Employment Law Update in Czech Republic: Q1 2026

Czech Republic employment law has entered a period of meaningful reform. Employers operating in the country face updated obligations on working time, remote work documentation, minimum wage thresholds, and anti-discrimination enforcement. This guide covers the most significant legislative and regulatory developments affecting employment relationships in Czech Republic, explains what has changed and why it matters, and sets out the practical steps employers should take to remain compliant.

The Czech Labour Code (Zákoník práce, Act No. 262/2006 Coll.) remains the primary statute governing employment relationships. Recent amendments have introduced several changes that employers must absorb quickly.

The most consequential recent change concerns the formalisation of remote work arrangements. Following earlier amendments that first introduced mandatory written agreements for home-office work, regulators have clarified the scope of employer obligations around cost reimbursement. Employers must now maintain written records of agreed remote work conditions, including the allocation of costs for electricity, internet connectivity, and workspace equipment. The flat-rate reimbursement mechanism, which allows employers to pay a fixed daily amount rather than documenting actual costs, has been adjusted upward in line with current price levels. Failure to maintain proper documentation exposes employers to inspection findings by the State Labour Inspection Office (Státní úřad inspekce práce, SÚIP).

A second significant development relates to fixed-term contract rules. The Labour Code caps the total duration of successive fixed-term contracts at three years, with a maximum of three renewals. Recent enforcement practice has tightened around the definition of "objective reasons" that justify fixed-term arrangements beyond the standard limits. Employers relying on project-based or seasonal justifications should review their contract templates and ensure the stated reason is specific and verifiable, not a generic formula.

Third, the rules on information obligations have been expanded. Employers must now provide new employees with a broader written statement of employment conditions within seven days of the start of employment. This statement must cover, among other things, the applicable collective agreement (if any), the procedure for terminating employment, and details of any applicable training entitlements. This requirement aligns Czech law more closely with EU Directive 2019/1152 on transparent and predictable working conditions.

The Czech minimum wage is set by government regulation and is reviewed periodically. The current minimum wage level represents a meaningful increase compared to prior periods, reflecting sustained pressure from trade unions and government commitments to improve living standards. Employers must verify that all employment contracts, including those for part-time workers and workers on agreement-based arrangements (dohody), comply with the updated floor.

Beyond the statutory minimum wage, employers should pay close attention to the guaranteed wage (zaručená mzda) system. This system sets minimum pay levels by job complexity group, ranging from the base minimum for the simplest tasks to significantly higher floors for the most demanding professional roles. A common mistake among foreign employers entering the Czech market is to apply only the headline minimum wage figure without checking whether their employees fall into a higher guaranteed wage group. An employee classified in group four or above - covering, for example, skilled technical or managerial roles - must receive a wage at or above the threshold for that group, regardless of what the employment contract states.

Employers using agreements to complete work (dohoda o provedení práce, DPP) and agreements on work activity (dohoda o pracovní činnosti, DPČ) should also note that recent legislative changes have significantly altered the social and health insurance contribution rules for these arrangements. The new rules introduce an aggregation mechanism: if a worker holds multiple DPP agreements with different employers, contributions may become due once the combined income crosses a defined threshold. This has created new administrative burdens for employers who rely heavily on agreement-based workers, particularly in retail, hospitality, and logistics.

Remote work documentation requirements have become one of the most actively enforced areas of Czech labour law. The SÚIP has increased the frequency of inspections targeting remote work arrangements, and inspectors are specifically checking whether written remote work agreements are in place, whether cost reimbursement is being paid correctly, and whether employers have conducted adequate occupational health and safety assessments for home workplaces.

In practice, employers should consider implementing a standardised remote work agreement template that covers all mandatory elements: the location of remote work, the agreed working hours, the method of recording working time, the reimbursement amount or mechanism, and the employer';s right to conduct safety checks. Many underestimate the working time recording obligation. Even for remote workers, employers remain responsible for ensuring that working time limits are respected and that records are maintained. The maximum weekly working time of 48 hours (including overtime) and the mandatory rest periods set out in the Labour Code apply equally to employees working from home.

On health and safety, the Act on Occupational Safety and Health (Act No. 309/2006 Coll.) requires employers to assess risks at all workplaces, including home offices. While a physical inspection of a private home is practically difficult, employers are expected to provide written guidance on safe workspace setup, ergonomic requirements, and emergency procedures. Providing this guidance in writing and obtaining the employee';s acknowledgement creates a documented compliance record that will satisfy inspectors.

Working time flexibility has also been the subject of recent regulatory attention. The rules on flexible working time schedules (pružná pracovní doba) and individual scheduling arrangements have been clarified. Employers who use flexible schedules must define the core working period and the flexible bands in writing, and must ensure that the averaging period used for working time calculations does not exceed 26 weeks (or 52 weeks if a collective agreement permits).

If your organisation is restructuring its workforce arrangements or updating employment contract templates to reflect these changes, contact info@vlolawfirm.com. We can help structure the setup correctly the first time.

The Anti-Discrimination Act (Act No. 198/2009 Coll.) prohibits unequal treatment in employment on grounds including gender, age, disability, race, religion, and sexual orientation. Recent case law from Czech courts and the Czech Ombudsman (Veřejný ochránce práv) has reinforced the principle that indirect discrimination - where a neutral policy disproportionately disadvantages a protected group - is treated as seriously as direct discrimination.

