Labour law in the Czech Republic regulates the legal relations arising in connection with the performance of dependent work between employees and their employers, labour relations of collective nature and other aspect related to employment.
The fundamental principles of labour relations are especially legal protection of employee status, satisfactory and safe working conditions for performance of work, fair remuneration and equal treatment of employees and prohibition of their discrimination.
Download our 2022 guide on labour law and employment in the Czech Republic, for more essential employee-related information, or read more below:
Entitlement to work in the Czech Republic
For Czech nationals
No employment permission needed.
For foreigners
- Foreigners from the EU, Switzerland and EEA and their family members do not need an employment permit
- Foreigners from third countries (except some special categories of employees, such as holders of long-term residency permits, students etc.) need one of the following:
Employment types
Regular employment
There are two types of regular employment contracts in the Czech Republic:
Work outside employment relationship
Furthermore, an employee may perform work outside employment relationship on the ground of two agreements:
Probationary period
In Czech employment contracts, the probationary period can be concluded as:
Maximum 3 consecutive months for regular employeesMaximum 6 consecutive months for managersA probationary period may not be longer than one half of the agreed period of the employment relationship and must be agreed in writing on the day of commencement of employment at the latest.
Termination of employment
Cases
Employment relationship may be terminated with the Czech employee:
- by agreement between the parties in writing
- by notice of termination
- the notice of termination shall be made in writing and delivered to the other party
- the employee may give his employer notice of termination for any reason or without stating a reason
- the employer must specify the reason based on a list of reasons provided by law
- the Czech law prohibits giving notice to an employee during the protection period (while the female employee is pregnant or is on maternity or parental leave, the employee is unfit for work, the employee is released to exercise a public office, etc., given that other conditions are met) (note: even the protection period has its own conditions which need to be met. For example, an employee is not protected if his/her incapacity for work was caused by intoxication)
- by immediate termination only for reasons specified in the Labour Code
- by termination within a probationary period
- on the expiry of agreed period in case of employment contract for a definite period
- upon lapse of validity of a work permit of a foreign employee, or due to deportation or revocation of a residence permit
- upon death of the employee
In some specific cases, an employee is entitled to severance pay upon termination of employment.
Notice period
Where notice of termination has been given, the employment relationship will come to an end upon the expiry of the notice period. The notice period must be the same for both the employer and the employee.
The notice period shall be at least 2 months and can be extended only by agreement between the employer and the employee in writing. The notice period shall start to run on the first day of the calendar month following delivery of the notice.
The length of the notice period is regulated differently for agreements on work outside of an employment relationship. Unless agreed otherwise, the notice period for these agreements is 15 days and starts on the date on which the notice is delivered to the other party.
Social contributions and income tax
The employer is obliged to pay monthly contributions to social and health insurance and advances on the income tax.
Contributions paid by employers for each employee
Contributions paid by employee
Personal income tax
The personal income tax in the Czech Republic is paid by the employee at a flat rate of 15% applicable on a gross salary up to the annual income of 48x the average salary (i.e. CZK 1,867,728.00).
Income exceeding this limit is taxed at a higher flat rate of 23%.
Working time and vacation
Working time
40 hours/week is the length of standard weekly working hours, except for some employees. Working hours are usually distributed over a five-day working week. Part-time work may be agreed between the employer and employee.
12 hours/day is the maximum length of a shift. The employer shall distribute working hours and determine the start and end of shifts.
25% of the average earnings is the premium that the employee is entitled to for the work performed in excess of the working-time standards and in addition to the attained wage, or a compensatory time off.
Besides an evenly distributed work time schedule, employers may also introduce uneven or flexible schedules, as well as a work time account. Specific requirements are indicated in the Czech Labour Code.
Time off
Regarding the vacation and other circumstances under which the Czech employee can take time off, the main cases are:
Most common employee benefits
The most common benefits for employees in the Czech Republic are:
- bonuses in terms of financial rewards
- professional trainings
- language courses and personal development
- the option to work from home
- additional days off (extra holidays, study leave, sick days)
- discounts on company products
- flexible working hours
- meal vouchers
- company phone
- company car or transport allowance
- insurance contributions
- sports and recreation contributions
- refreshment/beverages at workplace
Certain companies offer also temporary accommodation or housing allowances, recreation in the company’s facilities or holiday allowances, or free ticket by companies operating regular public transportation.
Agency employment and posting
Agency employment
An employment agency temporarily assigns its employee to perform work for a client on the basis of a temporary assignment agreement entered into by and between the agency and the client.
The employment agency and the client are obliged to secure that the working and wage conditions for the temporarily assigned employee are not or would not be worse than those under which a comparable employee works or would work.
Posting of employees and the necessity to carry an A1 certificate
In case an employee of an employer based in one of the EU member states is sent to work within the framework of the posting of employees in the territory of the Czech Republic, such an employment must comply with the European legislation, as well as that of the Czech Republic.
An A1 certificate is a form that states the country in which an employee is covered by social insurance. In principle, all employees are covered by social security in the country where they work and hence to prove this, employees must carry an A1 certificate.
Inspections in several EU countries are strict and may cause unpleasant situations to the employees and their employers if they do not have A1 certificates.
If the posting is short-term (i.e. up to 12 months), the employment must comply with the following Czech basic work conditions:
- maximum work periods and minimum rest periods
- remuneration, including overtime rates; this does not apply to supplementary occupational retirement pension schemes
- occupational safety and health
- minimum paid annual leave
- working conditions for pregnant employees, breastfeeding employees and employees up to the end of the ninth month after giving birth and minors
- equal treatment of male and female employees, ban on discrimination
- working conditions for agency employment
- conditions of employee accommodation
- allowances or reimbursement of expenditure to cover travel, board and lodging expenses for employees away from home for professional reasons.
In case of long-term postings (i.e. exceeding 12 months), it is necessary to ensure that also any other local work conditions are applicable to the posted employee, whether they are laid down by law, regulation, administrative provision, collective agreements or arbitration awards which have been declared universally applicable.
Local legislation is not applicable if the legislation of the posting country is more favourable to the employee, which is to be considered individually.
Overview of applicable legislation
The main sources of the labour law are three acts:
- Act No. 262/2006 Coll., the Labour Code, as amended
- Act No. 2/1991 Coll., the Collective Bargaining Act, as amended
- No. 435/2004 Coll., the Employment Act, as amended
However, the area of labour law is governed by other important regulations, such as:
- Act No. 309/2006 Coll., the Act Stipulating Further Requirements for Health and Safety at Work, as amended
- No. 251/2005 Coll., the Labour Inspection Act, as amended
- No. 73/2011 Coll., the Labour Office Act, as amended
- Act No. 187/2006 Coll., the Sickness Insurance Act, as amended
- Act No. 329/2011 Coll., on benefits for people with disabilities, as amended
- Act No. 589/1992 Coll., on social security insurance and state employment policy, as amended
- Act No. 48/1997 Coll., on public health insurance, as amended
- Act No. 592/1992 Coll., on premiums for general health insurance, as amended
- Act No. 326/1999 Coll., on the Residence of Foreigners in the Territory of the Czech Republic, as amended
- Act No. 118/2000 Coll., on protection of employees against the employer’s insolvency, as amended
