Table of Contents

Czech Republic

Table of Contents

Currency

Czech Koruna (CZK)

Payroll Frequency

Monthly

Employer Taxes

33.8%

About Czech Republic

The Czech Republic is a prosperous country of 10.6 million people, located in Central Europe between Germany, Poland, Slovakia, and Austria. It has one the highest GDP growth rates and lowest unemployment rates in the European Union, in spite of a relatively high dependence on exports resulting in susceptibility to volatility in demand. Czech Republic’s GDP was $215.73 billion in 2017, mostly from automobiles exports making up almost 80% of the total.

The country’s cultural groups include Czech (64.3%), Moravian (5%), and Slovak (1.4%) with Roman Catholicism as the primary religion. The Czech people enjoy socializing in neighborhood pubs, drinking their world famous Czech beer, connecting with family and friends. January 1st, 1993 is celebrated as the day of the founding of the Czech Republic, as separate from the former country of Czechoslovakia.

Employment Relationship

• Permanent Employment

Permanent employment is defined to last for an indefinite period (open-end employment relationship). An employment relationship lasts for an indefinite period unless a fixed term of its duration has been expressly agreed upon.

• Fixed-Term or Specific-Purpose Contracts

Employment relationship lasts for an indefinite period unless a fixed term of duration has been expressly agreed upon. The labor law limits the length of fixed-term contracts between the same contracting parties to 3 years. An employment relationship can be recurrently agreed to no more than twice from the date of the first fixed-term employment relationship.

• Temporary Employment Contratcs

Temporary employment refers to employees of an employment agency, temporarily assigned to an employer who hired the agency. Such employees must have a Green Card, Blue Card, or a work permit, and may not be disabled. A temporary employment agreement must be concluded in writing. The temporary assignment must terminate on expiry of the period agreed in the agreement. The employment agency must not temporarily assign the same employee for performance of work to the same user for a period longer than 12 consecutive calendar months unless it is requested by the agency employee. 

Probationary Period

The maximum probationary period cannot be longer than 3 months for regular employees and 6 months for managers. Probationary periods cannot be subsequently extended unless employees take a full day's leave of absence during the probationary period. In this case, probationary period can be extended for employees to make up the missed time.  Employers are not required to include the probationary period in employment agreements, however, it must be agreed to in writing, at the latest, on the day the work commences. 

Working Hours

The standard workweek is 40 hours. The length of a shift may not exceed 12 hours. After continuous work for 6 hours at the utmost, employees are entitled to a work break for a meal and rest lasting at least 30 minutes; an adolescent employee must be given a such break after a maximum of 4.5 hours of continuous work. Employers are required to draw up a written weekly work schedule and inform employees of the schedule or its alteration at the latest 2 weeks before the beginning of the period over which the working hours are distributed.

Holidays / PTO

• Statutory Holidays

Restoration of the Czech Independence Day/New Year – January 1 Good Friday (date subject to change, Friday before Easter Sunday) – March/April Easter Monday (date subject to change, Monday after Easter Sunday) – March/April Labor Day – May 1 Victory in Europe Day – May 8 Cyril and Methodius Day of Slavic Witnesses – July 5 Jan Hus Day – July 6 St. Wenceslas Day (Czech Statehood Day) – September 28 Independent Czechoslovak State Day – October 28 Struggle for Freedom and Democracy Day – November 17 Christmas Eve – December 24 Christmas Day – December 25 2nd Christmas (St. Stephen's Day) – December 26

• Paid Annual Leave

An employee who has performed work for the same employer for at least 60 days in one calendar year is entitled to leave for that calendar year, or a proportional amount of leave if employment did not last continuously for the entire calendar year. The standard length of annual leave is 4 weeks. For government employees, annual leave is 5 weeks. Persons employed in education and academic employees of universities are entitled to 8 weeks of annual leave. The leave accumulates gradually during the year and any unused annual leave might roll over from year to year and in accordance with the organization's policies and procedures. 

• Sick Leave

Sick employees are entitled to paid sick leave under the sickness insurance, with graduated support depending on the length of time away. During the first 3 days of illness, employees are not entitled to any compensation. From the 4th to the 14th day, the employer is required to provide wage compensation, which is 60% of the average wage of a worker. After the 14th day, employees are entitled to sickness benefits paid from the social security system. The amount of sick pay depends on the employee's salary and the number of days of temporary incapacity to work.

• Maternity Leave

In the Czech Republic, a female employee's maternity leave begins at the sixth week before the expected childbirth (the earliest it can start is at 8 weeks before the expected delivery). An employee is entitled to 28 weeks of maternity leave. If she gave birth to 2 or more children at the same time, she is eligible for 37 weeks of maternity leave. The Czech Health Insurance Fund funds maternity benefits. An employee must participate in insurance for at least 270 calendar days over the last 2 years before they take maternity leave to receive financial assistance from the fund. 

• Paternity Leave

Per the amendments to the Sickness Insurance Act in the Czech Republic, paternity leave is a sickness insurance benefit. Insured fathers are entitled to 7 days of paid leave in connection with the care of a newborn child. The benefit is paid by the Czech Sickness Insurance Fund. An employer must also grant unpaid parental leave upon a request from an employee. The entitlement to parental leave applies to the mother of a child upon the termination of her maternity leave and the father of a child from the delivery date until the child turns 3 years old.

Termination of Employment

• Notice Period

Czech Labor Code states that the minimum notice for dismissal must be at least 2 months. It is same for both employers and employees and can be extended only by written agreement. Notice period takes effect on the first day of the calendar month following service of the notice and ends on the last day of the relevant calendar month. Notice of termination with respect to an employment relationship must be in writing and state the reason for termination. For fixed-term employment, the contract expires at the end of the agreed period. However, the employer is required to provide notice of the termination at least 3 days before the event. If the employee continues working after the agreed period, and the employer is aware of the performance of the work, the employment relationship becomes indefinite.

• Severance Benefits

The Labor Code requires an employer to make redundancy severance payments if the employer either dismisses or terminates employees by agreement due to the following reasons: If the employee becomes redundant due to the decision of the employer to change activities, increase efficiency, or restructure. If the employer's undertaking relocates or closes down. Depending on the duration of the employment relationship, the amount of severance pay can be up to 3 times the employee's average monthly earnings. Employees are entitled to receive severance pay in the amount of at least 12 times their average earnings: If they are terminated because they are not allowed to perform their current work due to an industrial injury, an occupational disease, or due to the threat of an occupational disease. If their workplace has been subjected to a maximum permissible level of some harmful exposure.