What’s New in Czech Employment Law in 2026: An Overview for International Owners of Czech Businesses

The year 2026 will bring the most significant changes to Czech labor law in recent years, affecting every employer. At the forefront is the so-called Flexinovela amendment to the Labor Code, which changes the rules for probationary periods, dismissals, and employee rights. In this article, you will not only get an overview of the new developments, but above all, strategic guidance on how to prepare for these labor law changes, avoid millions in fines, and take advantage of new opportunities to your benefit.

2026 is rewriting the rules: Are you ready for a new era in labor law?

The legislative changes for 2026 are not just cosmetic adjustments. They represent a deliberate shift in the Czech labor market towards a model known abroad as flexicurity. This concept seeks to strike a balance between flexibility for employers and security for employees. Companies are gaining more flexible tools for hiring and firing, while employees are getting a stronger social safety net.

This package of reforms, which will gradually take effect from June 2025 to 2026, affects all key areas: from the conclusion and termination of employment contracts to employee rights to completely new administrative obligations and changes in social security.

At ARROWS, we understand that for our clients, which include more than 150 joint-stock companies and 250 limited liability companies, it is not only important to know the legal provisions, but also to understand their strategic implications. That is why we are providing you with a comprehensive overview of what to expect.

Changes in employment contracts and termination of employment: What is changing from A to Z?

One of the most significant changes is the extension of the maximum length of the probationary period. It can now be negotiated for up to 4 months for regular employees and up to 8 months for managers. This gives companies more time to verify the abilities of a new team member.

A fundamental change is the possibility to extend the probationary period by written agreement with the employee, but only during its duration and up to the legal maximum. The law also specifies that the probationary period is automatically extended by full days of absence (e.g., illness), now by days worked, not calendar days.

Please note that incorrect negotiation or extension of the probationary period is now classified as an offense punishable by a fine of up to CZK 2,000,000. It is therefore not just a matter of the invalidity of the agreement, but a real financial risk arising from an incorrect HR process.

Termination by delivery: How will the acceleration of processes affect your company?

There is a fundamental change in the running of the notice period. It now begins on the day of delivery of the notice, not on the first day of the following calendar month. This can shorten the entire process of termination of employment by up to almost a month and gives companies greater flexibility in personnel changes.

In addition, in cases of termination due to breach of work duties or failure to meet the requirements for performing the work, the notice period is reduced to one month. However, this acceleration requires a completely flawless legal procedure. At ARROWS, we have extensive experience in representing clients in labor disputes and will ensure that every step is legally watertight. For an immediate solution to your situation, write to us at office@arws.cz.

FAQ – Legal tips for terminating employment

• What if an employee refuses to accept the notice of termination?
  Even in such a case, the notice of termination can be considered delivered if the legal conditions are met. However, the correct procedure is crucial for the deadlines to run. Do you need legal assistance with delivery? Contact us at office@arws.cz.
• Can we agree on a notice period longer than one month in the employment contract, even for breach of duties?
  The law sets a minimum. It is possible to agree on a longer period, but it must be carefully worded to be valid and enforceable. Our lawyers are ready to help you prepare contracts – write to office@arws.cz.

New employee rights: From transparent wages to returning from parental leave

The amendment expressly prohibits employers from restricting employees in any way from sharing information about their own wages or salaries. Confidentiality clauses, which were previously a common part of contracts, are now illegal. Violation of this prohibition is an offense punishable by a fine of up to CZK 400,000.

This change is the first step towards implementing the European Directive on Transparency in Remuneration (Gender Pay Gap). For companies, this is not just an administrative change. An open debate on wages can reveal inconsistencies in remuneration, leading to dissatisfaction and the departure of key people. It is therefore necessary not only to remove prohibited clauses, but also to review the entire wage system and prepare for the new reality.

Certainty for parents: How to set up contract work correctly and guarantee a return?

The position of parents is also improving. Employees on parental leave can now work for the same employer under a contract for work (DPP) or a contract for services (DPČ), even in the same position.

A key change is the extension of the guarantee of return to the original job and workplace. This certainty now applies to all parents who return to work before their child reaches the age of two, not just after the end of maternity leave. This requires careful planning and the correct setting of contracts for substitute employees.

The great administrative revolution: Can you handle the transition to the Unified Monthly Report (JMHZ)?

The biggest operational challenge for all employers is the introduction of the Unified Monthly Report (JMHZ). From 2026, this single electronic form will replace up to 25 different reports for the Czech Social Security Administration, the Financial Administration, and the Labor Office. Reports for health insurance companies remain unchanged for the time being.

