab No. 118/18, as modified by the Law on Amendments to the Minimum Wage Act, ‘Zakon o izmjenama i dopuni Zakona o minimalnoj plaćiopens in new tab’opens in new tab, No. 120/21)

• The Act on the Amendments to the Minimum Wage (OG 152/24 (24 December 2014), ‘Zakon o izmjenama i dopunama Zakona o minimalnoj plaćiopens in new tab’opens in new tab

• Unoffical Consolidated Text of the Act on the Minimum Wage (Neslužbeni pročišćeni tekst Zakona o minimalnoj plaćiopens in new tab)

• The Amendment to the Minimum Wage Act (OG 152/24), ‘Zakon o izmjenama i dopunama zakona o minimalnoj plaćiopens in new tab’

Minimum wage Decrees:

• Decree on the Minimum Wage for 2024 (N 125/2023 (26 October 2023.), ‘Uredba o visini minimalne plaće za 2024. godinuopens in new tab’

• Decree on the Minimum Wage for 2025 (OG 124/2024 (24 October 2024.), ‘Uredba o visini minimalne plaće za 2025. godinu’), stipulates that the gross amount of minimum wage in Croatia for 2025 is €970.

• Decree on the Minimum Wage for 2026 (OG 132/2025 (24 October 2025.), ‘Uredba o visini minimalne plaće za 2026. godinuopens in new tab’), stipulates that the gross amount of minimum wage in Croatia for 2026 is €1050

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):

1. The government, which sets, on a yearly basis, the level of minimum wage by regulation.

2. The Minister responsible for Labour, who is in charge of the proposal of the amount of the minimum wage and of the constitution and working procedures of the expert Commission (mentioned below).

3. Social partners, who participate in the minimum wage setting and adjustments by means of compulsory consultations (to be held before the Minister’s proposals) and participation in the expert Commission (presented here below).

4. The expert Commission set up by the Minister, with responsibilities in terms of monitoring and analysis. The composition of the Commission is, according to the Minimum Wage Act, decided by the Minister, without the law explicitly requiring social partners’ representation.

The Minister’s Decision to set up the commission was issued on 11 April 2019 (‘Odluka o osnivanju stručnog povjerenstva za praćenje i analizu kretanja minimalne plaće’, 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 Labour 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).

• Minister’s Decision to set up the commission was issued on 11 April 2019 (‘Odluka o osnivanju stručnog povjerenstva za praćenje i analizu kretanja minimalne plaće’, OG No. 37/2019opens in new tab)

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, as proposed 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). Since 2019, October has become 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 not being 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).

The amended Minimum Wage Act of 2024 prescribes the obligation of the Ministry responsible for labour to submit every second year, before 1 October of the reporting year, to the European Commission available statistical data or information on the rate and development of the scope of collective bargaining and the level of the statutory minimum wage and the share of workers covered by it.

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)), which was amended in 2024 (OG 152/24). Amended criteria are marked with an asterisk*

• The increase in the share of the minimum wage in the average gross salary paid in legal entities from January to July of the current year.

• The level of inflation or changes in the purchasing power of the minimum wage*.

• Wage developments.

• Unemployment and employment trends.

• Demographic trends.

• Developments of productivity*

• The overall state of the economy.

Moreover, while considering the overall state of the economy, ‘special attention’ to activities with low wages and vulnerable groups of employees is prescribed. No further details on the operationalisation of these criteria are provided in the text.

The process of setting and adjusting the minimum wage was greatly impacted by modifications over time, in turn impacting the relevant criteria – the changes 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).

In Croatia there has been no official specific adequacy assessment of the minimum wage, nor is any information on indicative reference values available in the minimum wage legislation. However, for the setting of the 2026 minimum wage the Expert Committee for Monitoring and Analysis of Minimum Wage Trends took into account, among other things, the value of 54% of gross average wages reached in 2024 and:

“that, in accordance with Directive (EU) 2022/2041 of the European Parliament and of the Council of 19 October 2022 on adequate minimum wages in the European Union, the indicative value of the minimum wage that is considered adequate is either 50% of the average gross wage or 60% of the median gross wage” (Ministarstvo rada, mirovinskoga sustava, obitelji i socijalne politike, 2025).

Despite the universal and compulsory character of the Croatian statutory minimum wage - suggested, first, by the formulation of Article 3(1) of the Minimum Wage Act (OG 118/18opens in new tab, 120/21opens in new tab, and 152/24opens in new tab), according to which 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 explicit prohibition of agreements waiving the right to the minimum wage (Art. 3(8)) - the Act nevertheless leaves the possibility for exemptions.

The Minimum Wage Act itself provides for exemptions in at least two respects. First, it provides that, exceptionally, the minimum wage may be understood as the lowest amount of monthly gross salary corresponding to the complexity of work for full-time employment as stipulated in a collective agreement whose application has been extended in accordance with general labour legislation (Art. 3(2)). Second, the Act does not apply to a worker who is the sole employee of the employer and simultaneously a member of management, executive director, manager of a cooperative, liquidator or a holder of a similar function under special regulations (Art. 4(2)).

