Changes to Czech Employment Law: An End to Paper Sick Notes and an Upward Trend in Salary Increases

Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
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[co-author: Sabina Krajíčková]*

Although an extensive revision of the Czech labor code remains a work in progress, a number of interesting amendments to the labor code and the related legislation have been passed, which became effective on January 1, 2020.

Sick Leave

From January 1, 2020 employee sick leave must be confirmed using “e-sicknotes” only. This change simplifies the process and involves less paperwork. Employers may now receive all information on the commencement, progress, and the end of sick leave by signing into an online system of the Czech Social Security Administration. Employees must still inform their employers that they will be off sick and unable to perform their work; however, the sicknote itself is no longer handed over by the employee but directly by the Czech Social Security Administration.

Posted Workers

The Czech Republic must also implement the European Union directive bringing in changes to how employees are posted abroad, as the transposition period will expire on July 30, 2020. Under previous European Union legislation, all posted employees must receive the same working conditions as those in the posted country. This particularly applies to the minimum wage and maximum hours worked.

To comply with the new European Union directive, the Ministry of Labour and Social Affairs, among other agencies, has proposed to replace the term “wage” with the term “remuneration,” which encompasses more than just salary and includes all other statutory payments to which an employee may be entitled, such as extra pay for working weekends and overtime compensation. If an employee is posted abroad for a period of more than 12 months (or 18 months if the posting has been prolonged at the employer’s official request), the employee must receive all rights applicable in the posted country.

Minimum Wage

As is the case every year, there has also been an increase in the statutory minimum wage, this time from CZK 13,350 per month in 2019 to CZK 14,600 per month from January 1, 2020. The Chamber of Deputies of the Parliament of the Czech Republic also backed extending the statutory annual leave entitlement from four weeks to five weeks as the annual leave in the Czech Republic is one of the lowest in the European Union.

However, many companies already offered five weeks as part of their employee benefits package, and it is not unusual for employees to be given even more than five weeks annual leave. The unemployment rate in the Czech Republic is still very low, which means that employers may want to be proactive in finding ways of being more attractive to employees.

*Wolf Theiss

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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