The transition is complex and time-consuming. The law comes into effect on January 1, 2026, but the system will not be launched until April 1, 2026. However, between April 1 and June 30, 2026, you must retroactively submit reports for January, February, and March. This means that you must collect the correct data from the beginning of the year.

Each employee will receive a new Personal Identification Number (OIČ) and each employment relationship will receive its own Identifier. The deadline for filing reports will be strict – by the 20th day of the following month, with no possibility of extension. The penalties are severe: errors in registration are punishable by a fine of up to CZK 100,000, and late filing by up to CZK 5,000 per employee.

At ARROWS, we understand that the transition to JMHZ is a complex project. Our lawyers can provide you with legal support and prepare internal processes to ensure a smooth transition. Please do not hesitate to contact our office – office@arws.cz.

Wages and support in 2026: What will affect your costs and strategy?

The era of annual political negotiations on the minimum wage is coming to an end. Its growth will now be predictable thanks to a valorization mechanism that links its amount to the predicted average wage in the national economy. For 2026, the minimum wage is expected to increase to CZK 22,400. At the same time, the complex system of guaranteed wages is being abolished for the private sector, which simplifies administration.

Unemployment benefit reform as the other side of the coin

In line with the principle of flexicurity, support for employees who lose their jobs is also being strengthened. From January 1, 2026, unemployment benefits will increase to 80% of previous net earnings in the first few months. At the same time, penalties for termination of employment by agreement or resignation are being abolished. This may motivate employees to change jobs more frequently, placing higher demands on corporate talent retention strategies.

At ARROWS, we don't just focus on the legal aspects. Thanks to our extensive network of clients and partners, built up within ARROWS International, we are able to connect companies with interesting business or investment opportunities and thus support their growth.

ARROWS: Your partner for a smooth transition to the 2026 labor law

New obligations, strict deadlines, and high penalties pose a significant challenge for companies. At ARROWS, we are ready to guide you through this process. We will help you draft internal guidelines for managing probationary periods and returns from parental leave. We will prepare all the necessary documentation, from employment contracts to payroll statements, to protect you from fines and penalties.

We offer professional training for your employees and management so that everyone understands the new rules, including a certificate of completion. In complex situations, we will provide legal opinions and represent you in court and before administrative authorities. Our experience and emphasis on speed and quality are your guarantee of certainty.

Don't wait for the changes to catch you off guard. Ensure a smooth transition to the new rules. Contact our labor law experts today at office@arws.cz and arrange a non-binding consultation.

FAQ – Frequently asked legal questions about the new labor law 2026

1. Do I have to change all existing employment contracts due to the prohibition of confidentiality regarding wages?
Yes, it is necessary. Even though the clause is invalid by law, leaving it in the contracts exposes you to a risk of a fine of up to CZK 400,000. We recommend conducting a complete audit and removing it from all documents. If you are dealing with a documentation audit, contact us at office@arws.cz.

2. How exactly should I proceed if I want to extend an employee's probationary period from three to four months?
You must conclude a written amendment to the employment contract with the employee before the original three months expire. A verbal agreement or an amendment concluded after the deadline is invalid and you may face a heavy fine. To prepare legally sound amendments, please contact office@arws.cz.

3. What exactly does it mean that the notice period starts from the date of delivery? If I give an employee notice on March 15, when will their employment end?
With a standard two-month notice period, their employment will end on May 15. The new system significantly shortens the process, but places higher demands on verifiable delivery of the notice. To ensure the correct procedure, please contact us at office@arws.cz.

4. Our payroll accountant is external. Who is responsible for the correct and timely submission of the Unified Monthly Report (JMHZ)?
As an employer, you are always responsible to the state authorities, even if you outsource the agenda. It is essential to have contractually defined obligations and responsibilities for possible sanctions with an external accounting firm. We can help you review such contracts at office@arws.cz.

5. Do the changes also apply to agreements on work performance (DPP) and work activities (DPČ)?
Yes, some changes affect them. For example, the obligation to report all employees, including contract workers, in the JMHZ system is a fundamental change. Similarly, the prohibition on confidentiality regarding remuneration also applies to them. If you are dealing with the specifics of agreements, write to us at office@arws.cz.

6. We operate in several EU countries. How will these changes affect our foreign employees working in the Czech Republic?
The changes to the Czech Labor Code fully apply to all employees working in the Czech Republic, regardless of their nationality. Thanks to our ARROWS International network, we deal with labor law issues with an international element on a daily basis. For comprehensive advice, contact us at office@arws.cz.

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.