26th February 2020

Expected changes in employment law

The following changes are set to take effect on January 1, 2020:

1. “e-neschopenka” (electronic doctor’s notes) Starting next year doctors will be required to issue employees a confirmation of inability to work in electronic form only. What does this mean for employers? Employers will no longer accept receive confirmations and then send them to the district social security administration. After 14 days of inability to work employers are required to send the Czech social security administration the appendix to the request for benefits in electronic form only. Employers will now include in the appendix to the request for benefits information on whether the employee receives salary or wages. When temporary inability to work ends, employers will send a report with the data needed to make the final sickness benefit payment. Employers will be able to view detailed information on temporary inability to work for each employee at the Czech social security website. The system will offer employers automatic notifications of any changes in their employees’ temporary inability to work. However, this does not absolve employees of the obligation to inform their employers without delay of their temporary inability to work; employees who fail to do so are subject to a fine of up to CZK 20,000 (the same applies to employees who do not report the termination and duration of temporary inability to work and changes in residence in the first 14 calendar days of their illness). The new service “Data for employers on temporary inability to work” allows employers to download data on an employee’s temporary inability to work to the employer’s payroll or similar software. We recommend checking your company’s internal regulations setting employees’ specific obligations when reporting temporary inability to work to ensure that they are in compliance with the new legislation.

2. Increasing the wage reduction limit for 2020 The amount for wage compensation and subsequent sickness benefit to which the employee is entitled during temporary inability to work is calculated based on the average earnings adjusted using the reduction limits based on the general assessment base. This general assessment base is multiplied by 0.175 to determine the average earnings per hour and has been increased by the Ministry of Labour and Social Affairs for 2020 as follows: a) the first reduction limit for adjustment of the daily assessment base is CZK 1162, b) the second reduction limit for adjustment of the daily assessment base is CZK 1742, c) the third reduction limit for adjustment of the daily assessment base is CZK 3484. The increase in the reduction limit means an increase in the wage compensation the employee receives from the employer in the first 14 days of temporary inability to work. The sickness benefit pay the employee receives from the Czech Social Security Administration starting on the 15th day also increases.

3. Minimum wage As of January 2020 the minimum wage should increase from CZK 13,350 to CZK 14,600.

4. Change in parental allowance As we have written before, the Chamber of Deputies has approved an increase in the parental allowance as of January 2020 from CZK 220,000 to CZK 300,000. In the case of multiple births parents are entitled to CZK 450,000. The approved change was submitted to the Senate, which indicated that it will probably send it back to the Chamber of Deputies, as it will most likely request that the increased amount apply not only to parents collecting the allowance as of January 1, 2020, but also to those who have already collected the entire amount, such as parents who chose to collect it more quickly. Despite being returned to the Chamber of Deputies, however, the increase in parental allowance should still take effect. Another proposed change would give parents of children up to two years of age more opportunity to remain in the work force. Under the new legislation parents with a child under two who attends daycare or preschool (nursery) would meet the condition for parental allowance (full-time caregiver for a child) if the child attends for up to 92 hours in a calendar month. Current legislation allows only 46 hours.

5. Changes in the posting of workers in the framework of providing services (new EP and Council (EU) Directive 2018/957) The directives on posting workers in the framework of providing services in the EU must be transposed into Czech law no later than July 20, 2020. This will involve the following changes:

  • 1. two categories of posting workers – short-term (up to 12 months with an option to extend for six months) and long-term – this distinction has a practical impact on the labour law legislation that applies to a given employment relationship; long-term posting of employees to another EU member state is subject to the working conditions of the member state where the work is performed (with exceptions – e.g. legislation on entering into the employment agreement), and employers must now also add together the posting periods of workers in the same position and same place as the previous worker(s),
  • 2. expanding the conditions that apply to a posted worker if the conditions in the state of posting are more advantageous for the worker – posted workers must now receive all the minimum elements of remuneration; so for instance workers posted to the Czech Republic will now also receive additional pay for overnight or weekend work, which means that employers will have to take care to ensure that workers posted to another EU member state are given the same conditions as in the home member state (issues handled in collective agreements will also fall under these conditions).

Members of the American Chamber of Commerce in the Czech Republic