Labour and Employment Law in the Czech Republic
The Czech Act No. 262/2006 Coll., the Labour Code as amended 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. Also the Czech Act No. 89/2012 Coll., the Civil Code as amended, has a subsidiary function to the regulation and further acts such as Act. No. 435/2004 Coll., Act on Employment as amended apply. The relevant acts can be found also on the web page of the Czech Ministry of Labour and Social Affairs.
The fundamental principles in labour law 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.
Employment Types
In the Czech Republic, employers primarily establish employment relationships through two contract types. They can conclude a definite-period contract for up to three years and may extend or renew it twice, for a maximum of nine years. The second type is an indefinite-period contract. The law presumes employment is indefinite unless the contract specifies a fixed term, ensuring ongoing employment.
In addition to standard employment, Czech labour law allows for flexible work arrangements. The Agreement to Complete a Job suits short-term tasks, limiting work to 300 hours annually with one employer. For ongoing part-time work, the Agreement to Perform Work restricts hours to half the standard workweek, typically not exceeding 20 hours. These arrangements provide adaptable alternatives to full-time employment for both employers and employees.
Working Time and Time Off
The Czech Republic has clear regulations on working hours and leave entitlements to ensure fair treatment of employees. The standard workweek is 40 hours, usually over five days. A single shift cannot exceed 12 hours. Employers set work schedules, and overtime is paid with a minimum 25% bonus, unless exchanged for compensatory time off. Flexible working arrangements are possible, including self-managed working hours from 2025, applicable both in-office and remotely.
Employees working 52 weeks at full contractual hours are entitled to four weeks of annual leave. If they work at least four weeks, they earn 1/52 of the annual leave per worked week. Employees in especially difficult jobs receive an extra week of additional leave, calculated proportionally if they work less than a full year in such positions. These rules help ensure a healthy work-life balance for employees in the Czech Republic.
Termination of en Employment Relationship
In the Czech Republic, employment can end through various means. A mutual agreement allows both parties to terminate the contract in writing. Employees can terminate without reason, while employers must provide a legally valid reason based on a list of reasons provided by the Czech Labour Code, except during protected periods (e.g., pregnancy, parental leave, or illness), during which no termination is allowed. Immediate termination is allowed only for specific legal reasons. During probation, either party may end employment without reason. Fixed-term contracts end upon expiration, and other factors like a work permit lapse or death may also lead to termination. A two-month notice period applies to both parties unless extended by mutual agreement, starting from the delivery. For non-standard employment agreements, the notice period is 15 days from delivery.
Entitlement to work
In the Czech Republic, Czech citizens do not need a work permit. Nationals from the EU, Switzerland, and the EEA, along with their family members, also do not need work authorization. However, third-country nationals from non-EU countries must obtain a work permit or residence card.
The types of permits available include the work permit for seasonal workers, the Blue Card for highly skilled professionals, the Employee Card for long-term employment, and the Intra-Company Transfer Card for employees transferred within a company. Foreign nationals must ensure they apply for the correct permit to comply with Czech labour laws.
Labour Market in the Czech Republic
The Czech Republic's labour market in 2025 shows a low unemployment rate, reflecting a stable employment environment. The market, much like the economy and industry, has a strong regional character. The capital city of Prague and the Central Bohemia Region traditionally have the lowest unemployment, the most job opportunities, and the highest average salaries. In contrast, the Ústí nad Labem and Moravia-Silesia Regions show the poorest rates. Forecasters project the average nominal monthly gross wage will continue its rising trend.
The income tax rate is 15%; however, income exceeding CZK 1,676,052 per year faces a higher 23% tax rate. Czech labour law also establishes a system of social and health security contributions. These contribution rates vary for employees, employers, and the self-employed. Employees contribute 7.1% for social insurance (which includes pension and sickness insurance) and 4.5% for health insurance, while rates for employers and self-employed individuals are higher.
