Global Employer Services Newsletter October 2020

Stricter rules for workers posted to the Czech Republic

On 30 July 2020, the Czech Republic introduced tighter rules for posted workers in service industries, in accordance with the updated text of the relevant European directive.

The updated directive introduced the following measures as the next step towards equalising the terms and conditions between local and foreign workers and protecting more developed markets:

  • Tightening and expanding of the conditions that the employer is obliged to ensure for its employees posted to an EU Member State for the purposes of providing transnational services;
  • Time limit for short-term posting under minimum conditions for 12 months (or 18 months upon request);
  • Changes in administrative procedures and greater oversight.

Extending minimum working conditions for postings up to 12 months (short-term)

In addition to the minimum and guaranteed remuneration, including overtime rates, all mandatory components of remuneration stipulated by national legal and administrative regulations or collective agreements are now added to the minimum standard, based on the principle of "equal pay for equal work".

Compared to the previous situation, the Czech Republic will now also apply the rules for work on national holidays, night work, work in difficult conditions, or work on weekends and extra pay for work on national holidays or weekends.

Employers must also guarantee similar lodging conditions for posted workers if the workers are required to travel for their work.

Rules applicable for posting exceeding 12 months (long-term)

If the estimated duration of the posting exceeds 12 months, all working conditions of the host EU Member State are to be applied, except for conclusion and termination of employment, non-compete clauses and supplementary retirement pension schemes.

Changes in notification duty and other administrative procedures

EU laws stipulate that all EU Member States are to establish the requirement to notify authorities about postings. The Czech Republic is no exception, and requires the foreign employer to notify the Czech Labour Office about the posting no later than on the posted worker's first day of work.

As of 30 July 2020, the notification duty of foreign legal employers has been further specified in the Czech Labour Code and, in our opinion, tightened. Based on our experience, the authorities did not verify compliance with the notification obligation for very short postings and provision of services (e.g. one-day repair of a machine by a German company in a Czech company). We expect that the authorities will now monitor these situations as well.

The updated directive also requires EU Member States to strengthen their cooperation, information exchange and oversight. We therefore recommend monitoring this area even more closely.

Michala Mrazíková

Monika Lodrová