Czech Republic Employment Guide

The Czech Republic is in Central Europe, at the heart of the EU, bordering Germany, Austria, Slovakia and Poland with convenient transportation. It has ~10.5 million people; Prague (the capital) is a key political, economic and cultural center. Its economy is pillar-supported by manufacturing, auto industry, machinery and IT, while tourism is also well-developed. As an EU member state, it has a stable labor market and a highly educated workforce. Labor laws strictly regulate employment relations, including clear requirements for written contracts, a 40-hour standard workweek, minimum wages, overtime and paid leave. Employers must contribute to employees’ social and health insurance, and dismissal procedures must follow legal rules to protect employees’ rights.

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Currency

Czech Koruna (CZK)

Capital

Prague

Official language

Czech

Salary Cycle

Monthly

Our Employment Guide in Czech Republic

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Terminating Employment in the Czech Republic: Key Requirements

Navigating employment termination in the Czech Republic requires careful attention to legal frameworks and national regulations. The process must be managed collaboratively between employers and relevant stakeholders, often involving specific procedures and potential costs.

Termination of employment contracts with the minimum notice period must be executed in written form. For indefinite-term contracts, employers are legally obligated to state the reason for termination clearly.

Compliant Termination Methods

Voluntary Resignation: Initiated by the employee
Employer-Initiated Termination:
- Poor performance
- Termination during probation period without notice
- Dismissal for disciplinary reasons without notice
Contract Expiration: Automatic termination upon fixed-term contract completion

Fixed-term contracts may be terminated without specific justification upon expiration.

Notice Period Regulations

The minimum notice period stands at 60 calendar days, extendable to 180 days for managerial positions depending on contractual agreements and seniority.

Severance Pay Obligations

Employees terminated unilaterally by employers qualify for statutory severance payments calculated based on length of service:

Employment Duration	Severance Entitlement
1 year	1 month's total salary
2 years	2 months' total salary
3+ years	3 months' total salary

Employees believing their termination was unjust may file court appeals seeking enhanced severance compensation.

Mitigating Termination Risks with SailGlobal

SailGlobal incorporates severance accruals into all Czech employment agreements to protect clients from unexpected financial liabilities. Our global expertise in litigation risk management ensures calculations align with statutory requirements and local best practices. Unused accruals are fully refunded if employees resign or become ineligible for severance.

Practical Case Example

A multinational technology firm recently faced a restructuring requiring termination of 20+ Czech employees. By implementing SailGlobal's pre-accrued severance model, the company avoided €150,000 in unplanned expenses while maintaining full compliance with local termination regulations.

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