Employment Law 2026

Which employers will be affected by the mandatory contribution to old-age savings products?

The aim of this new legislation is to help employees in hazardous occupations save funds for the so-called pre-retirement (the period before reaching retirement age). The contribution amount is 4% of the employee's assessment base, with the assessment base being the same as the employee's assessment base for social security contributions.

When does the employee become entitled?

An employee is entitled to the mandatory contribution only if they work at least three shifts under the given hazard in a given calendar month. If at least 3 hazardous shifts are not worked in a given month, the employer's obligation to pay the contribution does not arise. Also, keep in mind that a shift is considered hazardous only if the employee performed hazardous work for the majority of it.

The employer's obligation to pay the mandatory contribution is activated only if the employee exercises their right, i.e., not automatically. The employee must provide the employer with a written notice requesting the mandatory contribution.

Watch out for the information obligation!

The employer is obliged to inform every employee affected by the mandatory contribution in writing of their right to the mandatory contribution and how to exercise this right. The employee must receive this information before starting the hazardous work. If the employee is already performing hazardous work in Category 3 (for the relevant factors) as of the effective date of the act (January 1, 2026), the act sets a 15-day period for retroactive fulfillment of the information obligation, i.e., until January 16, 2026. Failure to comply with the information obligation may result in a fine of up to CZK 200,000 for the employer.

Furthermore, the employer is obliged to keep records of mandatory contributions. Specifically, they must record a list of employees performing hazardous work who have claimed the entitlement, including their names and dates of birth, the date the claim was made, the number of hazardous shifts worked in individual months, and the amounts and dates of contribution payments. These records must be kept for 10 years.

Furthermore, the employer is obliged to issue a confirmation of payment of the mandatory contribution to the employee – free of charge and automatically (without request) no later than the end of the calendar month in which the contribution was first paid. Failure to comply with this obligation may result in a fine of up to CZK 200,000.

A Major Administrative Revolution: Can You Handle the Transition to the Unified Monthly Report (JMHZ)?

Starting in 2026, the so-called Unified Monthly Report of Employers (JMHZ) is introduced, replacing a number of forms submitted to the Czech Social Security Administration (ČSSZ), the Financial Administration, and the Labor Office. However, it does not include health insurance companies; their reporting remains separate, so employers will operate in a dual system.

The JMHZ significantly expands the information that an employer must report, and for a single employee, it can involve dozens or even hundreds of data points, including new data that companies have not systematically tracked until now, such as the highest level of education completed, income details, or reporting on agreements on work activity (DPČ) below the threshold.

Three Phases of Implementation

The JMHZ is not introduced all at once, but in three stages, each with different rules:

• From January 1, 2026 – data collection, but without submitting reports

Companies must start collecting all new data required by the JMHZ, even if they are not sending it yet

• From April 1 to June 30, 2026 – the first live submission

Employers will submit the first JMHZ for April (by May 20), May (by June 20), etc., and at the same time retroactively submit data for January, February, and March 2026.

• From July 1, 2026 – full operation

A fundamental change occurs: an employee must be registered in the system before they even start working, not after they join. This requires adjustments to recruitment and HR processes.

And why shouldn't you underestimate the JMHZ? The reporting will be subject to a strict penalty regime – for a non-submitted or delayed report, or for a report that is ineffective after the deadline, a fine of up to the product of CZK 5,000 and the number of all employees registered on the last day of the period for which the report is submitted may be imposed (Section 28(2)(d) of Act No. 323/2025 Coll.), resulting in million-crown impacts for larger companies with a high number of employees. Labor inspections also focus on compliance with labor law obligations – what inspectors check first is discussed in a separate article.

At ARROWS, we understand that the transition to the JMHZ is a complex project. Our Prague-based legal team can provide you with legal support and prepare internal processes to ensure a smooth transition.

Flexi-amendment to the Labor Code: Summary of Main Impacts

Since June 1, 2025, the so-called flexi-amendment to the Labor Code has been in force, shifting the Czech market towards a flexicurity model. It offers employers more room for flexibility while providing employees with higher protection and security. The changes are reflected in the conclusion of contracts, termination of employment, employee rights, and administrative obligations. We address employee overtime in a separate article.

Changes in the Probationary Period

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

A key new feature is the possibility to additionally extend the probationary period by written agreement with the employee, but only during its duration and up to the statutory maximum. Before the flexi-amendment, the probationary period was already extended by full-day obstacles to work (e.g., illness) and full-day leave. From June 1, 2025, it is extended by working days on which the employee did not work an entire shift due to an obstacle to work, leave, or unexcused absence from work (Section 35(5) of the Labor Code) – unexcused absence is a new addition among the reasons. The Supreme Court (judgment 21 Cdo 18/2026 of June 24, 2026, regarding the regulation effective until June 30, 2024) confirmed that the probationary period is also extended by full-day obstacles on the part of the employer, for example, when the employer does not assign work to the employee.

We discuss termination of employment during the probationary period in the article How to Terminate Employment During the Probationary Period Without the Risk of a Lawsuit.

Please note that incorrect agreement or extension of the probationary period is now classified as an offense subject to a fine of up to CZK 2,000,000. This is therefore not just a matter of the agreement being invalid, but a real financial risk arising from a flawed HR process.

Termination: How Will the Acceleration of Processes Affect Your Company?

