Forvis Mazars Payroll Newsletter 4/2025

Flexible amendment to the Labour Code – Parliamentary Document 775

The flexible amendment to the Labour Code, which was approved by the Chamber of Deputies in March 2025, represents a major step towards the modernisation of labour law in the Czech Republic. The aim of this amendment is to respond to the dynamic changes in the labour market, to increase the flexibility of labour relations and at the same time to ensure the protection of employees' rights. The amendment aims to optimise working conditions, simplify administration for employers and promote digitalisation in labour law processes.

The flexible amendment has already been approved by the Chamber of Deputies and now awaits approval by the Senate and the President's signature. According to the current state of the legislative process, it should come into force no earlier than 1 June 2025.

Here is an overview of the main changes: 

1. Employment – notice period

The notice period should continue to be at least two months. However, it should now start on the date of delivery of the notice and end on the date that coincides numerically with the date of delivery. If there is no such day in the last month of the notice period, the period will end on the last day of that month. In the event of a termination of employment for a breach of duty, the notice period may be reduced to one month. The same one-month period would also apply to employees who give notice when there is a transfer of rights and obligations between employers. In the event of an invalid termination, the employee is entitled to wage compensation and leave until the employment relationship is resolved or terminated.

2. Employment – probationary period

At present, the probationary period for regular staff is three months and for managers six months. It should newly be extended to four months for regular staff and eight months for managers. However, it will still be possible for the employee and the employer to agree on a shorter probationary period in the employment contract or to skip it altogether.

3. Fixed-term employment

The section on fixed-term employment contracts will also be amended: such contracts can now be concluded for a maximum of 3 years and can be repeated no more than twice between the same parties (including extensions). There will be no limit on the number of times an employee can be replaced during maternity, paternity or parental leave or during ordinary leave.

The total duration of fixed-term employment relationships between the same parties shall not exceed 9 years from the conclusion of the first contract. If 3 years have elapsed since the end of the previous fixed-term employment relationship between the same parties, this relationship will no longer be taken into account.

4. Employment of persons on maternity, paternity and parental leave

Employers should now be able to conclude an agreement to perform a job or work performance agreement with an employee who is on parental leave for the same work as he or she performed before taking leave.

If the mother or father returns from parental leave, the employer will be obliged to return them to their original position within two years of the child's birth. The employer will still have to assign the employee to a job according to the job description in the employment contract until the child reaches the age of three.

5. Remuneration – salary/pay for work done

An employee should now be able to receive wages, in whole or in part, in an agreed foreign currency if, for example, he or she has family abroad, commutes for work reasons, is a foreigner, or has other demonstrable ties to a foreign country.

6. Uninterrupted daily rest

In the event of accidents, natural disasters or extraordinary events, the employees' rest periods between shifts may be reduced from eight to six hours. This procedure shall be used in situations where immediate action is required in the public interest, for example when restoring electricity. The employee will be compensated for the rest the following day.

7. Delivery of wage or salary assessment

The employer will have the option of delivering the payroll/pay slip via internal electronic systems (e.g. by email, etc.), and the employee will be required to acknowledge receipt within 15 days (e.g. by clicking to acknowledge reading, replying, etc.). If no acknowledgement is made, the delivery will be considered invalid. The employee will have to be allowed to save, forward or print the assessment. The assessment will have to be signed by the employer with a recognised electronic signature. 

8. Calculation of average monthly earnings

The amendment specifies the method of calculating an employee's average monthly earnings in the event of a change in his or her weekly working hours. If the change occurs in the decisive period, the average weekly working hours are calculated by dividing the sum of the product of the individual weekly working periods (in hours) and the calendar days over which these weekly working periods were worked by the total number of calendar days in the decisive period. The result shall be rounded up to the thousandths.

The calculation of average earnings will therefore be based on the average weekly working hours, not on the working hours applicable in the period when the average earnings are determined, as has been the case until now.

The average monthly earnings are of key importance when calculating compensation and wage supplements (e.g. holiday pay, obstacles to work, severance pay, etc.). 

9. Youth

Minors aged 14 and over should newly be able to work part-time during the summer holidays with the written consent of their parents, even if they have not yet completed the compulsory school attendance. However, they will only be allowed to do light work that is not detrimental to their health, education or moral development. In addition, juvenile workers may not work overtime or at night; furthermore, juvenile workers under 15 years of age or who have not completed compulsory school attendance may not work between 8 pm and 10 pm, and their shifts may not exceed 7 hours per day and 35 hours per week.

10. Confidentiality regarding remuneration

The bill explicitly mandates that an employer may not restrict an employee from disclosing information about the amount and structure of his or her wages, salary or remuneration under the agreement. The Labour Inspectorate will supervise compliance with this rule.

11. Unemployment benefit system

The flexible amendment also introduces major changes to the unemployment benefit system – in the first two months, the unemployment benefit is increased to 80% of the average net earnings (it was previously 65%). At the same time, the maximum benefit ceiling is increased from 0.58 times the average wage to 0.8 times.

12. Initial occupational medical examinations

It also abolishes the obligation to carry out initial occupational medical examinations for employees performing non-hazardous work (known as the first category). At the same time, employers will be able to introduce voluntary programmes to promote health, which will help employees maintain and improve their health.

Author: Martina Farářová, HR & Payroll Services, Manager