Serbian legislation provides for a maternity leave compensation in the amount of the mother’s average salary in the last 12 months before the leave. The compensations is paid from the state budget, but the procedure of ascertaining the right to maternity leave compensation is conducted by local government.
Some employers tried to manipulate the system by making unjustified salary raises to their pregnant employees, thus raising their average salary. Serbian authorities have increased scrutiny on such raises, and started declining the raises they deem to be unjustified.
The payments of maternity leave compensations are made by employers, but are latter reimbursed to them when the authorities enact a resolution on the right to maternity leave compensation. Due to this time discrepancy, it often happens that the employers become aware of their raises being declined only after they have paid substantial amounts of money to their employees on maternity leave that at that point cannot be reimbursed anymore.
Since it is not unusual for pregnant women to work until the end of their terms, it can happen that they get a legitimate raise during the term, which the administration will not accept, thus significantly decreasing the future mother’s maternity leave compensation and causing damage to the employer which already paid the increased compensation.
If the raise is declined, there is a possibility of an appeal and a lawsuit before the Administrative Court, as the last resort. However, these procedures tend to be slow, and can last for more than a year or two. Also, the current practice of both the Ministry of Labor, Employment, Veteran, and Social Security Affairs and the Administrative Court shows that the original rulings are usually upheld.
Therefore, it is important for the annex of the employment contract for salary increase to explain in detail the reasons for this raise and to correlate it with the increase in workload or the level of employee’s responsibilities. The better the raise is explained, the chances it will be accepted by the Serbian authorities are higher.
By Marija Oreski Tomasevic, Partner, and Dusan Dincic, Senior Associate, SOG / Samardzic, Oreski & Grbovic