Foreign worker recruitment agencies: when are you the employer, and when are you only an intermediary?
In practice, the term “agency for the employment of foreigners” often conflates two different models:
1. The agency employs the worker for the purpose of assigning/seconding them to a user undertaking (temporary-work agency / labour leasing).
2. The agency provides recruitment/intermediation (searching, screening and matching employer and worker), but the employment contract is concluded between the client–employer and the worker.
The difference is not merely terminological: it determines what records you must keep, what contracts you enter into, what you may charge, and who must meet the requirements in residence and work permit procedures.
When the agency hires directly (temporary-work agency)
If the agency hires the worker and then assigns them to a user undertaking, it is a temporary-work agency within the meaning of the Labour Act (Zakon o radu). Such activities may be performed only if the agency is registered and entered in the register maintained by the ministry competent for labour; they must not be commenced prior to registration.
The agency must not charge the worker any fee for the assignment, nor may it charge a fee if the worker later concludes an employment contract directly with the user undertaking.
Contract with the user undertaking (assignment)
In the relationship with the user undertaking, the key document is a written assignment agreement, with mandatory content prescribed by law (including: the number of workers, the period of assignment, the place of work, the tasks, and elements relevant for payroll calculation).
The law also sets out situations in which an assignment agreement must not be concluded, including:
– replacement of workers at the user undertaking where a strike is ongoing; and
– certain cases following collective redundancies or business-related dismissals at the user undertaking within the previous six months.
Third-country nationals (permits and requirements)
When employing third-country nationals (e.g., from India, Nepal, the Philippines or Bangladesh), you typically fall under the Foreigners Act regime (Zakon o strancima): the permit is issued on the basis of a positive opinion of the Croatian Employment Service (HZZ), together with prescribed attachments (e.g., the employment contract, evidence of meeting labour market test requirements, and—where relevant—evidence of accommodation).
The employment contract must not contain discriminatory provisions, and the wage must not be lower than the wage for comparable positions in Croatia.
As a rule, the labour market test is mandatory before submitting the application; HZZ notifies the result within 15 days, and after a positive outcome the permit application may be filed within 90 days from the notification of the test result.
The most common “filters” for a positive HZZ opinion are concrete and measurable, for example:
– at least one employed worker who is a Croatian / EU / EEA or Swiss national, continuously for one year, on an open-ended and full-time basis;
– the prescribed turnover in the last six months (legal entity at least EUR 10,000 per month; natural person EUR 15,000 in the observed period);
– public dues and obligations duly settled;
– no status as an employer found to have engaged in undeclared work.
In procedures for third-country nationals, HZZ also considers two additional criteria:
– The 16% / 8% ratio: at the time of filing the application, the number of full-time Croatian/EU/EEA/Swiss employees must be at least 16% of the number of employed third-country nationals (or 8% if the occupation is on the HZZ shortage list). Practically, 1 domestic full-time employee “covers” about 6 foreign workers (or about 12 for shortage occupations).
– The 50 / 250 application cap: there is also an upper limit on the number of applications an employer may submit—if it has up to 50 domestic (Croatian/EU/EEA/Swiss) workers → max 50 applications; if it has 51–250 domestic workers → max 250 applications; this applies until the 16%/8% ratio becomes the relevant constraint.
If the employer is a temporary-work agency, the conditions are checked for both the agency and the user undertaking (because the work is actually performed at the user undertaking), so the user undertaking must also satisfy the relevant requirements for a positive opinion.
When the agency only intermediates (employment mediation)
If the agency does not employ the worker, but provides employment mediation services (sourcing and selecting candidates, connecting them with an employer), the Ordinance on carrying out activities related to employment applies (Pravilnik o obavljanju djelatnosti u svezi sa zapošljavanjem).
Before commencing operations, legal and natural persons must be entered in the register kept by the ministry competent for labour. The application is submitted in writing or electronically with proof of registration, and the ministry issues a certificate with the registration number. The registration number must be stated in legal transactions, business documents, and on every letter and advertisement.
The agency must determine its terms of business in advance and make them known to employers and jobseekers who request services.
Charging fees
Charging is strictly regulated:
– services for jobseekers are provided free of charge;
– fees may be charged only to the employer;
– prices must be fixed amounts and must not be a percentage of the worker’s agreed wage.
The Ordinance also prescribes record-keeping and reporting obligations to the ministry: records are kept on jobseekers, employers and workers, and data are submitted semi-annually on the prescribed form in electronic format.
Third-country nationals (in the case of mediation) For third-country nationals, mediation does not change the fact that the permit procedure and requirements (labour market test, positive HZZ opinion, etc.) generally fall on the client–employer who concludes the ehe prescribed HZZ time limits.
