How non-EU Businesses Should Approach Hiring in the Czech Republic: What to Know When Hiring

When you hire employees in the Czech Republic, you cannot simply transfer your home-country employment practices. The Czech Labour Code establishes mandatory minimum standards that apply to every worker regardless of nationality. Understanding these requirements before hiring is essential, as mistakes lead to substantial fines, hiring delays, and legal disputes.

The Czech Labour Code: Your non-negotiable legal foundation

The Czech Labour Code forms the bedrock of all employment relationships in the country. As a non-EU employer, you cannot bypass or modify its core requirements simply because your company is based abroad. Unlike jurisdictions where employment terms are freely negotiable between parties, Czech law establishes mandatory protections that apply universally.

This distinction is critical regarding liability. What works in your home country will not work here, and assumptions based on your domestic legal framework can expose your company to significant liability.

The Labour Code recognizes three primary types of work relationships. First, there is the standard employment contract, which is the most common arrangement and offers the highest level of employee protection.

Second, there is an Agreement to Complete a Job (DPP – Dohoda o provedení práce), typically for temporary work, and the Agreement to Perform Work (DPČ – Dohoda o pracovní činnosti).

Each relationship type carries different legal implications, tax treatments, and compliance obligations. The differences are not minor technicalities but fundamental legal distinctions that affect everything from social security contributions to termination procedures.

The legal landscape continues to evolve, with recent amendments introducing stricter requirements for hiring foreign workers and updated fiscal obligations. In 2026, employers must navigate updated minimum wage levels and strict digital reporting obligations for foreign employees.

The lawyers at ARROWS Law Firm regularly navigate these regulations on behalf of both Czech and foreign employers, and understand how these rules apply in real-world hiring scenarios.

microFAQ – Legal tips on Czech labour law foundations

1. Can I negotiate my own employment terms that differ from the Labour Code?

No. The Labour Code establishes non-negotiable minimum protections. Any contract clause that reduces protections below the legal minimum is void and unenforceable. However, you can offer more favorable terms than the minimum.

2. Do the Labour Code rules apply to my foreign employees?

Yes, completely. Once a worker performs labor on Czech territory under your control, Czech employment law applies regardless of their nationality or where you sign the contract. The only exceptions are for posted workers from other EU countries under specific cross-border service rules.

3. What happens if my employment contract doesn't include all required elements?

The contract may be deemed invalid or legally defective, and the employment relationship exists in legal uncertainty. This creates exposure during Labour Office inspections and can result in administrative fines for the employer.

Employment contracts: Getting the documentation right from day one

Every employment relationship in the Czech Republic must be documented in a written employment contract without exception. This is not a suggestion or best practice; it is a legal requirement with no flexibility. Many foreign employers attempt to use brief letters or simple agreements, but this approach will not satisfy Czech legal requirements.

The Labour Code specifies three mandatory elements that must appear in every contract. First, the contract must identify the type of work that the employee will perform. Second, it must state the place or places of work. Third, it must specify the day of commencement of employment.

Beyond these mandatory essentials, Czech law requires that the employer provide written information about vacation entitlement, notice periods, weekly working hours, work schedule, salary, and health and safety information.

The complexity here extends beyond mere translation. The Labour Office will review the contract to verify that employment terms comply with Czech standards. A poorly drafted contract can delay the entire hiring process or result in rejection of the work permit application.

Employers based in major cities may believe they understand Czech law, but even experienced HR professionals frequently misunderstand subtle requirements. When you layer foreign employment law onto Czech requirements, errors multiply quickly.

The experts at ARROWS Law Firm have extensive experience preparing employment contracts for foreign workers that satisfy both Czech Labour Code requirements and immigration authority standards.

microFAQ – Legal tips on employment contract requirements

1. Must the contract be in Czech language?

Legally, the contract must be intelligible to the employee. However, for the purpose of work permit applications and Labour Office inspections, a Czech version is mandatory. The standard practice is a bilingual contract (e.g., English-Czech).

2. Can I use a short employment letter instead of a full contract?

No. A simple offer letter does not meet legal requirements. The contract must be a formal document containing all required elements, and both employer and employee must sign it.

3. If I employ someone part-time or on a temporary arrangement, do the same contract rules apply?

Yes, all work relationships require a written contract (or written agreement for DPP/DPČ), regardless of whether the position is part-time or temporary. The type of agreement may differ, but the requirement for written documentation is universal.

