Labour Inspectorate Audits

Labor Inspectorate inspections are part of routine oversight in the labor market

An inspection can be initiated in several ways in accordance with Act No. 255/2012 Coll., the Inspection Code, for example, based on an annual program or a complaint from an employee. Inspectors may also arrive in response to reported accident rates or at the instigation of other authorities. Some inspections are announced in advance, where you receive a written notice of the inspection's commencement, while others are unannounced.

These unannounced actions often focus on detecting illegal work. In this case, the inspector will proceed without prior warning, and the inspection begins with the presentation of the inspector's ID. Whether the inspection is announced or not, it is important to know what the inspector will look at and how you should prepare for it.

The lawyers at ARROWS law firm regularly encounter inspections from the Labor Inspectorate and have many years of experience with their process. Take a look at our Labor Law service. They routinely assist clients with preparing documentation, represent them during inspections, and handle any objections to inspection findings as well as subsequent administrative proceedings.

Main areas on which inspectors focus

The Labor Inspectorate primarily checks four main areas. The first is compliance with obligations arising from labor relations, which includes the correct remuneration of employees, including all mandatory supplements under Section 114 et seq. of the Labor Code. It also checks compliance with working time limits, rest periods, and the proper establishment and termination of employment relationships.

If you employ someone without a written employment contract or a relevant agreement, it is considered illegal employment, whether the work lasts for an hour or for months. As stipulated by Act No. 435/2004 Coll., on Employment, illegal work is defined as the performance of dependent work by a natural person outside of an employment relationship or work by a foreigner without a valid permit.

Findings related to employment contracts and illegal employment are often the most sensitive. We cover in detail what an inspector checks in contracts and how they proceed during an inspection of employment contracts and illegal employment in a separate article.

In practice, the most frequently inspected deficiencies are in the area of remuneration, where employers fail to pay for overtime or do not adhere to the guaranteed wage. Inspectors also often find shortcomings in the recording of working time under Section 96 of the Labor Code, which does not match reality, and in securing OHS (Occupational Health and Safety) documentation.

What an inspector can and cannot do

The Labor Inspection Act gives inspectors very extensive powers, and it pays to know them in advance, not on the spot. An inspector can enter all areas where work is performed or where documents are stored, without your prior consent—including offices and archives. They can take photographic documentation of the workplace and copies of documents. They can demand verification of the identity of persons present at the workplace with an ID card or passport. They can order measurements, examinations, tests, or revisions. And they can question employees without your presence.

But there are limits. The inspector is obliged to present their ID and inform you of the purpose and scope of the inspection—so you should know whether it concerns occupational safety, remuneration, or everything combined. If someone arrives without an ID and you request it, this is not obstruction of the inspection but the exercise of your right. If a trade union, employee council, or an occupational health and safety representative is active at your company, the inspector is also obliged to inform them.

An inspector cannot take original documents without your consent. They can make copies, excerpts, or request certified copies. If inspectors insist on taking the original, you can reserve this right.

Your primary duty, on the other hand, is to allow free entry and provide the requested documents and cooperation. Denying entry or actively resisting is considered obstruction of the inspection, which carries a separate fine. And one thing we emphasize most often: the worst reaction to an announced inspection is to try to modify, hide, or retroactively create documents at the last minute. This leads to significantly worse sanctions than the findings themselves, because misleading a control authority is added to the breach of duty.

Who else might knock on your door

The Labor Inspectorate is not the only authority that may show up at an employer's premises. Virtually every field of business has its own regulatory body, and their procedures and sanctions differ. Do you sell electrical appliances? The Czech Environmental Inspectorate might visit. Do you run a restaurant or sell food? The State Agricultural and Food Inspectorate or the Public Health Office.

Do you trade in energy? The Energy Regulatory Office. The jurisdiction of the Czech Trade Inspection Authority alone is defined by more than forty regulations—from consumer protection and conformity assessment to fuel and advertising.

They have two things in common. The basic regulation for the inspection procedure is the Inspection Code, but it serves only as a supporting framework—sector-specific laws contain their own specifics and usually extend the powers of the regulatory body beyond its scope. For example, inspectors from the State Agricultural and Food Inspectorate can operate under a secret identity during an inspection, so you may only find out you were dealing with an inspector from the protocol.

The second common thing is that the sanction is not decided during the inspection itself. The inspection establishes the factual and legal state, and the resulting protocol becomes key evidence in a separate misdemeanor proceeding, where the fine is decided. An exception is a disciplinary fine for non-cooperation, which can be imposed during the inspection.

The upper limits of sanctions are often set very broadly—the Czech Trade Inspection Authority can impose a fine of up to CZK 50,000,000 under the Consumer Protection Act. Administrative authorities rarely impose the maximum, but such a wide range gives them great room for maneuver.

The practical consequence for employers is that one mistake can trigger inspections from multiple authorities. Missing medical fitness certificates interest both the Labor Inspectorate and the Public Health Office; an unregistered employee interests both the Labor Inspectorate and the Financial Authority. Therefore, documentation is not prepared for one authority, but in a way that it can withstand scrutiny from any of them.

