Employer of Record Guide in 

Czech Republic

Annual Leave (Vacation)

• Standard entitlement: Minimum 4 weeks (20 working days) per year
• Enhanced entitlement: 5 weeks (25 working days) for employees over 33 years or with university education
• Accrual: Leave accrues monthly throughout the employment year
• Carry-over: Unused leave must generally be taken by June 30 of the following year
• Payout: Unused leave must be paid out upon termination

Sick Leave

• Employer responsibility: First 3 days unpaid (employer may choose to pay)
• State sickness benefit: From day 4 onwards, paid by social security
• Duration: Up to 380 days for the same illness
• Benefit rate: 60% of daily assessment base from days 4-30, then 66%
• Medical certification: Required from day 3 of absence

Maternity Leave

• Duration: 28 weeks (37 weeks for single mothers, 31 weeks for multiple births)
• Timing: Can begin 6-8 weeks before expected due date
• Benefits: Paid through social security at 70% of daily assessment base
• Job protection: Position must be held open during leave

Parental Leave

• Duration: Until child reaches 4 years of age
• Eligibility: Available to either parent (not simultaneously)
• Benefits: Parental allowance paid by the state (amount varies by chosen duration)
• Flexibility: Can be taken part-time with employer agreement

Other Statutory Leave

• Paternity leave: 1 week within 6 weeks of birth (paid by social security)
• Care leave: Up to 9 days per year for family care (unpaid)
• Study leave: For work-related education (paid)
• Civic duties: Time off for voting, jury duty, etc.

Summary

Termination Types

Termination by Employer:

• With notice: Standard termination requiring notice period
• Immediate termination: For serious breaches (gross misconduct)
• During probation: Reduced notice requirements

Termination by Employee:

• Resignation: Employee-initiated with notice
• Immediate resignation: In cases of employer breach

Notice Period Requirements

Notice periods vary based on employment duration and who initiates termination:

Special circumstances:

• Redundancy: 2 months notice regardless of tenure
• Health reasons: 2 months notice
• Immediate termination: No notice required (serious misconduct only)

Severance Pay

Severance pay is required in specific termination scenarios:

Calculation basis: Average monthly earnings over the last 12 months

Probationary Periods

• Maximum duration: 3 months for standard positions, 6 months for managerial roles
• Notice during probation: 3 days for either party
• No severance: Generally not required during probation

Final Pay Requirements

• Timeline: Final salary and benefits must be paid on the last working day
• Components:
  • Outstanding salary
  • Unused vacation pay
  • Any applicable severance
  • Expense reimbursements

Legal Protections

Protected categories (termination restrictions):

• Pregnant employees and mothers with children under 3
• Employees on sick leave or maternity/parental leave
• Employee representatives
• Employees approaching retirement age

Anti-discrimination laws protect against termination based on:

• Gender, age, race, religion
• Sexual orientation
• Disability
• Trade union membership

National Public Holidays

Czech Republic observes the following public holidays:

Holiday Pay Rules

• Eligibility: All employees are entitled to public holiday pay
• Rate: Regular daily wage (no premium required)
• Working on holidays:
  • Premium pay required (typically double time)
  • Alternative day off may be provided
• Holiday falling on weekend: No substitute day provided

Regional Variations

Czech Republic does not have regional public holidays. All statutory holidays apply nationwide.

Required Documentation

Employment Contract Requirements:

• Job title and description
• Salary and benefits
• Working hours and location
• Notice periods
• Probationary period (if applicable)

Employee Documentation:

• Identity verification: Valid ID or passport
• Social security number: Required for payroll
• Tax information: Tax residence declaration
• Bank details: For salary payments
• Health insurance: Proof of coverage
• Work permits: For non-EU citizens

Legal Compliance

Work Authorization:

• EU citizens: No work permit required
• Non-EU citizens: Work permit and residence permit required
• Blue Card: Available for highly skilled workers

Background Checks:

• Criminal record check: Permitted for relevant positions
• Employee consent: Required for all background checks
• Data protection: Must comply with GDPR requirements

Contractual Elements

Mandatory clauses:

• Probationary period: Up to 3 months (6 for managers)
• Confidentiality: Protection of business information
• IP assignment: Ownership of work-related intellectual property
• Non-compete: Limited scope and duration (max 1 year)

Data Protection Compliance

• GDPR compliance: All employee data handling must comply
• Consent requirements: Explicit consent for data processing
• Data retention: Clear policies on data storage and deletion
• Cross-border transfers: Special requirements for data outside EU

Implementation Timeline

Worker Classification

Czech labour law distinguishes between employees and independent contractors:

Employees:

• Work under employer direction and control
• Entitled to all labour law protections
• Employer withholds taxes and social contributions
• Receive paid leave and benefits

Independent Contractors:

• Operate independently with minimal supervision
• Invoice for services provided
• Responsible for own taxes and social security
• No entitlement to employee benefits

Misclassification risks: Significant penalties and back-payment of contributions if contractors are reclassified as employees.

Collective Bargaining

• Union presence: Moderate unionisation rate across industries
• Collective agreements: Can override standard labour law provisions (usually favourably for employees)
• Consultation requirements: Employee representatives must be consulted on certain business decisions
• Strike rights: Legal but subject to procedural requirements

Cultural Workplace Norms

Communication style:

• Direct but polite communication preferred
• Formal address (using titles) common initially
• Punctuality highly valued

Work-life balance:

• Standard business hours: 8:00 AM - 5:00 PM
• Lunch breaks: Typically 30-60 minutes
• Vacation timing: Many take extended summer holidays

Professional development:

• Continuing education valued
• Language skills (especially English) important
• Technical certifications respected

Remote Work Considerations

Legal framework:

• Home office agreements required for regular remote work
• Employer must provide necessary equipment or reimburse costs
• Health and safety obligations extend to home offices
• Working time regulations still apply

Tax implications:

• No special tax treatment for remote work expenses
• Cross-border remote work may create tax complications
• Social security obligations remain with Czech employer

What Borderless AI Handles

When you hire through Borderless AI in Czech Republic, we manage:

• Contract creation: Compliant employment agreements in Czech
• Payroll processing: Monthly salary payments and tax withholdings
• Social security: Registration and contribution payments
• Compliance monitoring: Ongoing adherence to labour law changes
• Local representation: Acting as the legal employer entity
• Employee support: HR guidance in local language and timezone