Hiring guide in Czechia

What should I know about hiring in Czechia?

Hiring employees in Czechia can be a rewarding experience, but you should know some essential things before you begin the process. The Czechia is a member of the European Union, meaning it has implemented EU labour laws, including regulations on working hours, minimum wage, and paid leave. 

In addition, Employment contracts must be in writing and include information about the position, salary, working hours, and duration of the contract. It is also essential to know that there are different types of employment contracts, such as fixed-term or indefinite contracts, and that the duration and termination of each type of contract are regulated by law. 

Finally, it is crucial to consider the benefits and social security obligations when hiring in the Czechia. Employers are required to provide benefits such as sick leave, paid vacation, and parental leave.

Why is Czechia a good choice for finding remote employees?

The Czechia has an excellent remote workforce because of its highly educated and skilled workforce, with many universities and technical schools producing graduates in different fields. 

Secondly, Czechia is well-connected to the rest of Europe, with high-speed internet and modern telecommunications infrastructure. This makes it easy for remote employees to work from anywhere in the country and stay connected with their colleagues and clients across the globe.

Finally, Czechia’s strong work culture emphasises professionalism, reliability, and a strong work ethic. This means that remote employees from the Czechia are likely to be highly motivated and committed to delivering high-quality work.

How can Native Teams help you hire in Czechia?

Native Teams can provide assistance with recruitment, compensation and benefits administration, and regulatory compliance in accordance with Czech law. Using our Employer of Record services, we can make your benefits and pay structure more competitive and appealing to new hires.

Hire your first Czech employee with Native Teams.

Legal requirements for hiring in Czechia

When hiring new employees in Czechia, it’s important to follow the labour laws in the section below to ensure a compliant hiring process.

Legal framework

Types of employment contracts

In Czechia, there are two types of employment contracts: indefinite and fixed-term. A fixed-term employment relationship between the same parties cannot exceed 3 years from the start date of the initial fixed-term contract and may be renewed a maximum of 2 times. Each extension of a fixed-term employment relationship is considered a renewal. If 3 years have passed since the termination of the previous fixed-term relationship, this period is not factored into the duration of subsequent fixed-term contracts.

In addition to distinguishing between indefinite and fixed-term employment contracts, Czech labour law recognises various types of contracts based on the nature and duration of the work performed. 

These include full-time and part-time contracts, as well as Dohoda o provedení práce (DPP) (Job Performance Agreement) and Dohoda o provedení činnosti (DPČ) (Activity Performance Agreement). Each contract type has specific conditions and regulations tailored to meet different employment needs.

Content of an employment contract

Before concluding an employment contract, the employer must inform the individual about the rights and obligations arising from the contract, as well as the working conditions and remuneration. The employer must also clarify any obligations stemming from other legal provisions related to the employment contract’s subject matter.

The labour contract must include the type of work the employee will perform for the employer, commonly referred to as the job title, the location or locations where the employee will carry out their duties, and the date the employee is expected to commence work.

Withdrawal from the employment contract is permitted only after the employee has started working. The employer may withdraw from the contract if the employee fails to begin work on the agreed date without a valid reason or if the employee does not communicate the reason for their absence to the employer within 1 week.

Download a free employment contract for Czechia through Native Teams.

Oral, written or electronic employment contracts

Employers are required to inform employees in writing and to sign a written employment contract before employment begins. Any changes or withdrawals to the contract must also be documented in writing, just like the original employment contract. Both parties have the right to receive a copy of the signed contract.

According to a ruling by the Czech Supreme Court, the written form of legal proceedings mandates that the document must be in writing and signed by the relevant parties.

Probationary period

Without a written agreement, the probation period is deemed invalid.

The maximum duration for a probation period is 3 months for standard employees and 6 months for managerial employees. For fixed-term employment contracts, the probation period cannot exceed half of the agreed term of employment. It is important to highlight that the established probation period cannot be extended once set.

During the probation period, either party has the right to terminate the employment immediately, without any notice period. This provision enables both the employer and the employee to evaluate the suitability of the employment arrangement without the limitations of a notice period.

