Country Information

The Czech Republic (sometimes known informally as Czechia) is in the heart of Europe, bordering Germany, Austria, Slovakia, and Poland. It was united with its neighbor Slovakia in a single country, Czechoslovakia, from 1918 until 1993, when Czechoslovakia peacefully split into two separate countries. The Czech Republic developed quickly, earning investment-grade credit ratings from the major rating agencies by the mid-1990s, the first formerly Communist country to reach this milestone. The Czech people have long been known for their mechanical skills and engineering proficiency, and today vehicle production is the largest industry in the country, accounting for 26% of the country’s manufacturing output, 24% its exports, and over 9% of its GDP. Machinery, glass, and chemicals are among the country’s many other industries. Efforts are also underway to diversify the economy and continue the expansion of the country’s growing service sector.

Employment Contracts

Employment contracts must be written and contain the employment agreement. Employers can hire employees on a full-time employment contract. Part-time employment contracts must specify the hours to be worked. Fixed-term contracts are capped at three years and cannot be renewed more than twice. Seasonal and casual employment contracts are for a specified short period of time.

Working Hours

The standard work week is 40 hours. The workday is capped at nine hours. Overtime is capped at eight hours a week or 150 hours a year and is paid at 125% of the standard rate.

Sick Leave

Employees receive sick leave at 60% pay for up to 380 days and they also receive benefits from sickness insurance from the 15th day of illness. Employees receive seven days of so-called attendance allowance to care for a relative or 30 days to look after an unhealthy child.

Maternity/Paternity Leave

Female employees receive 28 weeks of maternity leave at 70% pay with at least six weeks before the birth, if they have 270 days of service in a year. Male employees receive one week of paternity leave at 70% pay. The paternity leave can start six weeks after the birth, but male employees are eligible for the leave if there is written agreement with the mother that says the employee will care for the child.

Compensation

The Czech Republic has a minimum wage. Bonuses are common with a customary 13th month bonus paid as well as performance-based compensation.

Vacation Leave

Employees receive four weeks of paid annual leave, although this can be extended in a collective bargaining agreement. Some salaried employees receive five weeks, and teachers receive eight weeks. Beginning on January 1, 2021, the Czech Republic began calculating employees’ exact leave entitlement in hours. Under the previous law, employees were eligible to take the full amount of annual leave after 60 days of employment.

Public Holidays
  • New Year’s Day
  • Good Friday
  • May Day
  • Liberation Day
  • Cyril and St. Methodius
  • Jan Hus Day
  • Statehood Day
  • Independence Day
  • Freedom and Democracy Day
  • Christmas Eve
  • Christmas Day
  • Second Day of Christmas/St. Stephen’s Day
Health Insurance Benefits

Both employers and employees contribute to healthcare.

Employment / Termination / Severance

The probation period is three months and notice period is two months. Severance pay depends on years of service and can be increased through a collective bargaining agreement. Employers can terminate employment through mutual consent. The parties must agree an end date and the employer must provide a written reason. Employers can terminate employment by providing written notice with a reason. If there is no written reason, the termination is not valid. Employees can terminate their employment with immediate effect if they provide clear written reasons. Employers can terminate employment when casual work or a project is completed.

Local Laws & Regulations

We understand that local laws and regulations change and sourcing an accurate reference guide is not easy. Our data is researched and verified by our team of local international Employment Attorneys, HR and Benefit Professionals and Tax Accountants through our Atlas team and consultants, to ensure information up-to-date and accurate.

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Partnering with Atlas when expanding into Czech Republic, can dramatically reduce the standard brick and mortar processes of doing business in foreign markets and allow you to focus on what you do best, growing your company! To discover more about how Atlas can simplify your ability to expand globally, please feel free to contact us.
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