Work permits and residence requirements

For non-EU employers, understanding the work permit system is critical because without proper permits, you cannot legally employ foreign workers. Illegal employment can result in fines up to CZK 10,000,000, with a mandatory minimum fine. This is not a theoretical risk, as Czech labour inspectors actively investigate foreign employment.

The Czech Republic has liberalized access for workers from certain countries. Citizens of the United Kingdom, United States, Canada, Australia, New Zealand, Japan, South Korea, Singapore, and Israel have free access to the Czech labour market and do not require work permits.

The strict labour market test for Employee Cards has been largely relaxed for many positions, meaning that a foreign national can often proceed with an application shortly after a job vacancy is published.

Critically, Czech employers face strict reporting obligations regarding notification of foreign workers. Employers must report the commencement of employment by a foreign national worker to the Labour Office no later than on the day the employee starts working.

While the statutory deadline is the day of commencement, best practice dictated by the digital nature of the system is to file the notification in advance. This digital reporting must be done via specific XML data boxes or the Labour Office portal.

Many foreign employers promise candidates that they can start in a few weeks, only to discover that the actual process takes two to four months.

This underestimation of timelines is one of the most common mistakes the lawyers at ARROWS Law Firm encounter when advising foreign companies entering the Czech market.

microFAQ – Legal tips on work permits and residence

1. Are EU citizens exempt from work permit requirements?

EU, EEA, and Swiss citizens have free access to the Czech labour market and do not need work permits. However, they must still be registered with the Labour Office (via an Information Card) no later than on the day employment commences.

2. How long does it take to obtain an Employee Card for a foreign employee?

The application process typically takes 60 to 90 days from submission through approval and collection. However, this timeline begins only after all prerequisite documents are prepared and the job vacancy has been registered with the Labour Office.

3. What is the labour market test, and do I still need it?

The labour market test theoretically verifies that a position cannot be filled by Czech citizens. While the strict 10-30 day waiting period has been relaxed for Employee Cards, the vacancy must still be reported to the Labour Office to generate the reference number.

Digital reporting and strict deadlines

Under the Employment Act, employers must report the start of employment by a foreign national worker strictly via digital channels. The obligation is to notify the Labour Office no later than on the day of commencement of work.

This requirement sounds straightforward in theory but contains hidden procedural complexity. The digital reporting system through the Labour Office portal does not allow for backdating. If an employer forgets to report on the start date, they are immediately in violation the next day.

Consequently, employers are strongly advised to prepare and submit the notification at least one day before the employee actually commences work to ensure compliance.

Any failure to comply with this deadline exposes the employer to fines. If the failure is deemed to be "enabling illegal work," the fine can reach up to CZK 10,000,000. For simple administrative delays in reporting a legal worker, fines are typically lower but still significant.

There is no statutory grace period for missing the deadline. Labour inspectors can conduct inspections at any time. This digital strictness means that employers must have a robust administrative process.

The international law firm ARROWS Law Firm has assisted numerous foreign employers in setting up compliant digital notification procedures.

Understanding Blue Cards, Employee Cards, and Intra-Company Transfer Cards

The Czech Republic offers several pathways for foreign workers to obtain residence permits and work authorization. Understanding which pathway applies to your situation is essential.

The Employee Card is the most common residence permit for foreign workers. It permits an employee to reside and work legally for a period specified in the employment contract, up to a maximum of two years. To obtain an Employee Card, the applicant must have an employment contract or preliminary contract.

The EU Blue Card is designed for highly qualified workers with university education or higher professional education lasting at least three years.

Crucially, the agreed gross monthly or annual salary for a Blue Card must be at least 1.5 times the average gross annual salary. This threshold is significantly higher than the minimum wage. The Blue Card allows for faster mobility within the EU after a certain period.

The Intra-Company Employee Transfer Card is required for citizens of third countries who will be employed in the Czech Republic as managers, specialists, or employed interns on the basis of an intra-company transfer from outside the EU.

The solicitors at ARROWS Law Firm regularly help foreign employers select the appropriate visa category and ensure that all supporting documentation meets Czech requirements.

Social security, health insurance, and tax obligations

When you hire a foreign employee in the Czech Republic, you assume social security and health insurance obligations. These are mandatory and carry significant penalties if mismanaged.

