Serbia is preparing a major review of its employment legislation, with remote work, freelance employment, platform workers, algorithmic management and pay transparency among the areas expected to receive greater regulatory attention.
The process remains at a preparatory stage. No final draft of a new Labour Law has been adopted, and the government has yet to decide whether to replace the existing legislation or introduce extensive amendments. The next drafting phase is expected to begin in September 2026, following more than a year of analysis. The reform is being assessed against 21 EU directives as Serbia works to bring its labour framework closer to the EU acquis.
EU-funded project enters drafting phase
The formal process began on 17 March 2025 through an EU-funded Twinning project, Support to improving working conditions and preparing the Republic of Serbia to participate in EURES. The project involves Serbia’s Ministry of Labour and experts from Greece, France, Sweden and Slovenia. Between March and August 2026, experts examined gaps between Serbian legislation and EU requirements through 12 focus groups.
The project is scheduled to continue until March 2027, with a possible three-month extension. Its work is now moving from analysis toward concrete legislative proposals.
Remote work and freelance status under review
Serbia’s existing Labour Law already permits employment outside an employer’s premises, including home-based work. The planned changes could provide more detailed rules covering working hours, availability outside regular schedules, occupational safety at home, reimbursement of electricity and equipment costs, employer monitoring and employee data protection. The expansion of permanent and hybrid remote work has also raised questions about how operating costs are divided between companies and employees, particularly where workers use their own electricity, internet, heating, furniture and workspace.
Freelance employment represents another major area of uncertainty. Serbia has a large community of IT specialists, designers, consultants, translators and other independent professionals serving domestic and international clients. The reform will need to distinguish genuine independent contractors from workers whose arrangements resemble conventional employment. Factors such as working exclusively for one company, following fixed schedules, reporting to managers and using company systems can blur the distinction. Employee classification affects social contributions, annual leave, working-time protections and dismissal procedures, while independent contracting provides greater flexibility and different administrative obligations.
Platform work introduces new regulatory questions
Digital platforms create another layer of complexity because algorithms can determine job allocation, remuneration and performance assessments without a conventional manager directly supervising workers. The EU’s Platform Work Directive, which entered into force in December 2024, introduces stronger rules on worker classification and algorithmic management. EU member states have until December 2026 to transpose the directive.
For Serbian businesses, closer alignment could mean greater transparency over how automated systems collect information and make decisions affecting workers, as well as stronger mechanisms for challenging incorrect self-employment classifications. The issue is becoming more significant as artificial intelligence and automated systems expand into recruitment, scheduling, productivity measurement and performance evaluation.
Pay transparency could change company salary structures
Salary transparency is another potential area of reform. The EU’s Pay Transparency Directive provides for greater information about remuneration, including salary or salary-range information for job candidates and employee access to information about pay levels for comparable work. Larger companies also face gender-pay-gap reporting requirements. Serbia has not yet confirmed that these provisions will be reproduced in the same form in future domestic legislation.
The issue is particularly relevant as wages continue to rise. The average net salary reached RSD 118,398 in May 2026, while average gross earnings were RSD 163,470. The median net salary was RSD 93,277. During the first five months of 2026, average net wages increased 11.3% nominally and 8.2% in real terms year on year. Public-sector net pay averaged RSD 123,511 in May, compared with RSD 116,319 in the private sector. Greater pay transparency could require companies to introduce more systematic salary structures, job classifications and internal benchmarking.
Labour market remains uneven
Serbia had approximately 2.836 million employed people in the first quarter of 2026, while unemployment stood at 276,300. The unemployment rate was 8.9%. Employment was 51,100 lower than a year earlier, while unemployment declined by 13,100.
Informal employment also remains significant. Approximately 321,700 workers, or 11.3% of total employment, were informally employed in the first quarter. Outside agriculture, the informal employment rate was 5.9%. The figures underline the importance of enforcement alongside legislative changes, particularly for companies already complying with payroll, tax, employment and workplace-safety requirements.
Businesses await clearer rules
The impact of the reform will vary by sector. Technology and business services are particularly exposed to remote and freelance arrangements, while delivery and transport companies face greater exposure to platform-work rules. Manufacturing and construction businesses are more directly affected by working-time, overtime, temporary employment and occupational-safety provisions, while large service companies could face significant changes from pay-transparency requirements.
For multinational investors, the main issue will be regulatory predictability. Companies planning investment need clarity on employment costs, dismissal procedures, overtime, remote-work obligations and administrative requirements. The government must also balance EU alignment with the flexibility sought by businesses, particularly in sectors competing internationally.
Serbia’s participation in EURES adds another dimension. Greater integration with European employment services could increase cross-border labour mobility at a time when the country already faces shortages in several skilled occupations. The government has not yet determined whether the outcome will be a new Labour Law or extensive amendments to the existing framework. The drafting process scheduled to begin in September 2026 will determine how Serbia ultimately regulates remote employment, freelance work, platform labour, algorithmic management and pay transparency.
