Embassies of foreign states in the Republic of Serbia have the right to employ local staff to perform administrative, technical, and auxiliary duties.
The engagement of non-diplomatic staff, i.e. administrative and technical personnel such as a business secretary, financial, translator, typist, archivist, porter, gardener, cook, driver, and other auxiliary staff, is considered the engagement of personnel that is not directly related to the sovereignty of the state or its public relations.
The primary issue that arises in this context is which law should be applied to the employment of local staff in foreign embassies in Serbia.
When determining the applicable law governing the employment relationship between an embassy and local non-diplomatic staff, decisive importance is given to the nature of the work performed by the employee and the place where such work is carried out, namely the fact that these are activities not connected with the exercise of sovereign functions of the sending state and that they are performed on the territory of the Republic of Serbia.
Taking into account the administrative and technical nature of these tasks, the foreign Embassy in Serbia should apply local Serbian labor law, i.e. comply with the minimum prescribed rights, particularly with regard to working hours, rest and leave, overtime work, minimum wage, occupational safety and health, equal pay for the same work or work of equal value, leave due to incapacity for work, prohibition of discrimination, and protection against workplace harassment.
The employment with local staff is established by an employment contract, as is the case with employees of domestic employers. The employment contract may also stipulate other rights and obligations, provided that they are not contrary to the law.
In the opinion of the Ministry of Labor No. 011-00-00938/2005-02 dated 22 September 2005, it was stated that the Labor Law applies to the establishment of employment and the exercise of rights, obligations, and responsibilities of Serbian nationals employed in foreign diplomatic and consular missions, while additional rights and obligations may also be agreed upon in the employment contract.
Serbian nationals employed in foreign diplomatic and consular missions on the territory of the Republic of Serbia are considered insured persons within the meaning of the Law on Pension and Disability Insurance and the Law on Health Insurance, unless otherwise stipulated by an international treaty.
In its opinion No. 413-00-235/2016-04 dated 27 September 2016, the Ministry of Finance stated that a foreign diplomatic or consular mission, as a non-resident of the Republic of Serbia, is not obliged to calculate and pay personal income tax and mandatory social security contributions on salaries paid to locally engaged staff in diplomatic or consular missions.
A foreign diplomatic or consular mission, as a non-resident of the Republic of Serbia, may, if it so chooses, undertake the obligation to pay tax and contributions on the salaries earned by locally engaged staff. In cases where the diplomatic or consular mission elects not to pay taxes and contributions for its employees, the individual employee is obliged to calculate and pay the tax and contributions on their salary.
A natural person who earns salary from an embassy, in such a case, has the obligation to determine and pay taxes and social security contributions through self-assessment; therefore, they are required to calculate and pay the taxes and contributions themselves, bearing in mind that the embassy is not obliged to calculate or pay taxes and contributions on the salary earned by locally engaged staff.
This article is to be considered as exclusively informative, with no intention to provide legal advice. If you should need additional information, please contact us directly.
Author:
Milana Milojević, Senior Associate
milana.milojevic@prlegal.rs; legal@prlegal.rs;