The Employment Of Foreigners Under The New Foreigners Act
Given that particular provisions and solutions of the old Foreigners Act were not conforming to the solutions and standards of the European Union, and that general problems in the implementation of the said Law were noted, a new Foreigners Act has been promulgated and entered into force on January 1st, 2008.
The new Act brought forward many relevant changes. For example, a business permit no longer encompasses a permission of temporary residence, but relates exclusively to a permission to conduct business. Then, there is the equality in rights between foreigners and Croatian citizens, broader categories of foreigners eligible for issuance of work permits above the annual quota, etc. The law also determines the categories of persons who may be issued a special permit, but only in the case when their business contributes to the increase of economic activity in the Republic of Croatia.
A basic prerequisite for a foreigner to be able to work in Croatia is the residence of foreigners. Article 42 of the Foreigners Act distinguishes between three types of residence:
- short-term residence (residence of up to 90 days on the basis of which a foreigner cannot work in the Republic of Croatia);
- temporary residence;
- permanent residence.
Therefore, the precondition for a foreigner to be able to work in Croatia is temporary residence, but in certain cases it can be permanent residence. Pursuant to Article 52 of the Foreigners Act, in order to be granted temporary residence, the foreigner must comply with the following conditions:
- l to have sufficient means of sustenance
- l to have ensured housing
- l to have health insurance
- l not to fall under the obstacles provided in Art. 34 of the Foreigners Act (i.e. 6 cases when a foreigner will be denied entry into the Republic of Croatia)
- l to have justified the purpose of temporary residence
Articles 54 and 55 of the Foreigners Act provide for the reasons of cessation and rescindment of temporary residence. A foreigner's temporary residence will be rescinded if he/she resides in Croatia notwithstanding the purpose for which he/she was granted temporary residence, and if he/she has no means of sustenance during the residence in Croatia.
In order for a foreigner to be granted temporary residence for work purposes, apart from the stated 5 preconditions, a foreigner must possess a work or business permit, except in cases when said permits are not required by law. Grant of temporary residence for work purposes is issued for the period of validity of the work or business permit, but not exceeding the period of one year.
The new Act amended the conditions for obtaining permanent residence, and was thus harmonized with the Council directive no. 2003/109/EC dated December 25th, 2003, concerning the status of third-country nationals who are long term residents. Permanent residence will be granted to a foreigner who has been granted temporary stay for five consecutive years prior to the application for permanent residence.
As opposed to the old Foreigners Act, a marriage of 3 years' duration with a Croatian citizen or a foreigner with permanent residence no longer constitutes grounds for obtaining permanent residence. The main criterion is a lawful and continuous temporary residence (5 years). General conditions for granting permanent residence are also stipulated, the novelty being the knowledge of the Croatian language and the Latin script.
Employment of Foreigners
A foreigner can be employed in the Republic of Croatia on the grounds of a work or business permit and cannot commence work before he/she was granted temporary residence for work purposes
Pursuant to the new law, foreigners were granted the right to judicial protection, and concerning employment conditions, they are guaranteed to have the rights provided in Croatian labour legislation. One of the novelties is that under the new law, volunteering falls within the scope of the definition of work.
In regard of work permits, the new law, by virtue of its Article 118 empowers the Government of the Republic of Croatia to establish the annual quota of work permits. Within these quotas the Government determines:
- the activities and professions in which employment is permitted
- the number of work permits for each activity
For example, for the year 2008, the overall annual quota of work permits for the employment of foreigners in the Republic of Croatia amounts to 8.397 work permits.
The basic principle is that a foreigner can be employed and do only the work for which he/she was granted a work permit, thus only with the employer with which he/she was employed on the grounds of the work permit.
Another novelty is that the law stipulates the circumstances to be considered in deciding on the application for issuance of a work permit, with emphasis on the employer's abidance of regulations in the fields of labour, employment and social security.
The Business Permit
So far, the business permit constituted permission for both work and residence in the Republic of Croatia. Pursuant to the new law, the business permit represents only the permission to conduct business, and not to reside in Croatia. This means that the foreigner will, after having been granted a business permit, have to apply for temporary residence for work purposes.
In addition, there is also the novelty that a business permit may be issued only if the company or trade contributes to the increase of economic activity in the Republic of Croatia. The state administrative office (in the county)-the economy administration decides on this fact.
Also, for persons engaged in free lance professions and service providers for foreign employers, a business permit may be issued if their work is in the interest of the Republic of Croatia. The application for issuance and renewal of the business permit is submitted to the Police administration or police station according to the place of conducting business.
Article 141 stipulates that the provisions of the Act relating to the work of foreigners do not apply to the work of the foreigner who conducts business and implements projects in Croatia on the grounds of international treaties on professional/technical aid, concluded between Croatia and the EU, another state or international organization, and to the work of volunteers engaged in non-profit NGOs and institutions in the Republic of Croatia.
Furthermore, in Art. 1 para. 2 it is stipulated that the provisions thereof relating to residence and work of foreigners (in general) do not apply to members of diplomatic missions, consular offices, United Nations organizations mission members and other UN specialized institutions, members of missions of international organizations accredited in the Republic of Croatia and members of their families, I.e. common household.
Supervision
When it is established, through supervision, that the work of foreigners is contrary to the provisions of the Act, misdemeanor proceedings will be initiated against:
- the foreigner
- the legal or natural person that employed the foreigner or otherwise used his/her work
- the responsible person within the legal person
- the foreigner providing services in the name of a foreign employer
Should the inspector find that the work of the foreigner is contrary to the provisions stipulating the obligation of obtaining a business permit or a certificate by the police administration on registration of work without a business permit, the inspector will, by virtue of an oral decree said on record, ban the legal or natural person from conducting business or providing services for a foreign employer, until the elimination of established shortcomings, but for no less than 30 days. The oral decree is executed by sealing off of business premises, facilities, etc., but a legal or natural person may request temporary unsealing and undertake measures for mitigation of loss in the presence of the inspector.
The residence and work of foreigners in Croatia is regulated not only by the Law concerning foreigners, but also by other rules and regulations. In this vein, it is important to mention the Ordinance on the status and employment of foreigners in the Republic of Croatia, which in more detail deals with the procedures of granting residence, application forms, identification documents for foreigners, registration and signing off of residence and stay, work permits and keeping records on foreigners. Additionally, one must consider the Ordinance on travel documents for foreigners, visas, and on the treatment of foreigners, and the decision on work permit quota for every calendar year because all these rules and regulations are applicable to the employment of foreigners.