All employees working in the Czech Republic under a standard contract must be enrolled in the mandatory Czech public health insurance system. The employer must register the employee with a health insurance company and remit monthly insurance premiums.

Employees contribute 7.1% of their assessment base to social security, while employers contribute 24.8% following the government's consolidation package.

The minimum wage in the Czech Republic for 2026 is projected to be approximately CZK 22,400 per month. This applies to all employees. Employment contracts submitted with work permit applications must reflect at least this minimum wage.

For employers subject to social security or income tax obligations in the Czech Republic, the foreign company may need to register as a Czech tax payer. This triggers additional registration, reporting, and withholding obligations.

Minimum wage, probation periods, and employment termination rights

Recent amendments to the Labour Code have introduced changes to probation periods, notice periods, and termination procedures.

Under the updated rules, the probation period can be agreed upon for up to four months for regular employees and up to eight months for managerial employees.

The notice period for employment termination generally remains two months. However, under the new amendments, the notice period starts running from the date of delivery of the notice to the other party, rather than from the first day of the following month.

If your existing employment contracts contain wage confidentiality clauses, they are likely unenforceable and should be removed to ensure compliance with the updated Labour Code.

Medical examination requirements have been simplified for "Category 1" jobs, where initial entry medical exams are no longer strictly mandatory unless requested by the employer or employee. However, this exemption does not apply to riskier categories or specific work regimes.

Common compliance pitfalls and how to avoid them

Non-EU employers operating in the Czech Republic encounter recurring compliance mistakes that create legal and financial consequences.

Many employers fail to maintain required documents at the workplace, such as copies of employment contracts, work permits, and residence permits.

If you send employees from abroad to work on projects in the Czech Republic, you may be subject to "posting of workers" regulations. Postings must be notified to the Labour Office, and the employee must receive core Czech employment standards.

While the system of guaranteed wages is undergoing reform, employers must ensure they pay at least the relevant statutory minimum.

Employers sometimes attempt to avoid employment contract obligations by classifying employees as independent contractors. This "Švarcsystém" is illegal and can result in fines up to CZK 10,000,000.

The lawyers at ARROWS Law Firm regularly address these issues on behalf of foreign employers.

Labour inspection and enforcement

Labour inspection in the Czech Republic is vigorous. The State Labour Inspectorate conducts thousands of inspections annually.

When an inspector arrives, they will immediately examine whether your employees are legally employed and properly documented. They will request copies of employment contracts and verify that wages meet statutory minimums. They will also examine working hours records.

If you fail to file legally-sound objections within the deadline, the protocol's findings are finalized, leading to administrative proceedings and fines.

The largest penalties arise from illegal employment: employment without a written contract, without a valid work permit, or disguised employment. Even finding a single employee without proper documentation can trigger liability.

Risks and Sanctions	How ARROWS (office@arws.cz) helps
Illegal employment and work permit violations : Fines up to CZK 10,000,000 for employing foreign nationals without proper permits, with mandatory minimum fine of CZK 50,000	Work permit and residence visa counseling : ARROWS Law Firm advises on proper visa categories, eligibility requirements, and documentation preparation before hiring, preventing permit violations from occurring
Unreported or late employment notifications : Fines up to CZK 100,000 (or more if deemed illegal work) for failing to report foreign employees to the Labour Office by the required deadline	Digital reporting compliance : ARROWS Law Firm manages all employment notifications through the Labour Office portal, meeting strict deadlines and preventing reporting violations
Missing workplace documentation : CZK 500,000 fine for failure to maintain copies of employment contracts, work permits, and residence permits at the workplace during inspections	Documentation management and compliance audits : ARROWS Law Firm organizes required documentation, conducts routine audits to verify completeness, and ensures all records are accessible for inspection
Wage and benefits violations : Fines up to CZK 2,000,000 for underpaying employees, failing to pay overtime supplements, or not registering for social security and health insurance	Payroll compliance review : ARROWS Law Firm verifies that wages meet statutory minimums, all mandatory supplements are calculated correctly, and social security/health insurance registrations are current
Employment contract defects : Fines for contracts missing mandatory elements (type of work, place of work, commencement date) or violating non-negotiable Labour Code protections	Employment contract preparation and review : ARROWS Law Firm drafts or reviews all employment contracts to ensure compliance with Labour Code requirements and immigration authority standards

Hiring from specific countries: Visa liberalization

As of July 2024, Decree No. 183/2024 Coll. granted citizens of Australia, Canada, Israel, Japan, New Zealand, Singapore, South Korea, the United Kingdom, and the United States free access to the Czech labour market.

