News - Czech Republic

Czech Republic - September 2014

2015 changes to Czech employment law

From 1 January 2015, changes to Czech employment law will have a significant impact on employers' record keeping obligations and administrative offences.

Workplace record keeping simplified

From 2015, employers will only be required to keep workplace records of employment for those employees who are not registered with the Social Security Authority – i.e. employees who work under an ‘agreement to perform work’ (a special employment agreement which limits the scope of work to 300 hours per year), as well as any new employees not yet registered for social security.  For all other employees registration with the Social Security Authority will be considered sufficient proof of legal employment.  Failure to comply with the new regulations will incur fines of up to CZK 500,000 (approx. EUR 18,000).

New penalties for administrative offences at work

From 2015, it will become an administrative offence for workers to exceed the maximum weekly or annual hours permitted under ‘agreements to perform work’ and ‘agreements for performance of work activity’ (special types of employment agreements other than regular employment contract).  A penalty of up to CZK 2,000,000 (approx. EUR 72,000) may be imposed.

In addition, the minimum penalty for concealed employment (performance of employment activity with an individual misrepresented as an independent business relationship) of CZK 250,000 (EUR 9,000) has been abolished by constitutional court and is expected to be reintroduced at the amount of CZK 50,000 (EUR 1,800).

Commentary

Whilst the new regulations will simplify the record keeping process for employers, companies may wish to check their processes for recording working hours to ensure that they are compliant with the new regulations.

For further information or to discuss any of the issues raised, please contact Mr Daniel Vejsada or Ms Tereza Erényi on +420 221 430 111 at PRK Partners.- www.prkpartners.com.

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