Employ Candidates Compliantly in Czech Republic

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  1. Overview: Czech Republic
  2. Global HR Compliance
  3. Global PEO and payroll
  4. Work permit for hiring expats via PEO
  5. Expand without a company set up
  6. Contractor vs. employee: which is better?
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Global HR Compliance in Czech Republic

Do you have Ukrainian workers who are planning to flee to Czech Republic to escape the Russian conflict? Or have your employees already left Ukraine and arrived in Czech Republic?

Acumen International can help companies like yours, including IT, to compliantly employ your Ukrainian talent in Czech Republic within days. Acumen’s global PEO and Payroll solution helps you to legally relocate your Ukrainian personnel to Czech Republic so you can enjoy uninterrupted workflow with employees you know and trust. Our solution enables us to arrange for global payroll, and to open bank accounts for your employees. We can also provide your talent with laptops, mobile phones, and other tools they need to perform their jobs.

If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in Czech Republic Guide below will help you understand the nuances of labor legislation in the country.

Companies hire international workforce for various reasons but in most cases they are:

  • entering the foreign markets to sell company products. To do so, the company hires sales representatives who would represent their product and sell it to their local client base.
  • hiring a global talent with unique skills that is unavailable in the local market or costs the company less than the talent with similar skills hired in the home country.

Before entering a certain foreign market or engaging a global talent, it is crucial for the company to understand how it can make local hires and reward its workers on a monthly basis. Growing companies often face a challenge of paying benefits and bonuses to the commission-based independent sales representatives they are working with.

If you intend to hire and pay your foreign workforce in full compliance with labor laws and regulations of Czech Republic, then the Global Employer of Record service from Acumen International may be the best way for you to go. We are an International PEO company and we specialize in global employment, meaning we can employ your employees in Czech Republic and act as their legal employer on your behalf. We will payroll your foreign workforce monthly and provide benefits to them through our global network so you don’t have to set up your own legal entities there.

We are experts in global workforce employment in , and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.

Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.

With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Czech Republic.

See the guide below for a general overview of labor rules and regulations in Czech Republic or contact us if you need to employ workers in Czech Republic or would like to get more details.

Hiring and Firing Workforce in Czech Republic Guide

Apart from the fact that Czech Republic is a staunch EU member, it is also strategically positioned in the Central and Eastern Europe, and these constitute the reasons why it is seen as a foolproof gateway to around 502 million consumers in the region. Czech Republic has a relatively stable economy with a sophisticated infrastructure and a highly educated workforce, to mention but a few. Nevertheless, the country is still considered as one of the most difficult places to conduct business in the world. This should not scare you because a problem does not exist without a befitting solution.

All you need to do is employ the services of a locally sourced provider who knows the ins and outs of the labor law in Czech Republic. Global Employer of Record is all you need to do that.

Here are a few facts to be aware of about employment in Czech Republic:

Hiring and Firing in Czech Republic

#Employment Agreement

Indefinite duration employment contract is established if the duration of the employment relationship has not been expressly agreed.

A fixed-term employment relationship between the same contracting parties may not exceed three years and as of the date of the first fixed-term employment relationship and it may be recurrently agreed no more than twice.

A collective agreement may be concluded on behalf of employees only by their trade union organization. A collective agreement may regulate wage and salary rights and other employee rights in labor relations as well as rights or obligations of the contracting parties to the agreement. A collective agreement may be concluded by one or more employers, or by one or more employer organizations on one side and by one or more trade union organizations on the other side.

#Employment Termination and Severance Pay (Dismissal)

An employment relationship may be terminated:

  • By agreement
  • By notice of termination (when given by an employer, it is referred to as dismissal, when it is given by an employee, it is referred to as resignation)
  • By immediate termination
  • By termination within the trial period

The employee may immediately terminate his employment relationship (instant resignation) only if:

  • According to a medical certificate issued by the occupational medical services provider or under a ruling of the competent administrative agency having reviewed the medical certificate, the employee cannot perform his work (job) any longer without a serious threat to his health and the employer has not transferred the employee to perform some suitable alternative work within 15 days of the submission of such medical certificate.
  • The employer has not paid this employee’s wage or salary or compensatory wage or compensatory salary or some part of such wage or salary within 15 days of the maturity date.

The employer may immediately terminate an employment relationship only:

  • If an employee has been sentenced, under a final verdict, for a willful criminal offense to a term of unconditional imprisonment of over one year or if an employee has been sentenced, under a final verdict, for a willful criminal offense committed during performance of his working tasks, or in direct connection therewith, to unconditional imprisonment of no less than six months.
  • If an employee has breached some obligation that arises from the statutory provisions and relates to his work performance in an especially gross manner.

