Croatia to amend Labor Law for pay transparency

Croatia is preparing amendments to its Labor Law to implement the European Directive on pay transparency. The changes aim to increase openness regarding employee earnings and facilitate the detection of unjustified pay gaps, particularly between men and women. Under the new rules, if a pay gap for equal work exceeds five percent without objective justification, employers will be required to respond.

Key provisions include prohibiting employers from asking candidates about their previous salary history and preventing companies from banning employees from disclosing their own pay. Labor Minister Alen Ružić stated that these changes are intended to strengthen the position of workers and increase flexibility, such as through extended annual leave.

However, the Croatian Employers Association (HUP) has expressed concerns, with President Irena Weber warning that the new regulations could impose significant administrative, legal, and financial burdens on companies. The association also fears the rules might limit the ability of managers to reward high-performing employees through performance-based pay.