A fundamental change occurs in the running of the notice period. It now begins to run on the day the notice is delivered, rather than on the first day of the following calendar month. This can shorten the entire employment termination process 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 the performance of work, the notice period is shortened to one month. However, this acceleration requires an absolutely flawless legal procedure. We discuss when notice cannot be given during the protection period under Section 53 in a separate article. At ARROWS, we have extensive experience representing clients in labor disputes and will ensure that every step is legally watertight.

New Employee Rights: From Transparent Wages to Return from Parental Leave

The amendment explicitly prohibits employers from restricting employees in any way from sharing information about the amount of their own wage or salary. Confidentiality clauses, which were previously a common part of contracts, are now illegal. Violation of this prohibition is an offense subject to a fine of up to CZK 400,000.

This change is the first step towards implementing the European directive on pay transparency (Gender Pay Gap). For companies, this is not just an administrative adjustment. Open debate about wages can reveal inconsistencies in remuneration, leading to dissatisfaction and the departure of key people. It is therefore essential not only to remove prohibited clauses but also to review the entire payroll system and prepare for the new reality.

Security for Parents: How to Correctly Set Up Agreement-Based Work and Guarantee Return?

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

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

Leave in 2026: Who Determines the Scheduling and What Must the Company Monitor?

The scheduling of leave is determined by the employer. In doing so, they must take into account operational reasons as well as the legitimate interests of the employee and notify the date in writing at least 14 days in advance, unless they agree with the employee on a shorter period. Leave taken in several parts must include at least one part of at least 2 consecutive weeks, unless the parties agree otherwise (Section 217(1) of the Labor Code).

If the employer does not schedule the leave by June 30 of the following year, the employee may also determine the date. For leave for the year 2026, the deadline thus ends on June 30, 2027. The employee must notify the scheduling in writing at least 14 days in advance, unless they agree with the employer on a different period (Section 218(4)). We discuss when an employee can schedule leave themselves and who actually decides on the scheduling of leave in a separate article.

The carry-over of leave to the following year is possible only upon the written request of the employee. It is possible to carry over the part of the leave for the given year that exceeds 4 weeks (6 weeks for pedagogical and academic staff). The employer must then schedule the leave so that the employee takes it no later than the end of the following year. An exception is leave that the employee could not take due to temporary incapacity for work or maternity or parental leave (Section 218(2), (3) and (5)).

Collective leave may be scheduled by the employer only in agreement with the trade union organization and with the consent of the works council, and only if necessary for operational reasons. It may last for a maximum of 2 weeks, and 4 weeks for artistic ensembles (Section 220).

The employer must not schedule leave, among other things, during temporary incapacity for work, or maternity, paternity, or parental leave. During other obstacles to work on the part of the employee, they may schedule it only at the employee's request (Section 217(4)). Financial compensation for unused leave is due only upon termination of employment (Section 222(2)).

We recommend three steps for employers: draw up a written leave plan, check the remaining leave balances from the previous year before June 30, and write the approval rules into an internal regulation. Such a regulation is prepared by the lawyers of the ARROWS law firm according to the operations of the specific company.

Wages and Support in 2026: What Will Affect Your Costs and Strategy?

The era of annual political negotiations over the minimum wage level is ending. Its growth will now be predictable thanks to an indexation mechanism that links its amount to the prediction of the average wage in the national economy. For 2026, the minimum wage is CZK 22,400 per month and CZK 134.40 per hour (Communication No. 356/2025 Coll.).

Wage in foreign currency. Since June 1, 2025, the flexi-amendment has expanded the group of employees who can, with their consent, be paid their wage or part of it in a foreign currency. Previously, this was only possible when working abroad; now it is also possible for foreigners, citizens of other EU countries without permanent residence in the Czech Republic, and employees who permanently reside abroad. The currency must have an exchange rate declared by the Czech National Bank (ČNB), and the exchange rate from the first working day of the following month is used for conversion, unless the parties agree otherwise (Section 143 of the Labor Code).

Wage deductions in case of multiple executions. If at least four enforcement orders are simultaneously ordered against an employee's wage and the resolution has been delivered to the wage payer, two-thirds of the remaining net wage are always deducted, not just one (Section 279(4) of the Civil Procedure Code). An exception applies to an employee who proves the award of an old-age, orphan's, or second- or third-degree disability pension and whose one-third of the remaining wage does not reach the statutory amount. Payroll departments must therefore continuously monitor the number of executions for each employee.

New obligations will first manifest in the company when an inspection arrives. In the video, we summarize what the inspector checks first and how to prepare for the inspection. https://www.youtube.com/watch?v=kmpBaGl-JMc

Final Summary

New obligations, strict deadlines, and high penalties represent a significant challenge for companies. At ARROWS, we are ready to guide you through this process. We will help you set up processes for the mandatory contribution to old-age savings products, including drafting templates for internal notices to employees, so that the employer meets their information obligation and avoids fines.

We will also help you draft internal guidelines for managing probationary periods and returns from parental leave. We will ensure the preparation of all documentation – from employment contracts to wage statements – which will protect you from fines and administrative sanctions.

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 before courts and administrative authorities. Our experience and emphasis on speed and quality guarantee certainty and a smooth transition to the new legislative requirements.

Do not wait for the changes to catch you off guard. Ensure a peaceful transition to the new rules. Contact our labor law experts today at consultation@arws.cz to arrange a non-binding consultation.