Gender pay gap disclosure looms for Czech companies, sparking controversy

Anti-disclosure execs and politicians argue that the EU law could stir up trouble in the workplace and burden smaller firms. Staff

Written by Staff Published on 20.11.2023 13:59:00 (updated on 20.11.2023) Reading time: 2 minutes

The Czech Republic is working to implement an upcoming EU directive that will require companies to disclose employee pay scales to promote gender pay equality. However, the proposed changes have sparked heated debate between businesses, workers, and politicians.

What is the new law?

According to a recent report by Czech newspaper Právo described in, the Ministry of Labor and Social Affairs is currently drafting legislation to bring the nation in compliance with the new EU rule. Czechia has until 2025 to implement the law.

At a minimum, firms will have to provide average earnings broken down by gender for the same or comparable job roles. While the Czech Labor Code already prohibits unequal compensation for equal work, surveys continue to find gaps in what men and women earn.  

In Czechia, women earn on average 13 percent less for performing the same job title as men.

Proponents argue wage transparency is necessary to eliminate discrimination and promote fair treatment in the Czech labor market.

Why are many against it?

Businesses say that performance reviews, seniority, expertise in certain projects, and loyalty also contribute to an individual's remuneration beyond basic job titles – irrespective of gender.

Revealing specific salaries, they warn, may fuel resentment among lower earners who feel entitled to the same pay as top talent. This could hinder companies' ability to reward some employees and respond flexibly to varying employee contributions. 

As such, member of parliament for the opposition ANO party Aleš Juchelka sees the reforms as too reminiscent of past communist-era wage controls, wherein people taking on more work wouldn’t be remunerated appropriately.

Would smaller companies lose out the most?

Executives are split on the best approach if disclosure becomes mandatory. While larger multinationals presently analyze their own gender pay gaps, added reporting obligations may burden small enterprises. 

Executive director Petr Mitura of the BR Group believes that publishing average salaries for a position is adequate, but revealing the tops and bottoms of pay scales could cause tension and a lot of administrative work. 

With implementation details still under discussion, stakeholders also await the Czech unions' formal stance. As the business community pushes for careful calibration, the Ministry of Labor faces the delicate task of crafting rules that promote equity without hindering team cohesion.

Would you like us to write about your business? Find out more