Support the Development of Small Businesses by Reducing the Cost of Labour

The burning issue of the Croatian economy is growing unemployment which rose from 320,000 in 2011. to 380,000 at the beginning of 2014. In mid of 2012 Employment Promotion Law was introduced to encourage employment but also to reduce the cost of labour. Through the release of the payment of contributions, this law influences on reducing the cost of labour, and thus further encourages employers to recruit unemployed people with no work experience in occupations for which they have been trained and long-term unemployed. This work included the exemption from payment of contributions under the law on contributions and benefits under the law on employment promotion. Because of the need to protect workers and their rights, the proposed reduction in labour costs can be realized only by those employers who during the period of use of exemptions, regularly pay wages, mandatory insurance contributions and taxes to all their already employed workers, and do not reduce the number of employees by business or conditional dismissal program for redundant workers.