Belgian vs. Czech Employment Law:

Expanding your business into the Czech Republic offers access to a highly skilled workforce and competitive labor costs, but navigating the local legal landscape presents significant challenges. For Belgian companies hiring in the Czech Republic, understanding the key differences in Czech employment contracts is crucial. This guide provides specific answers from an English-speaking lawyer in Prague to help you avoid costly fines and legal disputes. 

Need advice on this topic? Contact the ARROWS law firm by email office@arws.cz or phone +420 245 007 740. Your question will be answered by "Mgr. Vojtěch Sucharda", an expert on the subject.

The Employment Contract: Navigating Critical First Steps

The employment contract is the cornerstone of your relationship with your Czech employees. While both Belgium and the Czech Republic are EU members, their approaches to contract formation differ dramatically. What is standard practice in Brussels can be a source of major legal trouble in Prague.

Is a Written Contract a Necessity? The First Compliance Trap

In the Czech Republic, the answer is an unequivocal yes. The Czech Labour Code mandates that every employment relationship must be documented in a written Employment Contract (Pracovní smlouva). This is not a mere formality; it is a high-stakes compliance gate. Failure to provide a written contract is a serious offense that can result in fines of up to CZK 10,000,000 from the labour inspectorate.

This stands in stark contrast to Belgian law, where an open-ended employment contract can, in principle, be verbal. A Belgian manager might assume that basic EU harmonization applies here, but that assumption is incorrect and dangerous. 

The Czech requirement for a written contract containing, at a minimum, the type of work, place of work, and start date, is absolute and rigorously enforced. Overlooking this fundamental difference can jeopardize your entire Czech operation from day one.

The Probationary Period: Your Most Important Strategic Tool

One of the most significant strategic advantages for employers in the Czech Republic is the probationary period (zkušební doba). While not mandatory, it is a highly recommended tool that must be agreed upon in writing within the employment contract. It allows either party to terminate the employment for any reason, or no reason at all, without the need for a notice period.

This is a powerful risk-management tool that Belgian employers are no longer accustomed to, as trial periods were largely abolished in Belgium in 2014. A recent amendment to the Czech Labour Code, effective from June 2025, extends the maximum probationary period to four months for regular employees and eight months for managerial staff. 

This legal difference should fundamentally alter your hiring risk assessment. It enables a more dynamic talent acquisition strategy, allowing you to evaluate a candidate's fit and performance over a prolonged period with a low-cost, no-fault exit option.

Fixed-Term vs. Indefinite Contracts: Understanding the Limits

Both jurisdictions regulate the use of fixed-term contracts to prevent abuse, but the Czech rules are particularly prescriptive. A fixed-term contract in the Czech Republic cannot exceed a total of three years and may only be repeated or extended twice between the same parties. After this, the relationship is automatically considered an indefinite-term contract.

This "three times and you're in" rule means that careful tracking is essential to avoid unintentionally creating a permanent employment relationship. While an exception exists for replacing employees on long-term leave, such as maternity or parental leave, the general rule is strict. 

Belgian law also requires fixed-term contracts to be in writing before work commences to avoid them being deemed open-ended, highlighting the need for formal precision in both countries.

FAQ – Legal tips about essential contract clauses

• What language should the employment contract be in?
  While Belgian law has strict language rules based on the region of employment, Czech law requires contracts to be in the Czech language. For foreign employees, a bilingual version is standard practice to ensure full understanding. However, the Czech version will always prevail in a legal dispute. Need a compliant bilingual contract? Contact us at office@arws.cz.
• Can I include a non-compete clause?
  Yes, but the Czech Labour Code imposes strict conditions. The clause can last for a maximum of one year after employment ends, and you must pay the former employee monthly financial compensation equal to at least 50% of their average monthly earnings for the entire duration. Improperly drafted clauses are unenforceable. Get expert help drafting your non-compete clauses by emailing office@arws.cz.

