Estonia, nestled along the Baltic Sea coast, is not just renowned for its breathtaking landscapes and vibrant culture but has also emerged as a hub for the global economy. This Baltic gem, with its population of around 1.35 million, boasts a competitive market and a conducive climate for businesses. It is especially appealing to companies eyeing expansion in Europe, thanks to its status as a European Union member and a digital-forward society.
The country’s workforce is a treasure trove of skilled, young professionals, many of whom are eager to join start-ups and bring innovative ideas to life. This makes Estonia an ideal locale for businesses looking to inject fresh talent and energy into their operations. However, navigating the hiring process in Estonia requires thorough planning and an understanding of the local employment landscape. Employers must acquaint themselves with the country’s employment and labor laws, including payroll processes and social security benefits, to ensure a smooth and compliant hiring experience.
| CURRENCY | OFFICIAL LANGUAGE | PAYROLL FREQUENCY |
|---|---|---|
| EURO | ESTONIAN | MONTHLY |
| PUBLIC HOLIDAYS | EMPLOYER TAXES | 13TH / 14TH SALARY |
|---|---|---|
| **12 (**based on region) | 33.8% | |
| of gross salary | N/A |
In Estonia, after the recruitment and selection process, the standard framework for working hours is typically eight hours per day, spanning five days a week. This schedule aligns with the general European work culture, focusing on balancing work and personal life. However, it is crucial to note that the maximum length for a single shift is capped at 12 hours, taking into account necessary breaks such as those for lunch and prayer. When these breaks are factored in, the total working schedule for an employee can extend up to 48 hours across a seven-day period.
Regarding overtime, which includes work done during national holidays, Estonia has specific regulations to ensure fair compensation for employees. Work performed on national holidays is classified as overtime and is compensated accordingly. Employers have two options for compensating overtime: they can either grant paid leave to the employee or offer double the regular wages for the overtime hours worked.
Furthermore, any work that exceeds the standard 40-hour weekly limit is considered overtime. It's important that both the employee and the employer mutually agree to this overtime work. In terms of remuneration for overtime, the employer is obligated to provide an additional 50% on top of the employee's standard hourly wage rate. This regulation is in line with the government's rules and policies, designed to ensure fair and adequate compensation for extended working hours.
These guidelines underscore Estonia's commitment to maintaining a balanced and fair work environment. Employers looking to hire in Estonia should be well-versed in these regulations to ensure compliance and to foster a positive and productive working relationship with their Estonian employees.
Probationary Period: Estonia permits a probationary period of up to four months. This period allows both the employer and the employee to assess the suitability of the employment relationship. During this time, either party can typically terminate the contract with shorter notice, facilitating a more flexible assessment period.
Notice Period for Resignations: When an employee resigns, Estonian law requires them to adhere to a notice period, which can range from 14 days to one month. The exact duration of this period is generally stipulated in the employment contract. This notice period allows employers sufficient time to prepare for the employee's departure and arrange for a replacement or redistribution of duties.
Notice Period for Dismissals: The notice period for dismissals in Estonia varies depending on the length of the employee's tenure with the company. The law specifies the following durations:
These varying notice periods for dismissals are designed to provide employees with a fair amount of time to seek alternative employment based on their tenure and presumed reliance on the job. It reflects a progressive approach to employment rights, recognizing the increasing impact of job loss on employees who have longer service periods.
For both employers and employees, understanding and adhering to these probationary and notice period regulations is crucial. They are fundamental components of the employment framework in Estonia, ensuring smooth transitions and mitigating potential disputes during changes in employment status.