These nationals still require a residence permit to stay beyond 90 days and must be registered with the Labour Office upon commencement.

Ukrainians under temporary protection also have direct access to the labour market without work permits. However, employers must still fulfill notification duties to the Labour Office.

The lawyers at ARROWS Law Firm advise foreign employers on visa eligibility for specific nationalities and ensure that all applicants understand the residence requirements.

The international perspective: How Czech law differs

For non-EU employers, Czech employment law introduces fundamental differences that often come as a surprise.

Czech law does not permit at-will termination, as an employer can terminate an employment relationship only for specific, legally-defined reasons.

A written employment contract is legally mandatory. Verbal agreements are not sufficient and constitute a legal violation.

The standard full-time work week is 40 hours, and overtime is limited by law to a maximum of 8 hours per week on average.

All full-time employees are entitled to at least 4 weeks of paid annual leave per year, plus statutory public holidays. This is non-negotiable and cannot be forfeited.

Probation cannot be implied; it must be agreed in writing and is capped at 4 months for regular employees or 8 months for managers.

Executive summary for management

The hiring process for third-country nationals typically takes 2–4 months, and recent digital enforcement means you must notify the Labour Office no later than the day of commencement.

Digital reporting is strict, as all employment notifications to the Labour Office must be submitted digitally via XML or the portal. Technical delays do not excuse missed deadlines.

Czech labour law establishes non-negotiable protections regarding wages, working hours, and termination.

Labour inspections are frequent, and the State Labour Inspectorate conducts inspections focusing on foreign employment. Penalties for illegal employment can reach CZK 10,000,000.

Compliance complexity regarding work permits, social security, and digital notifications involves procedural details that create genuine risk.

Conclusion

Hiring in the Czech Republic as a non-EU employer requires substantially more than translating your home-country policies. The Czech Labour Code, social security system, and work permit procedures create a unique regulatory environment.

The lawyers at ARROWS Law Firm regularly handle this agenda for foreign employers entering the Czech market.

If your company is expanding into the Czech Republic, contact the experts at ARROWS Law Firm.

FAQ – Frequently asked legal questions about how non-EU businesses should approach hiring in the Czech Republic

1. How long does it actually take to hire a foreign employee in the Czech Republic?

For third-country nationals requiring Employee Cards, the typical timeline is 2–4 months from job posting to employee start date. This includes the time for visa approval (60-90 days statutory deadline) and document preparation.

2. What documents must I have available during a Labour Office inspection?

Labour inspectors will request copies of employment contracts, identification documents, proof of work eligibility (visas/permits), proof of social security registration, and working hours records. These must be available at the workplace.

3. Can I hire a foreign employee and have them start work while their visa application is pending?

Generally, no. A third-country national usually needs the approved permit to start working. Exceptions exist for renewals or specific statuses, but starting work before the initial permit is granted constitutes illegal employment.

4. What is the difference between an Employment Contract, DPP, and DPČ?

An Employment Contract is the standard for permanent work. DPP (Agreement to Complete a Job) is for max 300 hours/year. DPČ (Agreement to Perform Work) is for up to roughly 20 hours/week on average.

5. Are there countries whose citizens do NOT require work permits?

Yes. Citizens of Australia, Canada, Israel, Japan, New Zealand, Singapore, South Korea, UK, and USA do not need work permits, though they still need residence permits for stays over 90 days.

6. What penalties apply if I fail to register a foreign employee with the Labour Office?

Failure to register by the deadline (day of commencement) is an administrative offense with fines typically up to CZK 100,000. If the failure is total and deemed as employing someone without notification (illegal work), fines can be much higher.

Disclaimer: The information contained in this article is for general informational purposes only and serves as a basic guide to the issue. Although we strive for maximum accuracy in the content, legal regulations and their interpretation evolve over time. To verify the current wording of the regulations and their application to your specific situation, it is therefore necessary to contact ARROWS Law Firm directly (office@arws.cz). We accept no responsibility for any damage or complications arising from the independent use of the information in this article without our prior individual legal consultation and expert assessment. Each case requires a tailor-made solution, so please do not hesitate to contact us.