Managing Your Workforce: Daily Operations and Compliance

Establishing a compliant contract is only the first step. Day-to-day management of your Czech workforce requires ongoing attention to local regulations, particularly concerning working hours and overtime, where differing standards can lead to unexpected costs and administrative penalties.

Working Hours and Overtime: A Costly Oversight

At first glance, the Czech system appears favorable. The standard work week is 40 hours, compared to the typical 38 hours in Belgium. The mandatory pay premium for overtime in the Czech Republic is a minimum of 25% of the employee's average earnings, significantly lower than the 50% (or 100% on Sundays/holidays) common in Belgium.

However, a critical detail often missed by foreign employers lies in how salary is structured. The Czech Labour Code allows for an employee's salary to be agreed "inclusive" of a certain amount of overtime (up to 150 hours per year for regular staff, or up to 416 hours for managers).

If this provision is not explicitly and correctly drafted into the employment contract, the perceived labor cost advantage vanishes. Without this clause, you are legally obligated to pay the 25% premium for every single hour of overtime worked, potentially leading to significant unplanned expenses and employee disputes.

Risks of Non-Compliance with Working Time Regulations

Risks and Penalties	How ARROWS Helps
Fines from the State Labour Inspectorate for exceeding overtime limits or incorrect record-keeping. Penalties can reach hundreds of thousands of CZK.	Preparation of internal company policies to ensure your time-tracking and overtime approval processes are fully compliant. Get tailored legal solutions by writing to office@arws.cz.
Employee Disputes and Litigation over unpaid overtime premiums, leading to back-pay awards, legal fees, and reputational damage.	Contract drafting or review to correctly structure salary agreements, including provisions for "inclusive" overtime to prevent future claims. Need legal help? Contact us at office@arws.cz.
Reduced Employee Morale and Productivity due to perceived unfairness or burnout from unmanaged overtime, impacting your business operations.	Professional training for management on Czech Labour Code obligations, ensuring your local managers understand and apply the rules correctly. For immediate assistance, write to us at office@arws.cz.

The End of the Relationship: Termination Rules and Procedures

Terminating an employment relationship is the highest-risk area for foreign employers in the Czech Republic. The system is rigid, the grounds for dismissal are narrow, and the consequences of procedural errors are severe.

Dismissal in the Czech Republic: The 'Just Cause' Hurdle

Unlike legal systems that allow for more flexibility, at-will termination does not exist in the Czech Republic. An employer can only dismiss an employee by issuing a Termination Notice (Výpověď) for a limited set of reasons explicitly defined in Section 52 of the Labour Code. These reasons primarily fall into three categories:

1. Organizational changes (e.g., the business is closing, relocating, or the employee becomes redundant).
2. Health reasons (the employee is medically unable to perform the work).
3. Breach of duties or poor performance by the employee.

For poor performance, the law requires that the employer first issue formal written warnings giving the employee a chance to improve. This contrasts with the Belgian system, where an employer must also have a valid reason but the concept of "patently unfair dismissal" allows for broader judicial interpretation. In the Czech Republic, the burden of proof is squarely on the employer to demonstrate that the dismissal fits perfectly within one of the prescribed statutory categories.

Notice Periods and Severance Pay: Key Financial Differences

The financial implications of termination also differ significantly. The statutory notice period in the Czech Republic is a standard two months. A major 2025 amendment (the "flexinovela") changes the start date of this period from the first day of the following month to the day the notice is delivered, speeding up the process considerably. The amendment also introduces a shorter, one-month notice period for certain performance-related breaches.

Severance pay (odstupné) is mandatory only for dismissals due to organizational or health reasons. The amount is based on the employee's length of service: one month's salary for less than a year of service, two months' for one to two years, and three months' for over two years. 

