With the recent growth in its qualified labor force, Croatia offers wide-ranging opportunities for companies looking to hire internationally. When you need professionals to complete projects, independent contractors can be an ideal solution. Consider some key guidelines to finding the right contractors for your company’s needs.
Hiring independent contractors in Croatia
If your company wants to hire independent contractors to handle specific tasks for your organization, you need to understand a few principles regarding worker types.
Independent contractor vs. full-time employees
You can distinguish independent contractors from full-time employees by your company’s relationship with each. Contractors are their own separate legal entity, while employees are a part of your company and are under your management. When you work with a contractor, you have a business-to-business relationship with them in exchange for their services.
To avoid penalties and fines, you must not misclassify employees. If you classify an employee as a contractor, your company could be held liable in court. Along with potentially having to pay past-due social security contributions and benefits owed since the contractor’s start date, companies may also have to establish a formal employment relationship and add the contractor to their official payroll.
How to hire independent contractors in Croatia
It’s important to implement the right strategy when hiring independent contractors. Follow these three steps to ensure you find the best fit for your enterprise.
Interviews with full-time employees often involve questions about character traits because these individuals will contribute to company culture. Independent contractor interviews are more similar to business transactions. Focus your questions on skills and experience that can contribute to the project, as interest in personality traits may indicate a more permanent relationship.
Following labor laws is critical to a successful relationship with a contractor. Create a written service agreement so you both have a record of the terms you accepted for your projects. You will want to cover these details:
- Termination and extension conditions
- Services the contractor will provide
- Length of the contract
- Pay rates and arrangements
Extensive training programs can signify employer control over project completion, but you may offer a brief introduction to your company for your contractors. Introduce them to key players in the project, company tools they may use, and essential workflows.
How to pay independent contractors in Croatia
Contractors are not on your employee payroll, so you must choose another reliable method to pay them. If required, you can use a secure money transfer provider to deliver compensation. Create a clause in your written service agreement that outlines how you will provide remuneration and how often.
When you work with an independent contractor, you do not need to cover any social security or benefits contribution on their behalf. However, you should ensure you’ve correctly classified them and have both agreed to terms before finalizing your arrangements.
In most cases, your contract will naturally conclude at the end of a project or after a set duration of time. Under labor laws in Croatia, you have a significant amount of freedom in setting your terms for contract durations with contractors.
At the same time, you should outline your termination process to prevent legal challenges and manage expectations. If you have issues with a contractor’s willingness to complete service terms or meet performance standards, you need to have an agreed-upon method for ending the business relationship.
Turn to Globalization Partners when hiring independent contractors in Croatia
As an extension of Globalization Partners’ Global Employment Platform™, G-P Contractor allows companies to hire anyone, anywhere, for both short- and long-term projects. Whether you’re hiring employees or contractors, we streamline the process with a single solution for your global workforce. Contact us to learn more.
THIS INFORMATION IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). Globalization Partners does not provide legal or tax advice and the information is not tailored to the specific situations of your company or your workforce. Globalization Partners makes no representations or warranties concerning the accuracy, completeness or timeliness of this information. Globalization Partners shall have no liability arising out of, or in connection with, the information, including any loss caused by use of, or reliance on, the information.