#It is prohibited to dismiss

It is prohibited to give notice to an employee during the protection period, namely:

  • During a period while an employee is recognized to be temporarily unfit for work (unless the employee concerned brought on this incapacity intentionally or unless it arose as an immediate consequence of his drunkenness or abuse of addictive drugs), or during a period from submission of a proposal for an employee’s treatment in a medical (health care) establishment or a spa or during a period from the start of his treatment in a medical establishment or a spa until such treatment comes to an end; if an employee suffers from tuberculosis, the protection period shall be extended by six months as of his discharge from treatment at a health care establishment.
  • If an employee is called up to take part in military exercises or extraordinary military exercises, the protection period shall start as of the date when the relevant called-up order is served on such employee and shall last during his participation in the exercises and for two weeks after the employee is discharged from the exercises.
  • During a period while an employee is fully released (from his job) to exercise a public office.
  • During a period while a female employee is pregnant or is on maternity leave or while a female or male employee is on parental leave.
  • During a period while a night worker is recognized to be temporarily unfit for night work by a medical certificate issued by the occupational medical services provider.

#Notice period

Where notice of termination has been given, the employment relationship will come to an end upon the expiry of the notice period. The notice period must be the same for both the employer and the employee and shall be at least two months. The notice period may be extended only by agreement between the employer and the employee; this agreement must be in writing. The notice period shall start to run on the first day of the calendar month following delivery (service) of the notice and come to an end upon the expiry of the last day of the relevant calendar month.

#Severance payments

On termination of an employment relationship, an employee whose employment relationship is terminated by notice given by his employer or by agreement for the same reasons is entitled to receive from the employer severance pay (redundancy payment) at least in the amount equal to:

  • Once his average (monthly) earnings where an employment relationship to the employer lasted less than one year.
  • Twice his average earnings where an employment relationship to the employer lasted at least one year and less than two years.
  • Triple his average earnings where an employment relationship to the employer lasted at least two years.
  • The sum of triple his average earnings and the amounts laid down in (a) to (c) where his employment relationship is terminated in a period when he is subject to a working hours account.

#Employee Benefits and Contributions

The most common benefits for employees in the Czech Republic are:

  • bonuses in terms of financial rewards
  • professional trainings
  • language courses and personal development
  • the option to work from home
  • additional days off (extra holidays, study leave, sick days)
  • discounts on company products
  • flexible working hours
  • meal vouchers
  • company phone
  • company car or transport allowance
  • insurance contributions
  • refreshment/beverages at workplace

Certain companies also offer temporary accommodation or housing allowances, recreation in the company’s facilities or holiday allowances, or free tickets by companies operating regular public transportation.

#Probationary period

If a probation period is agreed, it may not be longer than:

  • Three consecutive months from the date when the employment relationship commences.
  • Six consecutive months from the date of commencement of the employment relationship where it concerns a managerial employee.

A probation period may also be agreed in connection with the appointment to a top managerial position (i.e. as head of a government agency, its branch or section). A probation period may be agreed latest on the day which has been agreed as the date of work commencement or on the date stated as the date of appointment to a top managerial position (as head of a government agency, its branch or section). An agreed probation period may not be subsequently extended. However, the probation period shall be extended by the period of full-day obstacles to work due to which the employee does not perform work during the probation period and by a full-day leave of absence during the probation period. A probation period may not be longer than one half of the agreed period of the employment relationship. A probation period must be agreed upon in writing.

#Overtime

The employer may order overtime work only due to serious operational reasons, even within an uninterrupted rest period between two shifts or even on non-working days. An employee may not be ordered to do more than 8 hours of overtime work within individual weeks and 150 hours of overtime work within one calendar year.

#Work hours

The standard working week in the Czech Republic is regulated by law at 40 hours a week (42.5 hours, including a half-hour break for lunch each day) and is usually divided into five working days of eight hours (8.5 with lunch) each. The lunch break does not count as working time.

#Annual Leave

Minimum paid holidays’ entitlement

Under family circumstances or for other especially personal reasons the employee may be given a leave without pay, the duration of which is determined usually under the agreement between the employee and the employer. It is applicable upon request, but in certain cases prescribed by law. For example, the employer is obliged to provide the leave for the performance of a public office or military trainings; in other cases, it depends on the agreement with the employer.

Unpaid vacation entitlement

There is a list of events for which an employee must be granted time off. These include medical examinations, weddings and the birth of a child, as well as deaths and funerals within the immediate family. In addition, employers must grant their employees leave for the performance of work at a public office and other duties of public interest if employees cannot perform these activities outside working hours.

#Sick leave

Employers are required to pay sick employees for the total sick leave benefit of up to 14 days starting the first day.

#Parental leave

Maternity leave

Peněžitá pomoc v mateřství, a benefit more commonly known as maternity leave, is financial support in place of a parent’s salary, and is paid for 28 weeks (or for twins, triplets, etc. 37 weeks). The maternity leave period begins at least six, and at most eight weeks before the baby is due to be born. After the baby reaches 7 weeks of age, the father can take over the maternity leave instead of the mother, if he is eligible (based on the same conditions – sickness insurance).

Paternity leave

An employee can be absent from work for caring for a child younger than ten years of age and for providing care to a sick family member. Further, if an employee caring for a child under 15 years of age, or another dependent person, requests shorter working hours or some other reasonable adjustment to the weekly working hours, the employer must comply with the request, unless serious operational reasons prevent it from doing so.

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