This is far more predictable and generally less costly than in Belgium, where notice periods scale dramatically with seniority—potentially exceeding a year—and severance is often paid as a large indemnity in lieu of this long notice period. The recent Czech reforms make the termination process not only cheaper but also operationally more efficient than what Belgian firms are used to at home.

Risks Associated with Improper Employee Termination

Risks and Penalties	How ARROWS Helps
Invalid Termination Lawsuit. An employee can challenge the dismissal in court within two months. If successful, the court can declare the termination invalid.	Legal opinions on the validity of your intended termination grounds before you act, assessing the risks and recommending the safest course of action. Do not hesitate to contact our firm – office@arws.cz.
Court-Ordered Reinstatement and Back Pay. The court can order you to reinstate the employee and pay salary compensation for the entire period of the dispute, potentially capped at 6 months' pay.	Representation in court or before public authorities to defend your company against wrongful dismissal claims and minimize financial exposure. Our lawyers are ready to assist you – email us at office@arws.cz.
Mandatory Severance Pay Obligations. Failure to pay statutory severance in cases of redundancy or health-related dismissal leads to further financial penalties and legal action.	Drafting legally required documentation, such as termination agreements that correctly state the legal grounds to ensure severance obligations are met and to limit future claims. Get tailored legal solutions by writing to office@arws.cz.

FAQ – Legal tips on the dismissal process

• Can I just pay an employee to leave without a notice period?
  Payment in lieu of notice is not permitted with a unilateral termination notice in the Czech Republic. However, you can achieve a similar outcome by signing a mutual termination agreement with the employee, which includes financial compensation. For assistance drafting such an agreement, email us at office@arws.cz.
• What is a "collective redundancy" and do special rules apply?
  Yes. If you dismiss a certain number of employees within 30 days for organizational reasons, it qualifies as a collective redundancy. This triggers mandatory notification and consultation duties with the Labour Office and any employee representatives, with strict timelines that must be followed. Need help managing a restructuring? Contact us at office@arws.cz.

The Financial Framework: A Comparison of Social Security Burdens

A key component of your operational budget will be social security contributions. While the headline rates may appear similar, the total burden on the employer is slightly higher in the Czech Republic, a fact that must be factored into your financial planning.

Employer Contributions: Planning Your Czech Payroll

As of 2025, employers in the Czech Republic contribute a total of 33.8% of an employee's gross wage. This is composed of 24.8% for social security and 9% for health insurance. In Belgium, the employer's contribution is lower, at around 27% of the employee's remuneration.

This difference of approximately 6.8 percentage points is significant, but a deeper analysis reveals another crucial factor. As of July 2025, Belgian employer social security contributions are calculated on remuneration capped at EUR 85,000 gross per quarter for high earners.

The Czech system generally does not have a similar cap on the employer's portion. This means that for highly compensated executives or specialists, the actual cash cost difference for the employer could be substantially more than the headline percentage suggests, a critical detail for accurate financial modeling.

The Critical Pre-Employment Hurdle: Hiring Foreigners in the Czech Republic

For any foreign company, the administrative process of registering employees is the first and most urgent compliance challenge. Recent legal changes in the Czech Republic have significantly raised the stakes, transforming minor administrative oversights into major offenses with severe penalties.

Avoiding "Undeclared Work": The New Reporting Imperative

A recent amendment to the Employment Act creates a new legal offense called "undeclared work". Previously, employers had until the end of an employee's first day to report their hiring to the Labour Office. The new rule is absolute: you must now complete this reporting before the employee begins their first day of work.

This is not a simple deadline change; it is a fundamental shift in enforcement. The government has weaponized this administrative requirement, attaching a fine of up to CZK 3,000,000 for non-compliance. This means your company's very first interaction with the Czech regulatory system is a pass/fail test with immediate and punitive consequences for failure. Procedural perfection is no longer an aspiration; it is a non-negotiable requirement.

