European recovery and resilience funding: Together towards the goal – a more resilient labour market
Demographic change, population ageing and relatively low labour market participation among older people are placing increasing pressure on the labour market and, in turn, on the sustainability of the pension system. Today, one in five residents of Slovenia is aged over 65; in 35 years’ time, almost one in three will fall into this age group.
Through the Recovery and Resilience Plan, Slovenia has addressed structural employment challenges arising from demographic trends and technological change.
The reform and two investments under the RRP were designed to mitigate the adverse effects of these structural trends by strengthening labour market resilience, increasing participation and safeguarding the fiscal sustainability and adequacy of pensions.
The Ministry of Labour, Family, Social Affairs and Equal Opportunities is responsible for delivering the reform and investments and for meeting the related milestones and targets required to secure the disbursement of RRF funding.
Reform to strengthen the resilience of the labour market
On 18 June 2025, the National Assembly of the Republic of Slovenia adopted the Act on Partial Reimbursement of Wage Compensation for Short-Time Work (ZUDPNP), which entered into force on 12 July 2025. The scheme supports employers in retaining jobs during periods when, due to exceptional circumstances, they are temporarily unable to provide work. It allows employers to claim partial reimbursement of wage compensation for employees for whom they are temporarily unable to provide full work.
On 20 June 2025, the National Assembly also adopted amendments to the Labour Market Regulation Act (ZUTD), which entered into force on 20 September 2025. The amendments increase unemployment benefits, introduce incentives for employing older recipients of unemployment benefits, allow reduced working hours for employees approaching retirement, and expand opportunities for temporary or occasional work by pensioners. Together, these measures are intended to reduce early withdrawal from the labour market. The Act also more clearly defines the activities of temporary work agencies that provide labour intermediation services. The conditions for carrying out this activity are being tightened. The aim is to ensure a more orderly and transparent labour market.
In January 2026, the Government also adopted the Guidelines for the Implementation of Active Employment Policy Measures for the period 2026–2030. The Guidelines set the framework for active employment policy over the next five years. During this period, measures will focus in particular on the most vulnerable groups in the labour market. The objectives are to reduce long-term unemployment, accelerate the activation of unemployed persons – especially those aged over 50, low-skilled individuals and recipients of social assistance – support faster labour market entry for young people up to the age of 29, and strengthen skills in line with labour market needs.
An amendment to pension legislation was also adopted, establishing a long-term stable, sustainable and fair pension system for all generations and representing one of the most significant social policy reforms in recent years. Three RRP milestones were linked to the pension reform: submission of the proposed legislative amendments to the Economic and Social Council, submission of the draft amendments to the National Assembly, and entry into force of the revised legislation.
The first pension reform milestone formed part of the third payment request, which the European Commission fully disbursed in October 2024. The second milestone, together with the milestones linked to ZUDPNP and ZUTD, was included in the fourth payment request, disbursed in full in November 2025. The third pension reform milestone forms part of the fifth payment request submitted to the European Commission in December 2025. The milestone related to the adoption of the Guidelines will be included in the sixth payment request, which Slovenia plans to submit in spring 2026.
Faster entry of young people into the labour market - investment
This investment provides financial incentives to employers who recruit young people up to the age of 29 on open-ended contracts. The scheme aims to offer young people more secure employment and facilitate their transition into the labour market.
During the subsidised period, employers must ensure appropriate mentoring and job-specific training. This supports smoother integration into the workplace and fosters intergenerational cooperation through the involvement of experienced mentors.
The 18-month subsidisation period enables young people to gain practical experience, complement their theoretical knowledge and acquire additional competences, thereby strengthening their employability.
Approximately €13.5 million from the Recovery and Resilience Facility (RRF) has been allocated to this investment.
Under this investment, the Ministry of Labour, Family, Social Affairs and Equal Opportunities supported the programme Faster entry of young people into the labour market, implemented by the Employment Service of Slovenia. Within the RRF-financed component of the programme, 2,292 employers concluded 2,723 open-ended employment contracts with young people under the age of 29.
The first target under this investment was included in Slovenia’s second payment request and was fully disbursed by the European Commission in December 2023. The second target forms part of the fifth payment request.
Introducing more flexible working methods adapted to the needs of persons with disabilities in sheltered enterprises and employment centres – investment
This investment lays the groundwork for introducing more flexible working arrangements in sheltered enterprises employing persons with disabilities and in employment centres.
Through a public call, the Ministry of Labour, Family, Social Affairs and Equal Opportunities supported sheltered enterprises and employment centres in developing and introducing business models adapted to their operational needs and labour market conditions. In practical terms, this involves adjustments to operations, updates to internal rules and the adaptation of work processes. The projects also focus on the uptake of new technologies, digitalisation and more flexible forms of work.
A key component is the preparation of career development plans and targeted training programmes for persons with disabilities, as well as for employees working alongside them.
Under the investment, 37 business model development plans were prepared for 11 employment centres and 26 sheltered enterprises.
The investment also provides for the preparation of legislation guides in easy-to-read format, as well as video content tailored to individuals who may have difficulty understanding more complex information.
A total of €2.42 million from the Recovery and Resilience Facility has been allocated to support this investment.
The target linked to this investment forms part of the fifth payment request.
