Employer of Record Guide in 

Montenegro

Vacation Leave

• Minimum entitlement: 20 working days per year
• Enhanced entitlement: Up to 30 days based on:
  • Years of service
  • Working conditions
  • Educational qualifications
• Scheduling: Must be taken within the calendar year or by June 30 of the following year
• Payout: Unused vacation must be compensated upon termination

Sick Leave

• Duration: Up to 365 days for the same illness
• Compensation:
  • Days 1-30: 70% of average salary (employer pays)
  • Days 31-365: Paid by health insurance fund
• Medical certification: Required from day 1
• Chronic conditions: Extended sick leave provisions apply

Maternity Leave

• Duration: 365 days total
• Breakdown:
  • 28 days before expected birth (mandatory)
  • 337 days after birth
• Compensation: 100% of average salary for first 12 months
• Job protection: Position guaranteed upon return
• Flexibility: Can be shared partially with father after initial period

Parental Leave

• Paternity leave: 15 days (first 7 days mandatory)
• Shared parental leave: Portion of maternity leave can be transferred to father
• Adoption leave: Same entitlements as biological parents
• Compensation: 100% of average salary

Bereavement Leave

• Immediate family: 5 working days
• Extended family: 1-2 days depending on relationship
• Paid leave: Full salary compensation
• Documentation: Death certificate required

Personal & Family Leave

• Marriage leave: 5 working days
• Moving leave: 2 working days
• Blood donation: 1 day per donation
• Emergency family care: Up to 7 days per year (unpaid)

Summary

Termination Types

Termination with Cause:

• Serious breach of work duties
• Criminal conviction affecting work
• Prolonged absence without justification
• No notice period required

Termination without Cause:

• Economic reasons (redundancy)
• Organisational changes
• Employee incapacity
• Requires notice period and potential severance

Notice Period Requirements

Notice periods vary based on length of service:

Payment in Lieu:

• Employers may pay salary instead of working notice
• Must include all benefits and contributions

Severance Pay

Severance is required for redundancy terminations:

Probationary Periods

• Maximum duration: 6 months
• Notice during probation: 7 days
• No severance: Required during probationary period
• Performance evaluation: Must be documented

Final Pay Requirements

• Timeline: Within 8 days of termination
• Components: Final salary, unused vacation, overtime, bonuses
• Deductions: Outstanding loans, equipment costs (if agreed)

Anti-Discrimination & Retaliation Laws

Protected characteristics include:

• Gender, age, race, nationality
• Religion, political beliefs
• Disability, sexual orientation
• Trade union membership
• Pregnancy and family status

Violations can result in reinstatement, compensation, and criminal penalties.

National Holidays

Montenegro observes both secular and religious holidays:

Religious Observances

Montenegro recognises multiple religious traditions:

• Orthodox Christian: Christmas, Easter (majority)
• Catholic: Christmas, Easter
• Islamic: Eid al-Fitr, Eid al-Adha
• Jewish: Yom Kippur, Rosh Hashanah

Employees may choose which religious holidays to observe based on their faith.

Holiday Pay Rules

• Eligibility: All employees regardless of tenure
• Compensation: 100% of regular daily wage
• Working on holidays: 170% of regular rate plus substitute day off
• Consecutive holidays: Each day paid separately

Required Documentation

Employment Contract Must Include:

• Job title and description
• Salary and benefits
• Working hours and location
• Probationary period terms
• Termination clauses

Employee Documents:

• Valid identification (passport/ID card)
• Tax identification number
• Social security registration
• Bank account details
• Educational certificates (if required)
• Work permit (for non-EU citizens)

Language Requirements

• Official language: Montenegrin (Cyrillic and Latin scripts)
• Contract language: Must be in Montenegrin unless employee agrees to another language
• Workplace communication: Montenegrin is standard, but English is common in international companies

Background Checks & References

• Criminal background: Permitted for relevant positions
• Employment verification: Standard practice
• Educational verification: Required for professional roles
• Credit checks: Only for financial positions
• Employee consent: Required for all background checks

Data Protection & Privacy

Montenegro follows EU GDPR principles:

• Lawful basis: Required for processing personal data
• Employee consent: Must be freely given and documented
• Data retention: Limited to employment period plus legal requirements
• Cross-border transfers: Restricted to adequate protection countries

IP Assignment & Confidentiality

• Work-related IP: Automatically belongs to employer
• Inventions: May require separate agreement for compensation
• Confidentiality: Standard clauses enforceable under contract law
• Non-compete: Limited enforceability (max 2 years, specific conditions)

Onboarding Timeline

Worker Classification: Employee vs Contractor

Montenegro has strict criteria for worker classification:

Employees:

• Work under employer direction and control
• Use employer-provided tools and equipment
• Integrated into business operations
• Entitled to social benefits and labour protections

Independent Contractors:

• Operate independently with own business registration
• Provide own tools and bear business risks
• Invoice for services rendered
• Responsible for own taxes and social contributions

Misclassification Risks:

• Back payment of social contributions
• Penalties and interest charges
• Automatic employee status conversion
• Labour inspection sanctions

Unionisation & Collective Agreements

• Union membership: Voluntary, approximately 30% of workforce
• Collective bargaining: Sector-level agreements common
• Strike rights: Protected under constitution
• Works councils: Required in companies with 50+ employees
• Consultation rights: On major business decisions affecting employees

Cultural Norms & DEI Expectations

Workplace Culture:

• Hierarchical but increasingly collaborative
• Relationship-building important for business success
• Work-life balance valued, especially family time
• Direct communication style, but respectful

Diversity & Inclusion:

• Anti-discrimination laws strictly enforced
• Gender equality initiatives supported by government
• Accommodation required for disabilities
• Multi-ethnic society with respect for cultural differences

Remote Work Considerations

Remote work gained acceptance post-COVID:

Legal Framework:

• Employment contracts must specify remote work terms
• Health and safety obligations extend to home offices
• Working time regulations still apply
• Equipment provision negotiable

Practical Considerations:

• Reliable internet infrastructure in urban areas
• Time zone alignment with European business hours
• Tax implications for cross-border remote work
• Social security coordination for EU workers

Employer Responsibilities:

• Provide necessary equipment or allowances
• Ensure data security and confidentiality
• Maintain regular communication and performance management
• Comply with labour inspection requirements

This guide provides general information about employment in Montenegro. Always consult with qualified legal professionals and verify current regulations before making employment decisions.