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On 31 July 2024, an amendment to Act No. 226/2006 Coll., the Labour Code, was published in the Collection of Laws. It is mainly a transposition amendment to the Labour Code in the Czech Republic that incorporates the requirements of the European Union into the Czech legal system. However, other provisions relevant to labour law were also inserted by the amending legislative proposals.
The transposition amendment to the Labour Code in the Czech Republic brings several important changes that will affect both employers and employees. You may read below about the new mechanism for calculating the minimum wage, the abolition of the guaranteed wage in the private sector and other changes brought by this amendment.
Although the transposition amendment to the Labour Code in the Czech Republic was effective literally hours after its promulgation, there is no urgent need to rewrite contracts and agreements. Most of the changes are in fact applicable only from 2025; there are only a few changes that need to be or can be considered now.
From 1 August 2024, the following changes apply:
On the contrary, the following changes will only take place as of 1 January 2025:
The transposition amendment to the Labour Code in the Czech Republic introduces a new method of calculating the valorization of the minimum wage in accordance with the requirements of Directive (EU) 2022/2041 of the European Parliament and of the Council of 19 October 2022 on adequate minimum wages in the European Union.
The new valorization will be linked to the forecast of the average gross monthly wage for the calendar year for which the minimum wage is set. An indicative reference value of 47 % of the average gross wage in the national economy is set. The indicative reference value is not a target but serves for the purpose of comparing the current level of the minimum wage in relation to an assessment of its adequacy.
The minimum wage will thus rise in line with the increase in the ratio to the average wage in the national economy. Practically, this mechanism will mean a significant increase in the minimum wage. It is already expected that the minimum wage will rise to CZK 20,600 from next year (press release of the Ministry of Labour and Social Affairs available in Czech). The specific amount of the minimum monthly and hourly wage for the following year will always be decided by decree of the Ministry of Labour and Social Affairs by 30 September of the preceding year.
WHEN: Under this valorization mechanism, the minimum wage will be stipulated for the first time for the year 2025. From the date of effect of the amendment until the end of 2024, employees will be entitled to the minimum wage at the level in force before the amendment, i.e. at the level set by the Government in Government Decree No. 567/2006 Coll.
The guaranteed wage is abolished in the private sector altogether.
According to surveys, the vast majority of companies provide wages above the guaranteed wage levels. There are also often problems with correct job classification. The legislator has therefore decided to abolish the guaranteed wage in the private sector altogether. Protection against unreasonably low valuation of work will now be ensured by the minimum wage, which is expected to increase significantly.
The institution of guaranteed salaries in the public sector will remain effective. The lowest levels of guaranteed salary are set in four job groups according to a government regulation, instead of the previous eight.
WHEN: Under transitional provisions, employers will still have to respect the lowest guaranteed wage level for 2024 until the end of 2024.
The so-called self-scheduling of working hours by the employee is introduced. The employee and the employer will now be able to conclude a written agreement under which the employee will be able to schedule his or her own working hours. This will extend the possibility of self-scheduling from remote workers (as was possible before the amendment) to employees working at the workplace.
The length of a self-scheduled work shift must not exceed twelve hours and employees must observe the legal limits for daily and inter-shift rest and breaks. Since the employer is still responsible for compliance with these conditions, it is advisable that the employer continuously monitors compliance with them, for example by means of the employee’s timesheets (it is advisable to negotiate the obligation to keep such records with employees). It is also possible to negotiate other restrictions directly in the agreement, e.g. a prohibition to schedule working hours at night, on Saturdays and Sundays, on public holidays etc., in order to avoid the employer’s obligation to pay the corresponding premiums.
The agreement may also specify whether the employee is to have an even or uneven weekly working hours and how long the compensation period will be in such a case. It is necessary that the shifts scheduled correspond to the scope of the employee’s working hours and the compensation period (in the case of an uneven working hours schedule).
It may be preferable for the employer not to include the above limitations directly in the agreement, but to inform the employee of them in writing because of possible later changes. The agreement may be terminated by mutual agreement or by unilateral notice with 15-day notice period. Please note that this period already starts from the date of delivery of the notice to the other party.