Working hours

A standard working week consists of 40 hours, typically spread over 5 days with 8 hours per day. However, specific employee groups have different maximum weekly working hour limits based on the nature of their work.

For example, workers involved in underground operations related to the extraction of coal, ore, and other non-metallic raw materials, as well as those engaged in mine construction and geological exploration, work a maximum of 37.5 hours. This also applies to employees working in a 3-shift or continuous shift pattern. For those in a 2-shift pattern, the maximum increases slightly to 38.75 hours per week.

Moreover, workers under 18 years of age are limited to a maximum of 40 hours per week, stipulating that daily working hours must not exceed 8 hours.

Night work

Night work refers to work conducted during the night, specifically between the hours of 10 PM and 6 AM.

A night worker’s shift cannot exceed 8 hours within any 24-hour period. If operational constraints make this impossible, the employer must arrange the standard weekly working hours so that the average shift length does not surpass eight hours over a maximum of 26 consecutive weeks. The average shift length for a night worker is calculated based on a 5-day working week.

Breaks and types of leaves

According to legal regulations, minimum rest periods, including lunch and break times, are not classified as part of working hours and are therefore unpaid. Employees are entitled to a rest period of at least 30 minutes after 6 hours of uninterrupted work.

The distribution of working hours must guarantee that employees have at least 11 hours of rest between the end of one shift and the beginning of the next within a 24-hour period. Moreover, working hours should be arranged to ensure that workers receive at least 35 hours of uninterrupted rest each week.

Annual leave

Full-time employees in the private sector are entitled to a minimum of 4 weeks of paid annual vacation, which equals 20 working days per calendar year. In contrast, public sector employees have a slightly greater entitlement, with at least 5 weeks of vacation.

Public holidays

The Czech Republic observes 15 public holidays each year. With the exception of Good Friday and Easter Monday, the dates for these holidays are fixed annually. 

The public holidays include New Year’s Day, Restoration of the Czech Independence Day, Good Friday, Easter Monday, Easter Sunday, Labour Day, Liberation Day, Saints Cyril and Methodius Day, Jan Hus Day, St. Wenceslas Day (Statehood Day), Independence Day, Struggle for Freedom and Democracy Day, Christmas Eve, Christmas Day, and the Second Day of Christmas.

Salary

As of 2024, the minimum wage stands at CZK 18,900 per month or CZK 112.50 per hour, applicable to employees with the lowest qualifications. This wage is categorised into 8 levels, which are based on qualification requirements, responsibilities, and job difficulty. As the rank increases, the guaranteed wage also rises.

For instance, Rank 1 has a monthly wage of CZK 18,900, while Rank 2 is set at CZK 19,500. Rank 3 offers CZK 21,300, Rank 4 provides CZK 21,800, and Rank 5 is CZK 24,100. For Rank 6, the wage is CZK 26,600, Rank 7 is CZK 29,400, and Rank 8 reaches CZK 37,800 per month.

To calculate the salary and taxes in Czechia, click here.

Sick leave

An employee is entitled to compensation from their employer in case of a temporary disability that makes them unfit for work, such as due to illness. This covers first 14 calendar days of that disability. During this period, the employee receives compensation equal to 60% of their average daily earnings, which is paid entirely from the employer’s funds.

If the disability lasts beyond 14 days, the state compulsory insurance system takes over responsibility for providing sick pay for the remainder of the disability period. The compensation rates are structured as follows: 60% of the reduced average daily earnings per day is provided until the 30th day of disability, 66% from the 31st to the 60th day, and 72% from the 61st day onward.

Parental leave

A female or male employee may request parental leave from their employer, in accordance with legal requirements, for as long as they wish, up to a maximum age of 3 years for the child.

In the Czech Republic, the right to maternity and parental leave is not limited to biological parents. This entitlement also extends to male and female employees who take on responsibility for a child under certain circumstances. Such circumstances include when an employee cares for a child as a substitute for parental care or when they take custody of a child whose mother has passed away.

