If you have moved, whether permanently or temporarily, to the Czech Republic to work, you have certainly come across the local specifics of employment. Compared to the USA, for example, employees in the Czech Republic are provided with much greater protection, offset by higher taxes. Therefore, in this article I will focus on 7 specific peculiarities of work in the Czech Republic.
Work Agreement, Agreement to Perform a Job and Contract for Work Activity
The basic problem is to understand the contracts, on the basis of which the work will be performed. By default, a work agreement is concluded, since it guarantees all employee benefits, such as entitlement to vacation, paid overtime, the possibility of dismissal only for legal reasons, and additionally with notice period. In practice, however, an agreement to perform a job and contract for work activity are also concluded. However, these are optimal rather for small-scale work because they are limited in scope (in the case of an agreement to perform a job to 300 hours per year and in addition, in the case of a contract for work activity, a condition of maximum 20 hours per week). The advantage is that at lower earnings no taxes are payable (for agreement to perform a job up to CZK 10,000), a significant disadvantage is that the employee is not provided with any protection and so can be dismissed literally day to day, moreover, he/she is not entitled to holiday.
Length of the Trial Period
The law implies that the conclusion of a work agreement is followed by a period of three months, when both the employee and the employer can terminate the employment without any notice period. This is called a trial period, which can be arranged for managers for up to 6 months. Then it is possible to terminate the employment only for legal reasons, as detailed in the next point. However, the trial period can be arranged shorter or not at all.
Dismissal for Legal Reasons Only
The protection of employees in the Czech Republic is manifested mainly by the reasons of the notice itself. These are the reasons why the employer is entitled to dismiss the employee. The employee himself can give notice for any reason. The reasons of dismissal are breach of employee’s duties, cancellation of employer, redundancy and others.
Tax Return
Unlike the United States, for example, employees do not have to file a tax return as it is submitted by the employer. On the other hand, an employee must file a tax return when he has multiple jobs at the same time.
Calculation of Net Wage
Generally, when wages are negotiated, only so-called gross wages are mentioned. This means a pre-tax wage. If an employee wants to find out how much he/she eventually gets into a bank account, he/she needs to deduct approximately 30%. Alternatively you can use any wage calculator to get exact number. Paradoxically, however, the gross wage does not indicate the amount of money that the employer must spend on employees. This is the so-called super-gross wage, which is higher than the gross wage. The employer’s total cost (super-gross wage) and the resulting wage (net wage) differ by more than 40%. This makes the Czech Republic one of the countries with the highest labor taxation in the world.
Overtime and Work on Weekends/Holidays
In principle, overtime is paid. They are not paid only if it is already stipulated in the work agreement that the wage is negotiated in such amount due to overtime. Overtime work alone should be ordered only in exceptional cases and to a maximum of 150 hours per year and 8 hours per week. For overtime work, employees are entitled to a supplement of 25% of the standard wage. Alternatively, he or she may choose to compensate for unpaid leave.
For work on Saturdays or Sundays, employees are only entitled to a 10% surcharge in addition to the standard wage. When working on public holidays, employees are entitled to compensatory paid time off and, in addition, standard wages for work performed.
Maternity and Parental leave
The legislation is relatively favorable also for parents of newborn children. After giving birth, the female employee is entitled to a 28-week leave, at birth of 2 or more children a 37-week leave. This holiday is called maternity leave. The contribution is 70 percent of the average gross monthly income for the last year.
Maternity leave is followed by so-called parental leave, which can be taken by the father, not just the mother. Parental leave lasts up to child’s age of 3 years, but it is also possible to choose a shorter range. A shorter range does not mean any financial difference, as a flat-rate allowance is paid for parental leave, which is then spread over the period of parental leave.
Would you like to ask about anything or do you need consultation? Feel free to contact me anytime.
