Are you ready for the minimum wage increase?
The Czech government has approved another increase in minimum wage; as of 1 January 2016 the minimum wage will rise to CZK 9 900 per month, an increase of 7.6% from CZK 9 200. This will translate to CZK 58.70 per hour which is approximately EUR 370 per month or EUR 2 per hour.
In addition to the increase to minimum wage, the minimum guaranteed wage levels will also be increased. The minimum wage is provided only for the lowest level workers, whereas more complicated work is subject to a higher wage based on the respective guaranteed wage level. There are 8 levels based on the complexity of work, the highest level will enjoy CZK 19 800 per month (approximately EUR 740) from 1 January 2016.
The Czech government has indicated that the minimum wage will be increased regularly in the coming years.
What if I don’t comply?
It is important to note that if employers do not pay at least the minimum wage or minimum guaranteed wage, employees may claim compensation to the value of mandatory wage levels. In addition, the State Inspection Authority may impose penalties up to CZK 2 000 000 (approximately EUR 74 000).
The new governmental regulation including all 8 guaranteed wage levels is available (in Czech only) here.
For further information or to discuss how the increase will affect your employees, please contact Tereza Erényi on +420 221 430 111, PRK Partners.
Content is for general information purposes only. The information provided is not intended to be comprehensive and it does not constitute or contain legal or other advice. If you require assistance in relation to any issue please seek specific advice relevant to your particular circumstances. In particular, no responsibility shall be accepted by the authors or by Abbiss Cadres LLP for any losses occasioned by reliance on any content appearing on or accessible from this article. For further legal information click here.
Circular 230 disclosure
To ensure compliance with requirements imposed by the IRS and other taxing authorities, we inform you that any tax advice contained in this article (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.