Employment law news in the Czech Republic | News Flash
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As of January 1, 2019, the minimum wage in the Czech Republic increased to CZK 13,350, and the average wage rose to CZK 32,699, affecting health and social security insurance levies. A proposed bill aims to require employers to compensate employees for the first three days of sick leave starting July 1, 2019, although it has yet to pass the senate. Other potential changes under consideration include extending annual leave to five weeks and introducing maternal and parental care.
Employment law news in the Czech Republic | News Flash
- 1. News Flash January 2019 Employment law news in the Czech Republic
- 2. News Flash I Accace Czech Republic I Employment law news Employment law news in the Czech Republic Minimum wage, average wage and related indicators On 1 January 2019 the minimum wage was increased to CZK 13,350 (increase by CZK 1,150), and the average wage was increased to CZK 32,699 (increase by CZK 2,720). These changes have resulted in an adjustment of both the assessment basis and the minimum monthly levies for health and social security insurance. 2018 2019 Minimum wage CZK 12,200 CZK 13,350 Average wage CZK 29,979 CZK 32,699 Minimum monthly wage for payment of sickness and pension levies (1/10 of the average wage) CZK 2,500 CZK 3,000 Maximum assessment basis for payment of social security levies (48 times the average pay) CZK 1,438,992 CZK 1,569,552 Minimum monthly pension levies for self-employed persons (29,2% from 1/4 of the average wage) CZK 2,189 CZK 2,388 Minimum monthly health insurance levies for self-employed persons (13,5% from 1/2 of the average wage) CZK 2,024 CZK 2,208 Small scale employment (within the meaning of the Sickness Insurance Act 187/2006 Sb.) From 1 January 2019 the limit for monthly wage under which neither health insurance nor social security levies are paid, which gives no rise to sickness insurance benefits and which is not included in the period used for calculation of regular or disability pension benefits is being increased from CZK 2,500 to CZK 3,000/month. The limit for payment of withholding tax remains at CZK 2,500/month. Compensation for loss of earnings after the end of sick leave Criteria for calculation of compensation for loss of earnings paid to jobseekers are specified in more detail: the calculation is based on fictional post-injury earnings which equal to the minimum wage and in order to clarify a frequently disputed issue, it is expressly stated that the minimum wage shall be understood as the minimum wage applicable as of the date of entry of the respective jobseeker in the official jobseeker database. Cancellation of the initial exclusion period for sickness insurance There is a bill proposing that employers shall pay their employees compensation for the first three days of sick leave in the same amount as they pay for the 4th to 14th day of sick leave; to compensate for this,
- 3. News Flash I Accace Czech Republic I Employment law news employers will be required to pay lower sickness insurance levies; the change is expected to be effective from 1 July 2019. Cancellation of initial exclusion period Currently Planned from 1 July 2019 Social security levies paid by employers 25% 24.8% Sickness insurance levies paid by employers/ self-employed persons 2.3% 2.1% Compensation for first three days of sick leave (% from the daily assessment basis) 0% 60% Compensation for the 4th to 14th day of sick leave (% from the daily assessment basis) 60% 60% The bill has been approved by the Chamber of Deputies but has not passed through the Senate. The Chamber may overrule the Senate, however, the date for the bill to be reconsidered in the Chamber has not been set yet. Case law An employee may be entitled to a severance pay of twelve times the average monthly earnings even if their employment was terminated by the employee. If an employee is no longer able to work at the agreed position due to an occupational injury or disease as foreseen in Sec. 52 d) of the Labour Code and there is an agreement to move the employee to another position, the employee has not been assigned to another position under Sec. 41 (1) a) of the Labour Code and the employment has not been terminated by the employer under Sec. 52 d) of the Labour Code, the employee is entitled to terminate the employment and to receive the statutory severance pay, despite Sec. 67 (2) of the Labour Code expressly providing for severance pay only in case of termination by the employer or a mutual agreement on termination (decision of the Supreme Court from 30 January 2018, ref. no. 21 Cdo 5825/2016). Other proposed changes: ▪ extension of annual leave to 5 weeks, ▪ introduction of maternal and parental care instead of maternal and parental leave; currently under consideration in the Chamber of Deputies. Currently under consideration in the Chamber of Deputies. In case of specific questions please contact our experts. We will be pleased to advise you! Disclaimer Please note that our publications have been prepared for general guidance on the matter and do not represent a customized professional advice. Furthermore, because the legislation is changing continuously, some of the information may have been modified after the publication has been released. Accace does not take any responsibility and is not liable for any potential risks or damages caused by taking actions based on the information provided herein. Want more news like this? Subscribe!
- 4. News Flash I Accace Czech Republic I Employment law news About Accace With more than 550 professionals, over 2000 international companies as customers and branches in 13 countries, Accace counts as one of the leading outsourcing and advisory services providers in Central and Eastern Europe. Accace offices are located in Bosnia and Herzegovina,Czech Republic, Croatia, Germany, Hungary, Macedonia, Montenegro, Poland, Romania, Serbia, Slovakia, Slovenia and Ukraine. Locations in other European countries and globally are covered via Accace’s trusted network of partners. More about us on www.accace.com Contact Andrea Drhová Senior Associate E-Mail: andrea.drhova@accace.com Phone: +420 222 753 480 About Accace With more than 550 professionals, over 2000 international companies as customers and branches in 13 countries, Accace counts as one of the leading outsourcing and advisory services providers in Central and Eastern Europe. Accace offices are located in the Czech Republic, Hungary, Poland, Romania, Slovakia, Ukraine, Bosnia and Herzegovina, Croatia, Germany, Macedonia, Montenegro, Serbia and Slovenia. Locations in other European countries and globally are covered via Accace’s trusted network of partners. More about us on www.accace.com