You've found a developer that can transform your business. Awesome. However, they're located in Bosnia. Do you have someone on your team well-versed in Bosnian labor law?
For employers looking to hire talent in Bosnia and Herzegovina, it may seem daunting. To avoid the headache of setting up local entities just to hire this candidate, you may want to consider working with an Employer of Record (EOR). Working with an EOR platform, like Borderless AI, streamlines the hiring process.
This article will guide you through the benefits of using an EOR to hire employees in Bosnia and Herzegovina.
Why Hire Talent from Bosnia and Herzegovina?
Bosnia and Herzegovina is a hotspot for hiring remote employees for several reasons. The country has a highly educated population and high computer literacy; this alone attracts foreign employers to hire from the Balkan state.
Bosnia and Herzegovina is also in a strategic location; it’s placed in an ideal time zone, so employees have synchronicity with a large portion of Central and Eastern Europe. While managing a team across different time zones is possible, many prefer to be working in synchronicity. The country also has a large English-speaking population, so for European and North American employers, it’s relatively easy to connect with them.
Cost is also a significant factor. Salaries in Bosnia and Herzegovina are lower than in the rest of Europe and North America. This provides the chance for organizations to reduce costs while still hiring skilled employees.
But you know all of this because you've already secured a candidate. Let's talk about how you can make this hire happen.
How to Legally Hire from Bosnia and Herzegovina
To hire talent from Bosnia and Herzegovina, there are a few ways you can go about it. For one, you can bring on your new developer as an independent contractor; however, these come with risks of misclassification, don't grant the new hire employee status, and make safeguarding IP risky.
A longer (and more costly) route involves setting up a physical business entity. Doing this is time-consuming and complex, especially when it comes to complying with local labor laws and regulations. This is especially challenging in Bosnia and Herzegovina, where there are separate administrative entities — the Federation of Bosnia and Herzegovina (FBiH) and Republika Srpska (RS). If you were to set up a legal entity on your own, doing so comes with significant challenges.
A third popular and stress-free route involves using an Employer of Record (EOR) platform. An EOR is a third-party organization that acts as a broker for hiring talent outside the country where the employers operate. Using an EOR to hire employees in Bosnia and Herzegovina makes the process seamless and compliant.
What Does an Employer of Record Do?
Using an EOR will significantly minimize the paperwork and processes associated with hiring employees in Bosnia and Herzegovina. An EOR provides an efficient and compliant way for organizations looking to hire talent from abroad. On your behalf, it manages the intricacies of local labor laws like payroll, benefits administration, and adhering to tax obligations.
Contracts and Documentation
Each country has its requirements for what must be included in an employment contract, and Bosnia and Herzegovina is no different. Because Bosnia and Herzegovina has two separate labor law entities — FBiH and RS — there are different requirements for contracts such as probation periods and notice periods.
For employers worrying about staying compliant with these contract requirements in Bosnia and Herzegovina, an EOR will give you peace of mind. Because the EOR handles the contracts and necessary documentation, you're able to focus on connecting with your new developer.
Insurance and Benefits
Using an EOR to hire employees in Bosnia and Herzegovina will guarantee that employees have mandated insurance and benefits. This includes healthcare and unemployment benefits. An EOR will also recommend supplemental benefits to ensure your compensation package is competitive for the market.
Paid Time Off, Leave, and Public Holidays
For employees in Bosnia and Herzegovina, the standard paid time off allowance is 20 days. In FBiH, employees are allowed no more than 30 days.
Employees are entitled to parental leave, but again, it varies by region. Sick leave, however, is standard across the country, in which employees are entitled to 42 days.
However, like payroll and other HR-related matters, you don't need to memorize and learn these regulations, your EOR has expertise in local labor law and will ensure your new employee get what their mandated time off.
Tax Obligations
Tax rates are different across regions and administrative entities. Social security contributions are different in FBiH and RS, as well as in the Brčko District (BD). Contributions go towards pension, health insurance, unemployment insurance, and child protection, however, the rates depend on the region. Rather than try to tackle differing tax rates and regional nuances in Bosnia and Herzegovina, use an EOR. EORs handle all logistics and ensure that taxes are filed in compliance with local regulations.
Payroll
Your EOR will ensure your employee in Bosnia and Herzegovina is paid compliantly. This includes meeting minimum wage standards based on the region of the employee, overtime pay, and any bonuses. In Bosnia and Herzegovina, overtime cannot exceed more than eight hours per week, and the standard working week is 40 hours. Additionally, it is customary, not mandatory, to give employees a 13th and 14th-month bonus.
Employer Responsibilities
While the EOR takes care of all legal and HR procedures, like contracts, payroll, and taxes, the employer also has some responsibilities. You're responsible for sourcing the candidate and the interviewing process. Onboarding your new hire to their role, setting expectations, and introducing them to the team also falls on your shoulders. The EOR handles the HR elements of onboarding like checking identification, signing up for benefits, etc.
You should also be aware of the working culture in Bosnia and Herzegovina. This will create a positive and welcoming work environment that encourages communication and inclusivity, ultimately helping with employee performance and retention.
Advantages of Using an Employer of Record
Setting up an entity in a foreign country comes with a lot of stress so we recommend using an EOR to hire in Bosnia and Herzegovina. An EOR is already set up to hire employees abroad and will save you time, reduce costs, and minimize compliance risks.
Since Bosnia and Herzegovina has to adhere to all European Union legislation and regulations, using an EOR that has expertise in the area is hugely beneficial.
Choosing the Right Employer of Record
When it comes to choosing the right EOR, employers must do their due diligence on the right partner. Employers should consider various factors, such as the following:
- Local knowledge and expertise: When working with an EOR in Bosnia and Herzegovina, you want to make sure they have local knowledge of employment laws and experience in the country. Working with an EOR with a positive reputation in Bosnia and Herzegovina ensures compliance.
- Range of services: Keep in mind the range of services offered by EORs and see if it’s right for you. Look for different services related to hiring staff, like administering benefits, filing taxes, compliance and governance, and legal support.
- Data security: In a remote work environment, protecting intellectual property is vital. When choosing an EOR vendor, make sure they have a specific agreement that outlines the ways they aim to keep sensitive information secure.
Borderless AI — The EOR For You
If you’re looking to hire an employee in Bosnia and Herzegovina, going through an EOR is the right solution. With Borderless AI, we make the hiring process a breeze. With no upfront costs, 24/7 customer service, and our AI-powered platform, hiring your new employee will be seamless
Book a demo to see how we can help you streamline the hiring process and retain your new employees from Bosnia and Herzegovina.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