Paternity and maternity leave

A female employee is entitled to 28 weeks of maternity leave for the birth and aftercare of a newborn child. In the case of multiple births, such as when a female employee gives birth to 2 or more children simultaneously, the maternity leave entitlement is extended to 37 weeks.

If the child is stillborn, the female employee is entitled to 14 weeks of maternity leave.

Under the Sickness Insurance Act, a male employee is entitled to 2 weeks of paternity leave, which generally must be taken within the first 6 weeks following the birth of the child. Recent changes to paternity leave regulations, effective April 2024, allow male employees to take this leave in 2 non-consecutive blocks of 1 week each, instead of a single continuous block. This leave must be taken within the first year after the child’s birth or adoption, rather than within the first 6 weeks as previously required.

Methods of employment termination

Employment relationships can be terminated in several ways, including by mutual agreement, notice of termination, immediate termination, or termination during the trial period. For fixed-term employment relationships, termination occurs automatically at the end of the agreed period.

For foreign citizens or stateless persons, the employment relationship terminates under specific circumstances unless it has already ended by other means. These circumstances include the date when the foreign citizen’s or stateless person’s stay or residence permit is revoked based on a final ruling, the date when a judgment imposing expulsion from the Czech Republic becomes legally effective, and the expiration of the individual’s work permit or long-term residence permit issued for employment purposes, including those requiring high qualifications.

Ordinary dismissal by employer

Notice of termination for an employment relationship must be provided in writing. Employers can only give notice to an employee for a specific reason outlined in the Labour code while employees may terminate their employment for any reason or without providing a reason.

When an employer issues a notice of termination, the reason must be clearly specified to prevent any confusion with other potential reasons, and this stated reason cannot be changed afterwards. Withdrawal of a notice of termination is only permitted with the other party’s consent, and both the withdrawal and the consent must be documented in writing.

Once the notice of termination is given, the employment relationship will end upon the expiry of the notice period, which must be the same for both the employer and the employee. The notice period can only be extended through a written agreement between the two parties.

The notice period begins on the first day of the calendar month following the delivery of the notice and concludes on the last day of that calendar month.

Notice period and challenging the dismissal

The legal minimum notice period for terminating an employment relationship is 2 months, starting on the first day of the calendar month following the date of the termination notice. The parties involved in an employment contract can agree to a longer notice period, provided it is the same for both the employer and the employee.

Initially, the employee must promptly inform the employer that they wish to continue their employment. “Promptly” generally means within a few days to a maximum of a few weeks. If the employee provides this notice, the employment will continue. However, if the employee fails to send or personally deliver such notice, the employment relationship will terminate at the end of the notice period.

Rights and obligations of unemployed individuals

Unemployment benefits are available only to individuals registered as jobseekers. To qualify for these benefits, applicants must have accumulated at least 12 months of insurance periods through employment or other forms of gainful activity, including reserve periods. It is important to note that individuals receiving old-age pensions are not eligible for unemployment benefits.

Eligible jobseekers include EU citizens residing in the Czech Republic who are not currently employed, engaged in commercial activities, or self-employed. Registered jobseekers are permitted to work, as long as their monthly income from such activities does not exceed half of the minimum wage.

Severance pay

Severance pay is calculated based on the duration of the employment relationship with the employer. If the employment has lasted less than 1 year, the severance pay is equivalent to 1 month’s average earnings. The severance pay amounts to twice the average earnings for employment lasting at least 1 year but less than 2 years. If the employment duration is 2 years or more, the severance pay equals 3 times the average earnings.

In addition, the period of employment includes any previous employment relationships with the same employer, as long as the interval between the end of the previous relationship and the beginning of the subsequent one does not exceed 6 months.

Prohibition of competition

A non-compete agreement is a type of contract between an employee and an employer. This agreement stipulates that the employee must refrain from engaging in any gainful activity that is identical to or competitive with the employer’s field for a specified period of time, which cannot exceed 1 year after the termination of the employment contract.

