- Overview: Czech Republic
- Global HR Compliance
- Global PEO and payroll
- Work permit for hiring expats via PEO
- Expand without a company set up
- Contractor vs. employee: which is better?
Global HR Compliance in Czech Republic
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:
Drawing up a written contract is an essential aspect of establishing employment relationship in Czech Republic. An employer is required to provide his new employee with a copy of a written contract at the start of their relationship. A contract of employment must contain a clear description of the job to be performed, the expected date to start work and the place of work. Other terms of employment, though recommended may not be included in a contract. whether all the terms of contract are included in the written contract or not, a new employee should make sure to agree with the employer on all the vital details of the employment before taking up the job.
Minimum statutory employment rights
Hours of work
Czech Republic operates a normative work time of 40 hours in a week with a maximum of 12 hours in a day. Employees who do underground/mining jobs have a limited work time of 37.5 hours per week, while night shifts can only work for up to 8 hours in each 24-hour. Employees are entitled to a half-hour unpaid break after working for 6 consecutive hours and a 12-hour rest before their next shift.
The length of an employee’s trial period as per the labor law must not exceed 3 months. Probationary period can be any length up to 3 months and must be agreed upon by way of contract by both parties of employment. Probationary period can only be valid if it is set to start by the first day of the employment relationship.
There are 12 public holidays in Czech Republic on which employees are entitled to leave. Such holidays are as follows: New Year’s Day, Easter Monday, Labor Day, Liberation Day, Day of the Slavic Apostles Cyril and Methodius, Jan Hus Day, Day of Czech Statehood, Czechoslovak Independence Day, Struggle for Freedom and Democracy Day, Christmas Eve, Christmas Day and St. Stephen’s Day.
Employees who have a continuous employment with the employer and have worked for at least 60 days in a calendar year are entitled to 4 weeks of annual leave. Workers who partly fall into this category, i.e. have not worked up to 60 days are entitled to a leave proportional to the number of days they have worked. Employees on annual leave must be paid an equivalent of their average monthly pay.
All pregnant employees are entitled to 28 weeks (37 in the case of multiple births) of paid maternity leave which may be taken from 6 weeks prior to the due date. Adoptive parents are entitled to 22 weeks’ maternity leave in the case of single adoption and extra 10 weeks during multiple adoption. Women who gave birth to stillborn babies must be given 14 weeks of maternity leave. All maternity leave allowances are paid by the Social Security.
All employees are eligible for a sick leave when they feel unwell. During the first 14 days of sickness (excluding the first 3 days), the employee is entitled to 60% of average salary from the employer. After this period, sick leave is funded from social security system.
Any work performed outside the statutory work time must be treated as overtime. Overtime must not exceed 8 hours per day or 150 hours per year. An employer must not force overtime into an employee who regularly works less than the statutory working hours. In fact, an employer can only order his employee to work overtime if the situation involved is very critical. Unless otherwise agreed by the collective agreement, overtime worked during the normal workday must be compensated for at the rate of 125 percent of the employee’s normal wage. Overtime done at night or during weekends must be paid for at a rate of 110%, while work performed on any of the legal holidays must be compensated for with an equivalent time off plus the employee’s regular pay.
State minimum salary
Since 1 January 2018 the minimum salary is 12,200.00 Czech koruna ($568) per month, or 73.20 koruna ($3.4) per hour.
Either of the employment parties can terminate the employment contract under the condition that the initiator must provide a prior notice of one month period. As a rule, a notice of termination starts to count from the first day of the month succeeding the time it was given. Employees who are dismissed for the reason of serious breach of agreement or for criminal act may not be given a prior notice. Employees who wish to resign due to health-related issues or who have up to 15 days outstanding payment may proceed without giving prior notice. All terminated employees are entitled to severance pay as follows:
- One month’s average pay for employees with less than one year of service to the company
- Two months’ average pay for employees with one to two years of service to the company
- Three months’ average pay for employees with more than two years of service to the company
Acumen International can help you fast-track your possibilities of entering and expanding your business in Czech Republic by providing you with our Employer of Record services. Our unique mix of PEO/EOR solutions will enable you to jumpstart your global operations almost immediately, cost-effectively and compliantly without any requirement to set up a legal entity first or thereafter.