Employment Law in Czech Republic
Employment Law in Czech RepublicUpdated on Thursday 16th January 2020
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Foreign investors who want to establish a company in Czech Republic in which personnel will be employed should be familiar with the labor legislation applicable here, as it states the relationships between the employer and employee and it establishes the main rights and obligations to which parties agree upon by signing a contract. Our Czech lawyers can provide you with assistance on the labor legislation or can represent you if you need to draft an employment contract. Also, they can help foreigners start a business in the Czech Republic.
Czech employment legislation for foreigners
Employment relationships are established under the Labor Code and it is applicable to both national and foreign entities (companies or individuals). The provisions stipulated by the Labor Code are also available if the parties involved are both foreigners, as long as the employment terms have been agreed upon in Czech Republic. At the same time, foreign entities are allowed to choose the employment legislation applicable in their home country; our lawyers in Czech Republic can provide you with further information on the labor relationships established between foreigners and local employers.
Amendments to the Czech Labor Code
The Czech government has recently introduced new regulations to the Labor Code, created to support both the employer and the employee. The employment legislation was modified on 1st October 2015 with the following provisions and several modifications until 2019:
- the government offers a 20% subsidy for the salary of the employees if the company is affected by various financial crisis and has to reduce the level of payments allocated to the employees;
- the Labor Code provides new compensations for work injuries and occupational diseases;
- the Code offers a new termination period for contracts signed between employees who are enrolled in a second job outside their primary full time job;
- the minimum wage in 2019 in the Czech Republic was set at HRK 13,350.
Who issues the work permits for foreign citizens?
Non-EU citizens who want to work in the Czech Republic must first obtain a work permit that grants legal employment in the country. This type of document has a validity of 2 years and it is issued by the Employment Office in the Czech Republic.
Hiring foreign workers in the Czech Republic
Companies interested in hiring foreign workers in the Czech Republic must observe a series of rules and regulations in matters of documents, such as:
- A certificate proving the experience of employees in a certain field;
- A valid passport and/or identification card issued in the country of origin;
- Details and documents showing the residence address in the Czech Republic;
- A clear criminal record which needs to be verified by the company’s representative when hiring foreign workers.
It is good to know that companies in the Czech Republic will act as sponsors for foreign employees. More than that, such sponsors will have to prove to the immigration authorities a copy of the work contract, financial details, and other relevant details. One of our Czech lawyers can give proper and complete legal advice to foreign citizens applying for a work permit in this country.
Contracts for employees in the Czech Republic
Foreign workers in the Czech Republic have the same employment rights as the citizens of this country. This means that the Employment Law applies in the same manner to foreign citizens who can work under a legal employment contract issued for a fixed or indeterminate period, depending on the needs and operational purposes of a company. Foreign employees are paid in agreement with the terms of the work contract, can enjoy holiday rights, maternity leave, and other important rights as stated by the Employment Law in the Czech Republic. For a better understanding of the rights you have as an employee of a firm in the Czech Republic, we recommend you talk to one of our Czech specialists. Also, if you would like to know all the legal aspects of your work contract before you sign it, feel free to solicit advice and support from our Czech lawyers.
The termination of a contract in Czech Republic
A work contract can be terminated for varied reasons, whether the employer no longer needs the services and the support of a worker or if the agreement came to an end. In special cases, a contract can be closed due to inappropriate conduct that is not accepted in the company. In this situation, according to the Employment Law in the Czech Republic, the employee involved must be notified by the company regarding the dismissal. The work contract can cease immediately by mutual agreement or the employee can work for 2 more months, as stated by the contract. The termination of a work contract can be entirely explained by a Czech attorney, with the mention that an employee found in this situation has the right for remuneration and the obligation of respecting the company policies until the collaboration is closed.
In the case of mutual agreement, this means that both employee and employer accepted the resignation in a fair and friendly manner, with no complications involved.
The workforce in the Czech Republic
The skilled workforce in the Czech Republic is highly appreciated by international investors with companies in this country. Regarding the labor costs, the Czech Republic is quite attractive from this point of view compared to other European countries. The competent, experienced and multilingual workforce in the Czech Republic is extremely appreciated by both domestic and foreign employers who offer excellent working conditions in all sectors. Foreign companies with activities in sectors like manufacturing, transportation, education, agriculture, tourism, import and export, communication or real estate can rely on the local workforce in the Czech Republic.
In terms of business and economy, the Czech Republic is found on the right path, and the following details and facts can highlight this affirmation:
- The total FDI stock for 2018 was around USD 155,024 million in 2018.
- According to the 2019 Doing Business report offered by the World Bank, the Czech Republic ranks 35th out of 190 worldwide economies.
- Austria, Luxembourg, Germany and the Netherlands are the main investment partners of the Czech Republic.
- The visa scheme for non-EU citizens allows them to enjoy a series of advantages in exchange for investments of around EUR 1,9 million.
If you need further information on the employment law in Czech Republic, please contact our team of Czech lawyers, who can provide you with assistance on this matter.