Meeting Social Rules
An entrepreneur – employer has a number of obligations toward the relevant bodies of state administration. This area is regulated by various legal regulations.
The administrative bodies with powers in the area of social security are the Ministry of Labour and Social Affairs of the Czech Republic as the supreme body, followed by the social security administration (i.e. the Czech Social security Administration, the regional social security administration, or the Prague Social Security Administration for the capital Prague).
- Ministry of Labour and Social Affairs of the Czech Republic
- Czech Social Security Administration
- Legislation related to sickness insurance of employees (in Czech language only)
- Legislation related to pension insurance of employees (in Czech language only)
- Legislation related to Social Security of Employees (in Czech language only)
- Act on Employment (in Czech language only)
- Act on Public Health Insurance (in Czech language only)
Regulation of labour relations
The Labour Code regulates the basic principles of labour relations, out of which the most important ones are the employer`s duty to provide equal treatment of employees and maintain prohibition of any kind of discrimination towards employees, including the duty to maintain the principle of providing the same wage for work of equal value.
- Labour Code(in Czech language only)
- Types and characteristics of the individual types of labour relations (in Czech language only)
- Kinds of employment (English version)
As far as employment conditions are concerned, the Labour Code regulates above all, basic standards for business and rest hours (the length and scheduling of business hours, standby hours, breaks at work, types of working hours, overtime work), vacation (types of vacation, vacation with irregular work scheduling, shortened vacation), obstacles at work and providing for vacation compensation. The Labour Code also defines the basic rules for employee remuneration, guaranteeing at least minimum wage and remuneration for travel expenses in cases of business trips. It specifically deals with the issues of compensation of damages, above all in case of injury at work and occupational illnesses.
Employees are protected by the Labour Code from unjustified termination of employment. The employer may give the employee notice only on the grounds explicitly stipulated in the Labour Code and the notice itself must be in writing.
When employment is terminated by the employer the employee is given severance pay, which is a specific form of compensation for loss of employment.
- Severance pay (in Czech language only)
Where a so-called non-competition clause has been concluded and the employment is terminated by the employer, the employee is given so-called exit pay.
On termination of an employment relationship, an employee whose employment relationship is terminated by notice given by his employer for one of the reasons laid down in section 52(a) to (c) of Labour Code 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:
- a) once his average (monthly) earnings where an employment relationship to the employer lasted less than one year;
- b) twice his average earnings where an employment relationship to the employer lasted at least one year and less than two years;
- c) triple his average earnings where an employment relationship to the employer lasted at least two years;
- d) 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 and to the procedure pursuant to section 86(4) of Labour Code. A period of an employee’s employment relationship shall also include his preceding employment relationship to the same employer provided that the time between the termination until the commencement of the subsequent employment relationship did not exceed six months.
Exit pay (in Czech language only)
Maintaining occupational safety and health
An employer is obliged to provide the employees with such conditions of occupational safety and health that are stipulated by the Labour Code, or, as the case might be, by other legal regulations.
- Occupational safety and health standards (in Czech language only)
- New regulations related to occupational safety and health (in Czech language only)
Employment of handicapped persons
Subject to observing the legal criteria, employers are obliged to employ a certain number of handicapped persons.
- Employing handicapped persons (in Czech language only)
Disputes between an employer and an employee concerning employment claims are handled and decided by the civil courts.
The validity of a termination of employment may be contested before a civil court by the employer or the employee no later than 2 months from the date on which the employment is to end.
Strikes and lock-outs are extreme means for solving collective disputes. Employees have a right to strike under the Charter of Fundamental Rights and Freedoms.
It is also possible to turn to arbitrators and adjudicators for resolving collective disputes.
- List of arbitrators and adjudicators (in Czech language only)
Companies may, based on their own initiative, reach beyond the framework of minimal requirements and accept such measures that will make them even more socially responsible.
Duty of registering with administrative bodies
When hiring staff, an entrepreneur must register new employees with the following bodies:
- the regional social security authority or the Prague Social Security Authority dealing with pension and sickness insurance
- the relevant health insurance company dealing with health insurance payments
- the tax authority dealing with relevant tax payments
The employer has an obligation to declare new employees for sickness insurance on the printed form within eight calendar days from the start of employment. A declaration for sickness insurance may also be submitted electronically by the employer via the Public Administration Portal.
- Czech Social Security Administration (in Czech language only)
- List of health insurance companies (in Czech language only)
- Information on the obligations of employers in terms of sickness and pension insurance and in terms of paying premiums for social security in the Czech Republic (partly in English)
An individual is obliged to have health insurance when he/she has permanent residence in the Czech Republic or when he/she does not have permanent residence in the Czech Republic but is an employee of an employer that has a head office or permanent residence in the CR.
Health insurance cover comes into being for a person without permanent residence on the day when that person becomes an employee in the Czech Republic or on the day he/she acquires permanent residence in the CR.
An employer has many obligations stemming from employing his/her employees. Their detailed overview can be found on the following web pages:
- Personal data protection
- Act No. 101/ 2000 Coll., on Personal Data Protection, as amended(in Czech language only)
In case of loss of employment, the person may be put on the job seeker’s register from the day on which he/she submits an employment agency application. If the application is submitted to an employment agency no later than three working days after the termination of employment, the applicant is put on the register from the day following the termination of employment. Employment agency applications must be submitted in person as the law does not allow applications to be sent by post or electronically.
In case of sickness the employee submits a benefit application, usually drawn up by a doctor, to his employer, who forwards it to the relevant local social security office. If an employee is applying for a sickness insurance benefit he must fill in the legally prescribed form published by the Czech Social Security Authority.
The following governmental and non-governmental institutions and web portals offer further information and useful services related to the area of social security and work conditions.
- Ministry of Labour and Social Affairs of the Czech Republic (in Czech language only)
- VZP – General Health Insurance Company
- Official portal for business and export
- Portal of the public administration of the Czech Republic
Programme of subsidies for employing handicapped people enables the employer to draw on financial resources or get financial and tax benefits subject to meeting legal conditions.
- Programme of contributions for employment of handicapped persons (in Czech language only)
Personalised help and advice
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