One area of particular focus is pay transparency. Although the EU Pay Transparency Directive (2023/970/EU) does not require full national implementation until mid-decade, Czech employers are already seeing increased scrutiny of gender pay gaps. Employers with larger workforces should begin conducting internal pay audits now, documenting the objective criteria used to set salaries and identifying any unjustified disparities. This is both a risk management measure and a preparation for the formal reporting obligations that will follow directive implementation.

Parental leave rules have also seen practical clarification. Czech law provides for maternity leave (mateřská dovolená) of 28 weeks (or 37 weeks for multiple births) and parental leave (rodičovská dovolená) of up to three years per child. A non-obvious requirement that frequently catches foreign employers is the obligation to preserve the employee';s position - or an equivalent position - upon return from parental leave. If the original role has been restructured, the employer must offer a comparable position at the same or equivalent pay level. Failure to do so can constitute unlawful termination, exposing the employer to reinstatement claims and compensation liability.

Employers should also note that fathers are entitled to paternity leave (otcovská dovolená) of two weeks immediately following the birth or adoption of a child. This entitlement is funded through the social insurance system, but the employer must process the relevant documentation through the Czech Social Security Administration (Česká správa sociálního zabezpečení, ČSSZ). A common mistake is failing to inform male employees of this entitlement proactively, which can create employee relations issues and, in some cases, claims of unequal treatment.

Termination of employment in Czech Republic is heavily regulated. The Labour Code sets out an exhaustive list of grounds on which an employer may terminate an employment contract by notice (výpověď). These grounds include organisational reasons (redundancy), health incapacity, and performance-related reasons. Termination outside these grounds is unlawful, regardless of what the employment contract states.

The notice period is at least two months for employer-initiated terminations, running from the first day of the calendar month following delivery of the notice. For employees who have been employed for more than two years, a severance payment (odstupné) is mandatory in redundancy cases. The amount of severance depends on length of service: one month';s average earnings for service of less than one year, two months for one to two years, and three months for two or more years. Recent amendments have not changed these core figures, but enforcement practice has become more rigorous in verifying that the correct average earnings figure is used as the calculation base.

A practical scenario: a foreign technology company with a Czech subsidiary decides to restructure its engineering team, eliminating three positions. The company must issue written notices citing the organisational reason, observe the two-month notice period, and pay the applicable severance. If the company attempts to negotiate mutual termination agreements (dohoda o rozvázání pracovního poměru) instead, it must ensure these are genuinely voluntary - any pressure or misrepresentation can lead a court to treat the agreement as void and the termination as unlawful.

A second scenario: a retail employer discovers that a long-term employee has been repeatedly absent without authorisation. The employer wishes to terminate for cause (výpověď z důvodu porušení povinností). Czech courts apply a proportionality test: the severity of the breach must justify the sanction. A single unexplained absence is unlikely to meet the threshold for immediate dismissal. The employer should issue a written warning first, document subsequent breaches, and only then proceed to termination. Skipping the warning step is one of the most common procedural errors made by employers unfamiliar with Czech practice.

Employers must also be aware of protected categories of employees who cannot be dismissed during certain periods. These include employees on maternity or parental leave, employees on sick leave (with limited exceptions), and employee representatives during their term of office. Terminating a protected employee, even for a valid substantive reason, during a protected period renders the termination void.

What are the main risks for foreign employers who do not update their employment contracts to reflect recent Czech law changes?

Foreign employers who continue using outdated contract templates risk non-compliance with the expanded information obligation, which requires delivery of a written employment conditions statement within seven days of the start of employment. Contracts that do not reflect current remote work documentation requirements, updated guaranteed wage thresholds, or the revised DPP/DPČ contribution rules may expose the employer to SÚIP fines and employee claims. In practice, the SÚIP has increased inspection activity, and inspectors are specifically targeting documentation gaps. Employers should conduct a contract audit and update templates before the next hiring cycle.

How long does it typically take to complete a lawful redundancy process in Czech Republic, and what are the approximate costs?

A standard redundancy process takes a minimum of approximately three months from the decision to terminate to the end of the notice period, assuming notice is delivered promptly. The mandatory notice period is two months, running from the first day of the following calendar month. Severance adds a further cost of one to three months'; average earnings depending on tenure. Professional legal fees for managing a small-scale redundancy typically start from the low thousands of EUR. For larger restructurings involving collective dismissals - defined as ten or more redundancies within 30 days in smaller establishments - additional notification obligations to the Labour Office (Úřad práce) apply, extending the process by at least 30 days.

Is it possible to use fixed-term contracts as a standard hiring tool in Czech Republic, or should employers default to open-ended contracts?

Fixed-term contracts are permitted but carry significant restrictions. The total duration of successive fixed-term arrangements with the same employee cannot exceed three years, and they may be renewed a maximum of three times. Beyond these limits, the contract automatically converts to an open-ended arrangement unless an objective reason justifies an exception. Czech courts scrutinise the stated objective reason carefully, and a generic or vague justification will not withstand challenge. For roles that are genuinely ongoing, employers should default to open-ended contracts from the outset. Fixed-term arrangements are most defensible for project-specific work with a defined end date, seasonal activities, or replacement of an absent employee.

Czech Republic employment law is evolving steadily, with recent changes touching remote work, minimum wage structures, agreement-based work, anti-discrimination enforcement, and termination procedures. Employers who stay ahead of these developments avoid costly disputes and inspection findings. The key is to treat compliance as an ongoing process rather than a one-time exercise.

VLO Law Firms advises international clients on employment law matters in Czech Republic. We can assist with employment contract audits, remote work policy drafting, redundancy procedures, and compliance with updated Labour Code obligations. To request a consultation, contact: info@vlolawfirm.com