Risks of Non-Compliance in Hiring Foreign Nationals

Risks and Penalties	How ARROWS Helps
Fine for "Undeclared Work" up to CZK 3,000,000 for failing to report a foreign employee to the Labour Office before their first day of work.	Legal consultations to prevent inspections or penalties, ensuring all reporting obligations are met before deadlines. For immediate assistance, write to us at office@arws.cz.
Fine for "Illegal Work" up to CZK 10,000,000 for allowing a foreigner to work without the correct permit (e.g., Employee Card, Blue Card).	Help with obtaining licenses or regulatory approvals, managing the entire application process for Employee Cards and other necessary work permits. Need legal help? Contact us at office@arws.cz.
Ban on Hiring Foreigners and other administrative restrictions, severely impacting your ability to staff your Czech operations.	Drafting documentation to prevent fines and penalties, including preparing all necessary forms and supporting documents for the Labour Office and Ministry of Interior. Our lawyers are ready to assist you – email us at office@arws.cz.

Your Strategic Partner in Prague: How ARROWS Ensures Your Success

The complexities of Czech employment law present clear risks: invalid contracts, costly wrongful dismissal lawsuits, and massive fines for simple administrative errors. Navigating these challenges successfully requires more than a standardized template; it demands expert local knowledge combined with an understanding of international business needs.

What’s Your Next Step?

As an international law firm operating from Prague, European Union, ARROWS offers the perfect blend of deep local expertise and a global mindset. Our experience supporting over 150 joint-stock companies and 250 limited liability companies gives us unparalleled insight into the challenges you face. Through our ARROWS International network, built over 10 years and active in 90 countries, we are adept at handling complex cross-border matters.

We provide a full suite of services to ensure your compliant entry and continued success in the Czech market, including expert contract drafting, creation of internal policies, representation before authorities, and professional training for your local teams.

Protect your investment and ensure a smooth start in the Czech Republic. For a consultation on your specific hiring needs, contact our expert team today at office@arws.cz.

FAQ – Most common legal questions about hiring in the Czech Republic

1. Can I use my standard Belgian employment contract in the Czech Republic?
   No. A Belgian contract will not comply with mandatory provisions of the Czech Labour Code, such as the required written form, specific content, and rules on probationary periods. Using it would expose you to significant legal and financial risks. To have a fully compliant Czech employment contract drafted, contact our specialists at office@arws.cz.
2. What is the single biggest legal mistake foreign companies make when hiring here?
   The most dangerous mistake is underestimating the rigidity of Czech termination laws. Attempting to dismiss an employee for reasons not explicitly listed in the Labour Code often leads to invalid termination lawsuits, reinstatement orders, and significant financial penalties. Avoid this costly error by seeking our legal advice at office@arws.cz.
3. How long does it take to get the necessary permits for a non-EU employee?
   The process for obtaining an Employee Card or Blue Card can take several months and involves coordination with multiple authorities, including the Ministry of the Interior. Delays are common, so it's crucial to start the process well in advance of the planned start date. Let us manage this complex process for you; write to us at office@arws.cz.
4. Are non-compete clauses enforceable in the Czech Republic?
   Yes, but only if they meet strict conditions: a maximum duration of one year post-employment and a mandatory monthly compensation of at least 50% of the employee's average earnings. Many companies draft unenforceable clauses. Ensure yours is legally sound by consulting with us at office@arws.cz.
5. What documents must I have available at the workplace for an inspection?
   You must have copies of documents proving the existence of the employment relationship (i.e., the employment contract) readily available at the workplace. For foreigners, this also includes copies of their work and residence permits. Failure to do so can result in fines up to CZK 500,000. For a full compliance check, contact our firm at office@arws.cz.
6. How can ARROWS help me train my local HR team on Czech labour law?
   ARROWS provides professional training for management and HR staff, complete with certificates. We can tailor a program to your specific needs, covering everything from hiring and contracts to performance management and termination, ensuring your team operates with confidence and compliance. To schedule a training session, email us at office@arws.cz.