Delays in reporting or deregistering employees with HZMO are no longer harmless oversights. Employers who do not meet deadlines risk monetary fines, as well as being placed on the blacklist, which can seriously damage their reputation. In practice, the greatest risks are borne by accounting services that perform these procedures for their clients, as even the smallest mistake can have serious consequences – emphasize Zagreb lawyers Dora Ljevar and Danijel Pribanić.
In addition to reporting and deregistering with HZMO, an employer can end up on the blacklist if they have not signed an employment contract with the worker – which constitutes undeclared work.
Employers are also placed on the blacklist if they employ foreigners without a valid work permit, do not pay the minimum wage, or do not provide payroll calculations to employees. Employers on the blacklist cannot use foreign labor through temporary employment agencies.
Frequent Violations in Practice
In practice, it has been shown that frequent violations occur where foreigners perform jobs for which they have not been issued a work permit. In deficit occupations, such as pastry chefs, violations have been recorded when inspectors caught a worker working as a waiter or kitchen assistant. Such a violation also leads to the employer being placed on the blacklist.
Currently, 439 employers are on the blacklist from across Croatia, and the number increases almost every ten days. The list includes public and private companies, hospitality providers, nursing homes, gyms, associations, health centers, construction companies, and other employers who have been penalized in misdemeanor proceedings, even when the fines are symbolic.
Employers against whom misdemeanor proceedings are still ongoing are also placed on the blacklist, and if they later prove in court that no violation occurred, they will be removed from the list.
If you have recently committed a violation in the area of undeclared work, it is very likely that you will find yourself on the blacklist. The registration is carried out automatically as soon as the inspector submits the data to the Ministry of Labor – without issuing a decision and without the possibility of appeal.
Consequences of Being Placed on the Blacklist
Being placed on the blacklist leads to the rejection of applications for work permits for new foreign workers, and depending on the interpretation of police administrations, it may also mean the inability to extend existing work permits, as well as the revocation of valid permits for all foreign workers. It does not matter how serious the violation is; what matters is that its existence has been established.
The blacklist is publicly accessible, which can affect the employer’s reputation, relationships with business partners, financing opportunities, and attractiveness to new workers.
Every employer should check compliance with all regulations whose violation can lead to being placed on the blacklist. A list of relevant violations can be read by clicking here.
Employers who hire foreigners – and especially accounting services – should check their organizational, technical, and personnel capacities to ensure that the regulations on reporting and deregistering workers are adhered to without exception.
Provisions on liability for damages due to delayed registrations or deregistrations should be an integral part of the service provision contract and general business terms.
Special Attention When Hiring Foreigners
Employers who hire foreign workers must be sure of what jobs each foreigner is performing. It should be clearly established whether the foreigner is “jumping in” for colleagues in jobs for which they do not have a permit – which is prohibited.
Construction companies must ensure supervision over every person on the construction site, regardless of whether those persons are employed by them or engaged through contractors. If an employer uses the labor of a foreigner who is not properly employed and does not have a work permit, they automatically end up on the blacklist, regardless of whether that foreigner is formally working for another contractor.
This rule also applies to other employers who use contractors, subcontractors, or individuals engaged under a business cooperation agreement.
Until any changes in regulations, an employer who is placed on the blacklist will remain on it for six years. Currently, there is no regular legal remedy against that registration.
