REDUCED WORKING HOURS FOR EMPLOYEES BEFORE RETIREMENT “80/90/100” (Article 67.b of the Employment Relationships Act (ZDR-1))
With the amendment to the Labour Market Regulation Act (ZUTD), as of 1 January 2026, the Slovenian legal system introduces the concept of reduced working hours for older employees, regulated in the new Article 67.b of the Employment Relationships Act (ZDR-1). Its main purpose is to ease the final years of working life while maintaining the employee’s social security.
1. Content of the measure and financial aspects
The measure is based on the 80/90/100 model, which sets a specific ratio between working hours, pay, and social security:
- Scope of work: The employee works 80% of full-time hours.
- Pay: The employee is entitled to a salary amounting to 90% of the basic salary for full-time work.
- Social security: Pension and disability insurance (PIZ) contributions are calculated and paid on a 100% base (as for full-time work). This ensures that participation in the measure does not negatively affect the pension base. The difference in contributions between the agreed salary (90%) and the full-time base (100%) is covered by the Republic of Slovenia from the state budget.
- Legal basis: This is provided by the amendment to the Labour Market Regulation Act (ZUTD-I), which introduced Article 67.b of ZDR-1. In this way, the state subsidises the extension of older employees’ working activity without excessively increasing the employer’s hourly labour costs and without reducing the employee’s pension base.
2. Eligible persons and transitional period
Employees who meet the following conditions have the right to propose inclusion in the measure:
- Age: At least 58 years (taking into account the transitional period).
- Or pensionable service: At least 35 years of pensionable service.
Transitional provisions regarding age:
In 2026 and 2027, the age requirement is 58 years. From 2028 onwards, the threshold increases by three months each year until it reaches the final limit of 60 years in 2035.
3. Conclusion and content of the agreement
The measure is not a unilateral right of the employee, but is based on mutual consent (a consensual relationship):
- Legal form: The change is arranged by a written agreement amending the employment contract (an annex).
- Nature of the right: The employee does not have a direct statutory right to reduced working hours (as, for example, under ZSDP-1), but the right to propose the change. The employer must respond to the proposal but is not obliged to accept it.
- Content of the annex: In addition to the salary amount, the parties must also determine the length of daily/weekly working hours and their distribution (in accordance with the 7th indent of the first paragraph of Article 31 of ZDR-1).
4. Statutory prohibitions and safeguards
To prevent abuse and protect the employee, the law provides:
- Absolute prohibition of overtime: Under this regime, the employee may not be assigned work beyond full-time hours.
- Prohibition of civil-law contracts: The employee may not perform work for the same employer on the basis of civil-law contracts (e.g., a contract for services or an author’s contract).
- Proportionate part of the pension: The employee retains the right to receive part of the pension in proportion to the actual working obligation (in accordance with ZPIZ-2).
- Related persons: Point 67.b of ZDR-1 provides that the option to agree on reduced working hours before retirement cannot be used in cases where there would be related persons between the employee (or their family members) and the employer.
This means that this benefit cannot be granted if the employee or their family member is ownership-related, management-related, or otherwise control-related to the employer—for example, if they hold at least a 25% ownership stake or voting rights in the company, or if they have actual influence over the management of the company, or vice versa.
The purpose of this restriction is to prevent the concept of reduced working hours before retirement from being used in cases where there could be abuse or preferential treatment of persons who are already connected to the employer, such as company owners or their close family members.
5. Termination of the measure and return to the previous arrangement
To stop using the measure and return to full-time work, the consent of both parties is again required. In the event of termination by mutual agreement, the employer must ensure that the employee can work under the conditions that applied before the agreement under Article 67.b of ZDR-1 was concluded.
Legal notice regarding implementation:
When concluding the agreement, the employer must deregister the employee from insurance under the existing basis and re-register them under the specific new insurance basis (code 122), which enables the system to treat hours and contributions separately.