What Severance Pay Rules Must Employers Follow in Slovenia?

Which Employees Qualify for Severance Pay?

• Employees whose employment contract is terminated by the employer for business reasons (redundancy, restructuring, economic reasons).
• Employees dismissed for incapacity, such as long-term loss of ability to perform work, as defined under ZDR-1.
• Employees on open-ended (indefinite) contracts who have at least one year of continuous service with your company.
• Employees on fixed-term contracts when the contract ends before the agreed expiry date for business reasons or incapacity.
• Employees whose employment ends due to a transfer of undertaking where statutory severance obligations are triggered by redundancies.
• Employees who do not meet statutory conditions for an old-age pension at the time of termination, unless a specific exception in ZDR-1 applies.

What Are the Legal Timelines for Paying Severance?

In Slovenia, severance must be paid at the time the employment relationship ends, usually together with the employee’s final paycheck. In practice, you should ensure payment no later than the regular payroll date following the termination date, unless a more favorable deadline is agreed in writing. The termination decision and severance calculation should be clearly documented and communicated to the employee in advance. If the employee challenges the termination in court, you are still expected to pay undisputed severance amounts on time. Collective agreements or internal policies may set shorter payment deadlines, which will bind your company once adopted.

What Penalties Apply if Severance Is Not Paid Correctly?

If your company fails to pay severance correctly in Slovenia, you risk labor inspections, financial sanctions, and court-ordered back payments with interest. Non-compliance can also damage your reputation and complicate future restructurings, especially where unions or works councils are active.

• Labor inspectors can impose fines on the employer and responsible managers for breaches of ZDR-1.
• Courts can order payment of outstanding severance plus statutory default interest.
• You may be required to reimburse the employee’s legal costs if they successfully sue.
• Repeated or serious breaches can trigger higher fines and closer monitoring by authorities.
• Invalid terminations may lead to reinstatement orders or additional compensation beyond severance.

Does Outsourcing Employment via an EOR Change Severance Liability?

Using an Employer of Record (https://www.playroll.com/employer-of-record) in Slovenia shifts day-to-day employment administration to the EOR, but it does not remove the need to follow Slovenian severance rules. The EOR is typically the legal employer on paper and must calculate and pay severance according to ZDR-1 and any applicable collective agreement. However, your company usually bears the economic cost through your service fees and remains exposed to commercial and reputational risk if terminations are mishandled. You should align with the EOR on who decides termination grounds, how service periods are tracked, and how severance is budgeted. A well-drafted EOR contract should clearly allocate responsibility for compliance, documentation, and dispute handling.

Be 100 Percent Compliant in Offering Severance with Playroll

Slovenian severance compliance starts with clean data: accurate hire dates, contract types, salary history, and records of any previous service that must be counted. Playroll helps your team centralize this information so you can quickly confirm who qualifies, which legal grounds apply, and what notice and severance package is required. With automated calculations aligned to ZDR-1 thresholds and local collective agreements, you reduce the risk of underpayment or inconsistent treatment across employees.

Beyond calculations, Playroll supports you through the full termination workflow, from planning timelines to coordinating final pay and documentation with local experts. Your team gets clear, country-specific guidance on how to structure business-reason or incapacity terminations, when to involve works councils, and how to document decisions. That way, you can execute restructurings in Slovenia confidently, while minimizing disputes, penalties, and disruption to your wider workforce.