This will also affect persons working under agreements for work performed outside the employment relationship, with whom an agreement may also be concluded. The employer would then be no longer obliged to schedule their working hours in advance, which was rather formal in practice anyway. However, it is advisable to negotiate a maximum number of working hours for a certain period with such workers (in particular to avoid exceeding the maximum limits of agreements for work performer outside the employment relationship). A fine of up to CZK 300,000 may be imposed under the Labour Inspection Act for failure to conclude a written agreement, for breach of obligations under the agreement or breach of the rules for terminating the agreement.
The new regulation on self-scheduling of working time will apply generally, both to the performance of work at the workplace and outside the workplace. It may be practical to enter into such agreements already within the framework of employment contracts or agreements for work performed outside the employment relationship (however, this does not affect the possibility of terminating said agreement).
WHEN: The effective date of this change is delayed until 1 January 2025.
Until now, the premium for work in difficult working environment in the public sector has been set at 5 % of the minimum wage, but the amendment sets a new amount ranging from 5% to 15% of the minimum wage. The final amount of the allowance will be determined by the employer within such specified range, considering the degree of risk, intensity and duration of the aggravating influences. The range will be determined annually for the following year by the Ministry of Labour and Social Affairs by 30 September.
WHEN: Under the transitional provisions, the increase in the premium will only apply from 1 January 2025.
Thanks to the amendment, it is now possible to negotiate remuneration from the agreement on work outside the employment relationship explicitly taking into account possible night work, work in a difficult working environment or work on Saturdays and Sundays. It is conditional upon agreeing on the scope of work in the given harder work regimes.
WHEN: 1 August 2024
The transposition amendment to the Labour Code in the Czech Republic abolishes the obligation for employers to issue a written annual leave schedule at the beginning of each calendar year. This step will reduce the administrative burden on the employer and better reflect the established practice, where it is quite common to proceed differently, and situations arise where the dates of annual leave are usually decided by the employees themselves during the calendar year and the employer only approves them.
However, it remains the case that the date of taking annual leave is ultimately determined by the employer according to its operational needs, while considering the legitimate interests of the employee.
WHEN: 1 August 2024
The transposition amendment to the Labour Code in the Czech Republic extends the regulation of collective bargaining and negotiations with trade unions. The amendment is intended to address situations in which several trade union organizations operating at an employer have disagreed on the content of a collective agreement and thus blocked its conclusion.
If the trade unions fail to reach an agreement within a certain period of time, the employer is entitled to conclude a collective agreement with the trade union organization with the largest number of members or with several union organizations with the largest collective number of members. This may be prevented only by written opposition of a majority of the employees.
WHEN: 1 August 2024
In the case of employees working in the healthcare sector in continuous operations, the possibility of scheduling a shift of up to 24 hours (from the normal 12 hours) is introduced. This is to avoid situations where healthcare workers are scheduled to work shifts with overtime. By definition, overtime cannot be scheduled in advance.
In connection with this, a new premium is also introduced for the increased workload of a healthcare worker of at least 20 % of average earnings for the 13th and each additional hour worked in such a shift.
In addition to the above, the obligation of employers to allow healthcare workers to improve their qualifications, which is considered to be the performance of work, and the right of healthcare workers to paid time off when increasing their qualifications are set (this change is regulated by Acts No. 95/2004 Coll. and No. 96/2004 Coll.).
WHEN: 1 August 2024
The transposition amendment to the Labour Code in the Czech Republic specifies the liability for wages of employees of subcontractors in the building industry. Specifically, the guarantee applies to the supply of the following: construction work provided during the execution of the construction, alteration or maintenance of the completed construction or during the removal of the construction on the construction site, in particular excavation work, earth moving, actual construction work, assembly and disassembly of prefabricated parts, installation of plant or equipment, construction modifications, construction renovation, construction repairs, construction disassembly, construction demolition, construction maintenance, painting and cleaning work as part of construction maintenance, construction remediation.
WHEN: 1 August 2024
Since the transposition amendment to the Labour Code in the Czech Republic was promulgated at the last possible moment in July and entered into force on the first day of the calendar month following its promulgation, it became effective as early as 1 August 2024, with the exception of the provisions on the distribution of working time and the amendments to the Labour Inspection Act, which enter into force on 1 January 2025. However, according to the transitional provisions, most of the substantive changes are also applicable only as of 1 January 2025, as mentioned above.
We will be happy to assist you with any obligations related to these changes, please do not hesitate to contact our team.
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