How major changes to the Czech Labor Code could close the pay gap and improve remote work

Clearer guidelines for remote work, full disclosure of salaries in job advertisements, and steps to close the gender pay gap are just some of the changes to the Labor Code that should come into effect this year. The minimum wage has also gone up slightly for some categories of work.

While the change to the minimum wage was previously approved, the other changes are still pending. An amendment to the Czech Labor Code was approved by the government before Christmas, and will now go before the parliament. If passed, the changes, many of which would bring the Czech laws in line with new European Union directives, could go into effect later this year. Here is an overview of what is likely to change in 2023.

In the Czech Republic, women earn about 17 percent less than men on average. In the same positions for comparable work, they earn 10 percent less in companies and 5 percent less in the public sector, according to the proposed amendment, as reported by ČTK.

One of the major points of the 80-page amendment to the Labor Code is a call for equal remuneration for women and men. The amendment still needs the approval of parliament and the president, but if passed it could take effect later this year.

The measures are based on the European Union directive on equal pay for equal or equivalent work. Negotiations to the regulation were one of the Czech Republic's tasks during its EU presidency. Before Christmas, the Council of the European Union and the European Parliament reached a political agreement on the matter.

The employer's obligation to provide information in job advertisements would be expanded to require employers to include earnings in job advertisements. Confidentiality clauses about not disclosing wages or salary should also be abolished.

“Remuneration structures are opaque. Applicants are often not informed of the amount of salary before starting work,” the proposed amendment said. “Employees lack sufficiently clear information about systems, policies, and rules of remuneration in companies and organizations,” it added.

Other pending changes to the Labor Code would also change work performance agreements and work activity agreements. Contract work would become closer to traditional full-time work.

Among the new benefits for contract workers is the right to take a vacation. In order to qualify, a contract worker must maintain a working relationship with an employer for at least 28 days a year.

If the amendment passes, contractors will also have the right to bonus pay for holiday, weekend, or nighttime work, or for working in challenging work conditions. Contract workers would also be entitled to leave of five working days per year to care for a family member. Employers will also be required to put weekly working hours in writing so contractors know their schedule at least one week in advance.

The coronavirus pandemic made remote work commonplace in the Czech Republic. A legal amendment that will implement a European Union directive aimed at maintaining a healthy balance between work and personal should be implemented by August.

Employees taking care of a child under 15 or pregnant employees will also have the option to work from home. If logistical reasons or the nature of the work makes remote work impossible, the employer must justify it in writing.

The Czech government proposal calls for the employer to reimburse its people working from a home office a flat rate of CZK 2.80 for each hour of work to cover the employee's costs for gas, electricity, water, and waste. The stated amount will be tax deductible and should be adjusted every year.

The government aims to create better conditions for pre-retirement or retirement-age workers with a new amendment to the Labor Code. From July 23, when an employee reaches the age of 55, he or she could pay less social insurance, increasing their net earnings before retirement.

The proposal will also help seniors who already receive an old-age pension but at the same time work or run a business.

In some of the more demanding professions, the retirement age can be reduced by up to five years. This applies particularly to paramedics and company firefighters.

Other changes have already taken effect. The minimum wage for the least skilled level of work has increased by CZK 1,100 per month as of the start of January. This means that no one should receive less than CZK 103.80 per hour of work and in total should not earn less than CZK 17,300 per month when working full-time.

The minimum guaranteed wage for the highest level of work as the head of a business or in the financial sector, is now CZK 34,600. Guaranteed pay for other categories between the least and most skilled work, though, remained the same as in 2022.