Specific issues related to Czech Labour and Employment law:
False Self-Employment in the Czech Republic
Under Czech labour law, "dependent work" must be within an employment relationship. The "Švarc system" occurs when companies misclassify employees as independent contractors. Key criteria for dependent work include employer control, comparable employee status, wage-based remuneration, employer-provided materials, and exclusivity. Authorities have intensified enforcement, with fines up to CZK 100,000 (€4,000) for individuals and CZK 250,000–10,000,000 (€10,000–€400,000) for companies.
Also, the so-called disguised employment intermediation is forbidden. The disguised employment intermediation means the activity of a legal person or natural person consisting in hiring labour to another legal person or natural person without complying with the conditions for employment intermediation, i.e. without labour agency licence. This might usually happen when employees are assigned to another employee and costs for such employee are only simply re-invoiced.
Digital Signatures for Czech Employment Contracts
Czech labour law requires employment contracts to be in written form, but electronic signatures are legally recognized under both EU and Czech regulations. Private employers can use simple electronic signatures, while public entities must use recognized ones. Valid options include biometric signatures, online verification services, and other secure authentication methods that clearly identify the signatory.
To be legally valid, an electronic contract must meet several conditions. It must accurately capture the content of the agreement and clearly identify both parties. Furthermore, both the employer and employee must be able to retain and print a copy from its storage format. Employers must also ensure they deliver and authorize the document properly. The Czech Supreme Court has ruled that simple emails lacking electronic signatures do not satisfy the written contract requirement. However, if a contract is properly signed electronically and the employee starts working, the law generally considers it a valid employment agreement.
Key Differences Between Executive and Employment Status in Czech Companies
The concurrence of positions — a company executive (statutory body member) and an employee — has been a complex legal issue in the Czech Republic. While this arrangement is common in practice, Czech courts have traditionally taken a strict stance against it, particularly when the employment role overlaps with statutory duties. Key differences include liability, work injury protection, termination rules, and severance rights. Recent court decisions, particularly the Supreme Court ruling in 2018, have somewhat relaxed the strict separation, allowing Labour Code provisions to apply to executive contracts by agreement — though key commercial law provisions still govern establishment, termination, and liability standards.
Labour Code Application to Executive Contracts in Czech Courts Ruling
The Czech Supreme Court ruled in 2018, that companies and executives may agree to apply the Labour Code to executive contracts, though the relationship remains business-law based. Key commercial law rules—such as appointment, termination, remuneration, and managerial duty—remain mandatory. Executives do not gain employee protections like notice periods or limited liability. A 2019 ruling further clarified that employment contracts signed by the same person as employer and employee are not automatically void but require case-by-case review. For more information, please visit our site The executive’s contract on performance of function governed under the Labour Code regime.
Essential Obligations for Employers in Czech Occupational Health Requirements
Czech labour law, specifically the Labour Code, the Act on Specific Health Services, and the Public Health Protection Act, requires all employers to provide occupational medical services . Employers must classify jobs into four categories based on health risk within 30 days of employment. They must also sign a written contract with an occupational doctor. This contract should outline work categories, services, pricing, and duration. Depending on the job's risk, employees must undergo mandatory medical examinations, including initial, periodic, extraordinary, final, and follow-up exams. An occupational doctor must also supervise the workplace regularly, either annually or biannually for Category 1 positions. Employers who fail to comply can face penalties of up to CZK 3,000,000.
Managing Employee Workload Shortages in the Czech Republic
Czech labour law offers several options for companies facing reduced workloads. Employers can terminate employment due to "organizational changes" with proper notice, continuing full salaries during the notice period. Alternatively, they can implement "partial unemployment" with reduced wages (at least 60% of average earnings) during temporary shortages, requiring internal regulations or union agreement. When employees cannot work due to employer issues, they are entitled to compensatory wages equal to their average earnings. Additionally, a "working hours account" system can be established for flexible hour distribution. Each option has specific legal requirements and financial implications, so companies should carefully assess their situation before deciding.