Importantly, the Minimum Wage Act no longer allows collective agreements to stipulate a minimum wage lower than the statutory minimum wage. Earlier legislation had contained such a possibility, but this has since been abolished. Specifically, the Amendment to the Minimum Wage Act (OG 152/24), which entered into force on 1 January 2025, repealed Article 8 of the Act. That provision had previously allowed collective agreements to set a minimum wage lower than the statutory minimum, provided that it was not less than 95% of the amount prescribed by a Government regulation. Its repeal means that collective bargaining can no longer serve as a basis for lowering the statutory minimum wage. This change confirms the mandatory ius cogens nature of the minimum wage in Croatian law.

Exemptions from minimum wage obligations are not provided exclusively by the Minimum Wage Act. Identifying additional cases in which minimum wage obligations do not apply, either partially or fully, requires a broader analysis of other relevant sources of labour law.

An important exception derives from the Labour Act ('Zakon o raduopens in new tab', OG 93/14, 127/17, 98/19, 151/22, 64/23) and concerns interns. Article 59 provides that, where passing a professional exam or acquiring work experience is prescribed by law or other regulation as a requirement for performing tasks in a specific profession, an employer may admit a person who has completed the relevant education to professional training without establishing an employment relationship. This period of professional training is counted towards the internship or work experience required for that profession and may not exceed the prescribed duration. The Labour Act explicitly states that the provisions on employment relationships apply to such persons except for the provisions on the conclusion of an employment contract, salary and salary compensation, and termination of employment. The exclusion of salary-related provisions renders this arrangement a relevant exception to minimum wage protection, particularly given that the duration of an internship may last up to one year (Art. 57).

While these provisions of the Labour Act allow for such an exception only where professional training is a legal precondition for practising a profession, the Act on the Labour Market ('Zakon o tržištu radaopens in new tab'), OG 118/18, 32/20, 18/22, 156/23) extends this possibility to certain categories of unemployed persons even in the absence of such a precondition. In these cases, the duration of professional training may, under specific circumstances, extend up to 24 months (Arts. 37–38 and 40(1)). However, this measure qualifies as an active labour market policy instrument, and the beneficiary is entitled to public financial support amounting to the minimum wage reduced by mandatory insurance contributions, proportionally to the days spent in professional training (Art. 41(1)).

Variations of statutory minimum wages in the strict sense - namely, lower statutory minimum rates applicable to specific categories of workers - have not been identified in Croatian law. In a broader sense, earlier mechanisms allowing collective agreements to stipulate wages below the statutory minimum could have been characterised as sub-minima. However, following the repeal of Article 8 of the Minimum Wage Act, such arrangements are no longer legally permissible. Today, collective agreements may stipulate wages that are more favourable to workers but may not provide for wages lower than the statutory minimum wage. Any such provision would be null and void, and the statutory minimum wage would apply automatically.

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 Act (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).

The Expert Committee for Monitoring and Analysis of Minimum Wage Trends issues a recommendation concerning the amount of the minimum wage for the subsequent year; this recommendation is not publicly disclosed.

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:

• Ministarstvo rada, mirovinskoga sustava, obitelji i socijalne politike (2025),Prijedlog uredbe o visini minimalne plaće za 2026. godinuopens in new tab, [The Proposal for the Decree on the Amount of the Minimum Wage for 2026], Ministarstvo rada, mirovinskoga sustava, obitelji i socijalne politike, Zagreb.

• Serdarušić, H. (2025), Minimalna plaća u BiH – što se događa kad se ignorira produktivnost?opens in new tab 23 April 2025.

• Iljazović, B. (2024), Minimalna plaća u 2024. godini, Radno Pravo, issue 02/24opens in new tab.

• Bejaković, P. (2024), Značenje kolektivnog pregovaranja i minimalne plaće u ublažavanju dohodovne nejednakosti u Hrvatskoj, Radno Pravo, issue 01/24opens in new tab.

• Iljazović, B. (2023), Direktiva EU o primjerenim minimalnim plaćama u Europskoj Uniji, Radno Pravo, issue 02/23opens in new tab.

• Subotić, V. (2021), Najnovije promjene u uređenju minimalne plaće, Radno Pravo, issue 11/21opens in new tab.

• Klišanin, J. (2019), Novi Zakon o minimalnoj plaći i Uredba o visini minimalne plaće, Radno Pravo, issue 01/2019opens in new tab.

• Subotić, V. (2020), Uređenje minimalne plaće u Republici Hrvatskoj, Radno Pravo, issue 11/20opens in new tab.

• Subotić, V. (2021), Prijedlog Direktive o primjerenim minimalnim plaćama u Europskoj uniji, Radno Pravo, issue 02/21opens in new tab.

• Bejaković, P. (2020), Zakonsko određivanje i obilježja minimalne plaće u EU, Radno Pravo, issue 01/20opens in new tab.