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EACEA National Policies Platform
Bosnia and Herzegovina

Bosnia and Herzegovina

3. Employment & Entrepreneurship

3.2 Administration and governance

Last update: 12 September 2022

Labour and social policy in Bosnia and Herzegovina (BiH) are within the competence of entities and Brčko District (BD). In the Federation of Bosnia and Herzegovina (FBiH), social policy and health protection are within the shared competence of the entity and ten cantons. In that sense, FBiH ministries responsible for labour, social policies and health protection are the FBiH Ministry of Labour and Social Policy and the FBiH Ministry of Health and respective ministries in the ten cantons.

In RS, the RS Ministry of Labour, War Veterans and Disabled Persons’ Protection and the RS Ministry of Health and Social Welfare are responsible for policymaking in these areas, including monitoring of the trends. The Department for Health and Other Services is competent for social policy in BD, while a separate department for labour does not currently exist.

The BiH Ministry of Civil Affairs and the BiH Ministry of Human Rights and Refugees are assigned only a coordinating role when representing the economy’s interests abroad. Along with the competent ministries, a monitoring role is assigned, by relevant laws and policies, to the entities and BD’s economic and social councils, but primarily for the purpose of their internal decision-making. Besides, at the state level, the BiH Labour and Employment Agency has a coordinating role (including monitoring and data-collection) when representing public employment services of entities and BD abroad.

The BiH Directorate for Economic Planning oversees analysing economic and social trends as well as monitoring the implementation of economic strategies. When it comes to occupational health and safety, this area is monitored by the administrations for inspection affairs in coordination with the above-mentioned relevant ministries. Entity and state-level statistics institutes/agencies are in charge of gathering and systematizing statistical data on the relevant labour market, education and social indicators and conducting surveys based on internationally defined methodologies (e.g., Labour Force Survey, Household Budget Survey, etc.).

Some policy progress has occurred in 2020 and early 2021, especially in the RS, thus improving the relevancy of education to labour market trends and industries’ needs. There were no significant entity-level improvements of education policy in the FBiH, which can be partially attributed to the limited jurisdiction of the FBiH over education policy (it is mainly in the competencies of cantons).

Decentralised education in FBiH makes proper monitoring of policy developments in this respect difficult. However, it is worth mentioning that the Law on Dual Education is in the process of preparation in the Sarajevo Canton and the first draft was developed in 2019. In January 2020, the Government of the Sarajevo Canton instructed the cantonal Ministry of Education, Science and Youth to submit the draft law for review and the adoption procedure. However, the policy process has not been finalised yet. In the RS, the Adult Education Policy 2021-2031 was adopted in December 2020, thus defining the strategic framework for policy in this area for the first time.

An important novelty is a possibility for higher education institutions to organize shorter non-degree study programmes lasting 1-2 years (60-120 ECTS), with a clearly defined purpose, as a faster and more efficient response to the labour market trends and needs. This improves the connection between higher education and the labour market. Finally, the Council of Ministers has adopted a state-level policy Improving the Quality and Relevance of Vocational Education and Training in Bosnia and Herzegovina - Based on the Conclusions from Riga (2021-2030) in January 2021.

The policy defines basic principles and priorities related to the quality and accessibility of vocational education and training, continuous development of educators and mentors, promotion of work-based learning, etc.

The main policy response to labour market disruptions caused by the COVID-19 crisis were the Employment Retention Measures implemented as wage subsidies. In the FBiH, the ERMs introduced at the beginning of the crisis have subsidised only 37.2% of total labour costs for the minimum wage (level of contributions paid on the minimum net wage), meaning that the intensity of subsidies diminishes as the wage increases. For instance, only 7% of the total labour costs were covered for salaries two times higher than the average wage. However, this measure was complemented by cantonal measures designed as net wage subsidies. Therefore, companies could cover total labour costs at the level of the minimum wage, if have been eligible for both measures. In the RS, two employment retention schemes have been introduced. The first one covers contribution costs for a particular salary paid to an employee— meaning it is proportional to the level of salary—and applies for March and for companies with suspended business operations no longer than May 11th, 2020. Complementary to this scheme, authorities in the RS also introduced a flat rate measure that covers total labour costs in the amount of the minimum wage and applies to April and companies prohibited to operate after May 11th, 2020. The first measure compensates 33.1% of the total labour costs associated with the minimum wage and the relative level slightly increases with salaries goes up, while the second one compensates 100% of the minimum wage total labour costs and diminishes as the salary level increase. Both entities measures were designed for businesses experiencing revenue loss or businesses whose operations have been prohibited by the government during the lockdown. On the other sides, entities did not attach an obligation for receivers of support to keep subsidised employees for some period after receiving support, which can be explained by the fact that support was provided retroactively. Finally, both entities have introduced various other complementary measures to support the economy – such as guarantee funds, touristic vouchers, etc. – thus indirectly supporting job retention.