Czech Labour Code Amendment Implements EU Work-Life Balance Directive
An amendment to the Labour Code aligns it with the EU Directive on work-life balance for parents and caregivers. Existing Czech laws already surpass EU requirements. For instance, they offer 70% compensation for two weeks of paternity leave and more generous parental leave. The amendment introduces further protections. It extends nursing allowance benefits to employees on various work agreements, including small-scale employment. Unless operational reasons prevent it, employers must permit remote work for pregnant employees and those caring for children under 15 or dependents. A key change shifts the burden of proof in dismissal cases. Employers must now prove that a termination is unrelated to an employee's statutory rights. They must also provide written justification when denying flexible work requests. These changes enhance protection for parents and caregivers, improve flexibility, and reduce discrimination.
Whistle-blower Protection in the Czech Republic
In 2023, the Czech Republic introduced whistleblower protection legislation through Whistle-blower Protection Act aligning with EU Directive. The law applies to public contracting authorities, employers with 50+ employees, tax authorities, and financial entities. Employers must set up confidential reporting systems, designate a qualified person to manage whistleblowing, and protect whistle-blowers from retaliation. This protection extends to related parties, including family and colleagues. Violating these requirements can result in fines up to CZK 1,000,000, especially for retaliation or failing to establish proper reporting systems.
Withdrawal from Non-Competition Clauses by Employers in the Czech Republic
The Czech Labour Code allows employers to withdraw from non-competition clauses during the employment relationship, but a 2021 Constitutional Court ruling (Case No. II. ÚS 1889/19) changed how this is applied. Previously, case law required employers to provide a reason for withdrawal, but the Court ruled that employers can withdraw without explanation if the contract explicitly allows it. However, the Court stressed that each case must be evaluated individually, considering factors such as the timing, whether the employer acted arbitrarily, and potential abuse of rights. This ruling clarifies employer rights while ensuring employee protection.
Secret Audio and Video Recordings as Evidence in Czech Labour Disputes
In 2018, the Supreme Court ruled that secret audio or visual recordings may only be used as evidence if no other means of proof are available and if the need for a fair trial outweighs privacy protections. This exception must be applied restrictively, considering factors like the circumstances of the recording, the importance of the legal interest at stake, and whether other evidence options exist that don't violate privacy. This ruling gives employers a limited but valuable tool for proving employee misconduct in certain cases.
Czech Employee Cards for Foreign Workers
The Czech Employee Card is a combined work authorization and residency permit for non-EU nationals seeking employment in the Czech Republic. Valid for up to two years, it streamlines immigration through a single application process. Employers must first announce the job vacancy at the Labour Office for 30 days. Applicants must submit their documents to Czech embassies or the Ministry of Interior, including a passport, accommodation proof, employment contract, qualifications, and a clean criminal record. The process typically takes 60 days, after which the applicant receives a D-type visa, visits the Ministry for biometric data, and gets a Certificate of Compliance to work. The biometric card is issued 3-4 weeks later. Application fees total CZK 3,500. Employers must report employment to the Labour Office on the first working day.
Documentation Requirements for EU Companies Posting Workers to Czech Republic
Amended legislation requires EU-based employers posting workers to the Czech Republic to keep specific documentation at the local Czech workplace. This documentation must include copies of employment contracts or other agreements that establish the employment relationship. Employers must also provide written confirmation of the employment relationship. Crucially, employers must translate all these documents into the Czech language. The State Labour Inspection Office and Regional Labour Inspectorates can inspect workplaces for compliance. They may fine non-compliant employers up to CZK 500,000 (approximately €20,000). Additional rules apply to posted workers who are not citizens of the Czech Republic or another EU member state. These workers may need to show proof of legal residency from an authorized body in another member state.
Changes to Czech Labour Agency Law in 2024
The employment agency temporarily assigns its employee to perform work for a client on the basis of a written 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.
The Czech Republic has implemented significant changes to labour agency regulations in 2024. Key modifications include transferring licensing authority from the Labour Office to the Ministry of Labour and Social Affairs, increasing the required deposit to CZK 1,000,000, implementing stricter qualification standards, and enhancing employee protections through a mandatory 14-day notice period for temporary assignment terminations. Additional requirements have been introduced for responsible representatives who must now work at least 20 hours weekly and have relevant experience within the past decade. For more detailed information about these changes, please visit our post on the New changes of Czech Labour Agency Law in 2024.
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