Doing business in the Czech Republic: Staff welfare
05 April 2012by Ina Dimireva -- last modified 05 April 2012
This guide outlines the social rules and employment legislation in the Czech Republic.
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Legal requirements
Social rules
Non-discrimination, equal treatment and gender equality
Non-discrimination, equal treatment and gender equality issues are regulated by the Labour Code which sets out the rules on:
- working time and rest time
- holidays
- compensation for damages (mainly through work injuries or work-related diseases).
The legal framework for protection against discrimination in employment is provided by the Act on Anti-Discrimination.
Employers with more than 25 employees on the payroll must employ persons with physical disabilities. These persons should account for 4% of the overall workforce.
An employer has the option of creating for these persons a protected workplace or a protected workshop.
Employing persons with a disability
Health and safety at work
According to the Labour Code, the employer must ensure the health and safety of employees at work and provide the necessary protective work conditions, clothing and drinks.
New regulations relating to health and safety at work
Sickness insurance is intended for employed persons and the aim is to provide these persons with financial payments in periods when they lose their income from employment e.g. for reasons of sickness, maternity or caring for a member of the household.
The Act on Pension Insurance sets out the right to a basic mandatory pension scheme covering cases of old age, invalidity and death of a breadwinner.
The Act on Employment regulates the operation of state employment policies, the aim of which is to achieve full employment and protection against unemployment.
The Act on Public Health Insurance regulates public health insurance and the scope and terms of health care provision and the method of stipulating prices and allowances in respect of medicines and foodstuffs for special therapeutic purposes that are covered by health insurance.
Act on Public Health Insurance
Labour law
Contract law
Information on employment and contracts of employment is available on the following links:
Employment relations
Employment relations are regulated under the following basic rules:
The basic rate of the minimum wage is CZK 7,955 a month or CZK 48.10 per hour.
The basic working week must not exceed 40 hours.
The employer must provide the employee with a break of at least 30 minutes after a maximum of 6 hours of work. Young employees must be provided with such a break after a maximum of 4.5 hours of work.
The employer may instruct the employee to work overtime only for serious operational reasons. Overtime may not exceed 6 hours per employee per individual week or 150 hours per calendar year.
Types and characteristics of the individual types of employment relations
Employment protection
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.
The notice period is at least two months.
When employment is terminated by the employer the employee is given severance pay, which is a specific form of compensation for loss of employment.
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.
Disputes
Disputes between employer and 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
Mandatory social rules complete the requirements related to managing staff.
Businesses are free to go beyond the minimum social legal requirements at their own initiative.
Administrative procedures
Social insurance
When hiring staff, you must register them 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 of the start of employment. A declaration for sickness insurance may also be submitted electronically by the employer via the Public Administration Portal.
Sickness insurance - obligations
In the Czech Republic, persons have health insurance when they have permanent residence in the Czech Republic or when they do not have permanent residence in the Czech Republic but are employees of an employer that has a head office or permanent residence on the Czech republic.
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 Czech Republic.
List of health insurance companies
In case of loss of employment you will be put on the job seekers' register from the day on which you submit an employment agency application. If you submit an employment agency application no later than three working days after the termination of employment you will be 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.
Resources
Information on employment and contracts of employment are available on the following links:
The following governmental and non-governmental organisations and web portals offer further information and useful services relating to social security and work conditions.
Ministry of Labour and Social Affairs of the Czech Republic
BusinessInfo.cz - official portal for business and export
On the website of the Czech Social Security Authority, useful information is available concerning pensions, sickness insurance and social security insurance.
Czech Social Security Administration
Programmes
Subsidies exist for employers taking on a person with a disability. Providing the employer meets the necessary legal conditions, he/she may gain certain financial benefits and tax reductions.
Source: European Commission