Not all employees can be bound by a non-compete agreement. Such an agreement may only be established with an employee if the employer can reasonably demand it, considering the nature of the knowledge, know-how, and working or technological procedures acquired during the employee’s time with the employer. Plus, any withdrawal from the non-competition agreement must be documented in writing and made before the employment contract is terminated.

Intellectual property rights

In the Czech Republic, when an employee invents something during their employment, the right to the patent automatically transfers to the employer unless otherwise specified in the contract. The employer must exercise this right within a designated period—typically within 3 months from the date the inventor notifies them of the invention.

In contrast, the situation is different for work created by contractors. Contractors grant a license to the client for the work they produce. Unless otherwise agreed, contractors retain the right to license the work to others as long as this does not conflict with the client’s legitimate interests. This arrangement allows contractors to continue benefiting from their work while also protecting the rights and interests of the client.

Employee data privacy

In employment relations, there is an essential exchange of information stemming from both national labour laws and the specific needs of employers based on their activities. Personal confidentiality during employment is not absolute, and the processing of personal data may not always require explicit consent from employees.

Labour legislation offers limited guidance on the boundaries of employer control over personal data. For employers, best practices include implementing a transparent privacy security policy that is accessible to all employees. 

This policy should outline the types of employee personal data collected and processed, the purposes of the processing, authorised personnel with access, the voluntary or mandatory nature of data provision, the consequences of refusing to provide data, data retention periods, methods of data deletion after these periods, employee rights regarding data protection, possible data transfers abroad and their necessity, as well as contact details for a data protection officer if one is appointed.

Remote working policy

The transition to remote work necessitates a written agreement with the employee, which can either be incorporated into the employment contract or formalised in a separate document. While the Labour Code does not impose strict requirements for such agreements, they can be relatively straightforward. Employers have the flexibility to unilaterally define the specific conditions for remote work through internal company policies.

Importantly, the Labour Code includes a provision that allows remote workers to plan their working hours independently, in agreement with the employer. As a result, the general regulations governing the determination of working hours do not apply to these employees. This means that employers are not required to specify the start and end times of shifts or to schedule working hours.

Responsibilities within a remote work arrangement

There are no laws that impose additional responsibilities on employers for employees who work from home beyond those outlined in the regular Labour Code. The obligations applicable to all employees working on the employer’s premises also apply to those working from home. For instance, employees must adhere to established work time regulations that remain in effect. To fulfil some of these obligations, employers may require input from their remote employees, particularly regarding matters like timesheets.

Health and safety at home

Employers are responsible for ensuring occupational health and safety and may be held accountable if an employee suffers an injury while working from home.

The specific health and safety measures employers must implement depend on the unique circumstances of each case. Employers should take into account the distinctive aspects of remote work and modify their practices accordingly. For example, employees working from home should be provided with guidance on how to properly set up their workstations and should receive health and safety training tailored to remote work conditions.

What are the advantages of hiring employees from Czechia vs other countries?

Compared to Western European countries like Germany, France, or the UK, labour costs in Czechia are significantly lower. This allows businesses to benefit from high-quality talent without the higher salary expectations found in more developed markets.

As part of the EU, hiring employees from Czechia means businesses avoid many of the legal and administrative hurdles associated with hiring from non-EU countries. Czech workers can move freely across borders, simplifying mobility.

On top of that, Czechia shares many cultural similarities with Western European countries, making it easier for businesses to integrate Czech employees into global teams.

Why use Native Teams for hiring in Czechia?

Native Teams lets you employ team members ‘like a local’ meaning you get all the benefits of a global team, wherever you are based. Here are the reasons why you should use Native Teams for hiring:

• No paperwork: We will handle all the necessary paperwork for you.
• Save on taxes: We help you handle your taxes.
• No company set up: You can expand your business using our company entitles.
• Online onboarding: We’re here to ensure your onboarding process is trouble-free.
• No accounting: We will handle all of your accounting needs, including invoicing, payroll, and more.
• Increase your profit: We assist you in growing your business and maximizing your profits.
• Compliance expertise: we can assist your company in navigating the regulatory environments and ensure you meet all relevant requirements.
• Local support: We can assist you in understanding and complying with the relevant local laws.