January 1st 2025, saw the rollout of further "flexible amendments" to The Czech Republic's Labour Code. These changes were introduced to align with the needs of employers and employees whilst addressing prevailing trends in the Czech labour market. These amendments aim to encourage greater flexibility in the labour market and alleviate some of the strict provisions of the country's labour code by adjusting key employment regulations. Understanding these changes is essential for recruitment agencies and businesses engaging with contract workers in the Czech Republic. In this article, we will discuss the recent amendments and how they will impact the international contract workers in the Czech Republic.
Key Amendments to the Czech Labour Code:
Several changes have been listed under the country's labour code amendments. These include:
- Greater Flexibility in Working Hours: Amongst the most significant of the "flexible amendments" is the increased flexibility and scope for employees and contract workers in setting their working hours. Under this new change to the law, workers will have more control over their working schedules, provided a mutual agreement with their employer is reached and the average weekly working hours are met within a specific timeframe(up to 26 or 52 weeks, depending on whether a collective bargaining agreement has been confirmed). It is essential to note that such agreements between the worker and their employer/hiring organisation must be established in writing and should account for the conditions of the working agreement/contract. In addition to these changes, the organisations involved should ensure that their agreement does not conflict with the labour code requirements, that records of working hours are maintained accordingly, and that the agreed schedules do not disrupt operational requirements.
- Adjustments to Fixed-Term Employment: Amongst the changes are amendments that will allow for more significant provisions for workers on parental leave. Under the Czech labour code, a fixed-term employment contract is limited to two renewals (i.e., it can only be renewed twice). However, the new amendments introduce an exemption to this rule: This exemption means the renewal limitation no longer applies when an employee replaces another on maternity or parental leave on the condition that the contract relationship's maximum duration of nine years remains unchanged.
- Employment Agreements for Parental Leave Workers: Under the flexible amendments to the labour code, more changes are related to workers on parental leave. Under the current version of the labour code, employees are not permitted to hold multiple contracts with the same employer for the same type of work. However, one of the listed flexible amendments lifts this restriction for employees on parental leave, allowing them to enter into work agreements outside their existing employment contract, even if the type of work is the same as the one outlined in their employment contract. This amendment provides additional earning opportunities for parents seeking contract work while enabling businesses to retain skilled workers.
- Expanded Employment Opportunities for Public Sector Employees: Similarly, the amended legislation permits select public sector employees to serve as members of the governing bodies of businesses. This change creates opportunities for professionals to contribute their expertise to the governance of other organisations while maintaining their role in the public sector.
- Amended Probation Duration & Termination Provisions: Amongst the flexible amendments are changes to the duration of the probationary period and changes to the termination procedure and notice duration.
- The flexible amendments to the labour code will see the probation period extended by one month from 3 months to four for regular employees, while this period will be extended by two months from six months to eight for managerial workers.
- Amongst the flexible amendments are changes aimed at simplifying termination grounds related to employee health. Under the existing code, there are separate provisions and grounds for termination based on the employee's health (general illness, occupational accidents or diseases). Under the new amendments, these categories are to be merged to reduce confusion over which grounds should be utilised.
- Another notable change is the reduction of the notice period for termination under specific grounds, such as employee misconduct. For termination cases within these grounds, the notice period has been shortened from two months to one month. Moreover, the timing of the notice period has changed. Instead of the previous practice of the notice of termination beginning on the first day of the month following after the notice was served, it will now begin immediately upon delivery of the termination notice. This, in turn, will mean that employers can end a contract with workers found to have displayed misconduct quickly.
- Changes in Wage Payment Regulations: Among the most significant flexible amendments to the labour code are changes relating to wages.
- Under the new changes, the existing practice of wages being paid at the workplace in cash is being terminated. Previously, employees had to explicitly consent to receive wages via wire transfer rather than cash. The updated law removes this requirement, allowing employers to deposit wages directly into employees' bank accounts by default. Additionally, under the new amendments, the circumstances under which wages can be paid in foreign currencies are broadened to include a broader faction of foreign workers and people with a "foreign element". In the past, these provisions were only available to employees who worked overseas. The new amendments pave the way for greater payment flexibility and opportunities for international contractors working in the Czech Republic.
- Another significant amendment relating to workers' wages is the minimum wage indexation mechanism. Under this amendment, the Czech minimum wage will be linked to the projected average wage rather than being set on an annual basis by decree of the government. This means that in 2025, the minimum wage will constitute 42.2% of the average wage. As we advance, a regulation outlining the updated percentage that the minimum wage is anticipated to reach concerning the average wage will be published on a bi-annual basis by the government. This amendment hopes to ensure a more reflective income for minimum-wage workers.
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Need help navigating ever-changing local labour laws?
Navigating international labour laws can be complex, particularly when managing contract workers and cross-border employment. Compliance with regulatory changes is essential when engaging contract workers abroad. Failure to ensure compliance can result in severe penalties for all stakeholders in the chain. Safeguard your operations against non-compliance risks and stay ahead of labour law changes by partnering with a compliance solutions provider like 3C Global.
Your trusted compliance partner in the Czech Republic:
At 3C Global Group, we specialise in global compliance solutions for recruitment agencies, businesses and the contract workers they hire and engage internationally.
Whether you're a contractor looking to work in Germany, a recruiter placing contractors, or a business looking to engage skilled talent, our expert team are on hand to help!
At 3C Global, we offer end-to-end solutions tailored to your needs!
We offer a wide range of services in the Czech Republic, including:
- Global Payment Solutions (GPS)
- Agent of Record (AOR)
- International Contractor Management (ICM)
- International Contractor Compliance Audit (ICCA)
- Advisory, Consulting & Training (ACT)
Our services are meticulously designed to remove potential risks and uncertainties associated with launching new projects, allowing all parties to focus on their core business objectives, knowing that their contracts and practices are fully compliant.
Why choose 3C Global Group?
- In-depth local knowledge: Our team demonstrates an in-depth understanding of local labour laws and the nuances of the updated Labour Leasing Act. We ensure our team is up-to-date with regulatory changes to help you navigate compliance seamlessly.
- End-to-end support: From drafting compliant employment contracts to managing payroll and supporting your HR needs, we handle multiple aspects of workforce management. We aim to let you focus on your business while ensuring your organisation is fully compliant.
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Ready to take the next step in your contract talent journey in the Czech Republic?
Whether you are looking to engage and place contractors quickly, compliantly and competently or if you are looking to pursue your next contract opportunity in the Czech Republic, our expert team are on hand to help you and guide you through the process.
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