How to prepare for an inspection – a practical action plan

Preparing for a Labor Inspectorate inspection is not complicated if you have your agenda in order. The outcome of the inspection is a protocol that records the inspection findings. If the inspection is announced in advance, you usually have several days to check whether all documents are complete.

Employing someone without a written contract can be classified as enabling illegal work, which carries a fine of up to CZK 10,000,000 under Section 140(1)(c) of the Employment Act. First and foremost, verify the status of all employment contracts and agreements, as the Labor Code requires them to be in writing. Also, check the working time records, which must include the start and end of each shift worked.

Next, check the payroll records. The most common violation is the non-payment of supplements or failure to comply with the minimum and guaranteed wage according to the current legal regulation on remuneration. Note: Government Regulation No. 567/2006 Coll., which previously regulated this area, was repealed as of 1 January 2025 by Government Regulation No. 443/2024 Coll. Therefore, always rely on the regulation effective for the given calendar year.

In the area of OHS, prepare documentation on risk identification and assessment, documents on work categorization, records of employee training, and the accident logbook under Section 105 of the Labor Code. Ensure that all statutory social and health insurance contributions are duly paid and that attendance lists from training sessions contain employee signatures.

We discuss the most common mistakes in this area and what an inspector requires in our article on how an OHS inspection and the most common errors proceed. Furthermore, work categorization is assessed by the Public Health Office, which conducts its own inspection at the employer's premises—we cover its process in the text about what an inspection from the Public Health Office looks like.

Which documents inspectors request most often

To make your preparation targeted, it helps to know what inspectors usually want to see. In the area of labor relations and remuneration, this includes written employment contracts for all employees, payroll slips for the last period, working time records with the start and end of each shift, documentation on leave and sickness, training records, and, if applicable, a collective agreement or work rules.

In the area of occupational safety, this includes risk assessment documentation, safety data sheets for substances and materials, documentation on the condition of specified technical equipment and records of their inspections, records from OHS training with lists of participants, the accident logbook and records of work-related accidents, and for specific activities, documents on explosion protection or emergency plans.

For illegal employment, inspectors will request identity documents of all persons physically present at the workplace on the day of the inspection, a list of employees with personal data and country of origin, and work permits for foreigners.

But there is something more important here than the list itself. The absence of any of these documents is interpreted as a breach of duty—even if the duty was not actually breached and only the proof of its fulfillment is missing. If you cannot prove that you recorded working hours, the inspector will cite it as a violation, even if you did record them. Documentation is therefore not administration, but evidence.

Electronic forms of documents are acceptable if they are duly signed with an electronic signature or are part of the employer's authenticated system. What is essential is that the content is authentic and complete. However, it is not the case that you can submit a document whenever you feel like it: if the inspector requests it on the spot, its absence at the time of the inspection is recorded as a deficiency, even if you provide it later.

How an inspection proceeds at the workplace

The inspection begins with the first inspection act, which is the delivery of the notice of commencement or the presentation of an ID on site. For larger companies, inspectors usually arrange a meeting with management in advance; for smaller companies and in cases of suspected illegal work, they arrive unannounced.

After the start, inspectors will tour the workplace and meet with management. At that moment, you should be prepared to present the personnel structure, show where and under what conditions work is performed, and state the number of employees and their job classifications. Only then will they request specific documents—and usually not all of them. They proceed by selecting a sample: inspectors choose a portion of employees and check their documentation in detail.

The most sensitive moment is questioning employees without your presence. This is where the biggest discrepancies are found—an employee may not remember how things are done or may say something that does not match the documentation. That is why it is important for the actual situation to correspond to what is on paper, not for employees to know the "correct answers."

After finishing, the inspectors conduct an exit interview and communicate the main findings. However, the protocol must be delivered to you subsequently, no later than 30 days from the last inspection act, or 60 days for more complex inspections. It is delivered by mail, via data box, or by personal arrangement—and the deadline for objections runs from its delivery.

The lawyers at ARROWS law firm routinely help clients with a documentation audit before an inspection (a so-called Mock Audit). More about our experience in the ARROWS law firm References. Their experience from handling hundreds of cases will allow you to identify risks that you might overlook on your own. If you want to prevent mistakes, contact them at consultation@arws.cz.

When you have a duty to cooperate – and why inspections occur

In practice, various impulses lead to an inspection. An employee (even a former one) who feels aggrieved can file a complaint with the locally competent regional labor inspectorate. Likewise, a competitor or another authority can file a complaint. Labor inspection authorities receive thousands of complaints annually, a significant portion of which concern unpaid wages.

Inspectors are obliged to maintain confidentiality about the identity of the complainant under Section 8 of the Labor Inspection Act. Therefore, if an inspection comes "by chance" after a conflict-ridden departure of an employee, a connection can be assumed. That is why it is crucial to keep both relationships and documentation in order on an ongoing basis.

The State Labor Inspection Office imposes fines totaling hundreds of millions of crowns each year. The effectiveness of inspections is increasing, and the digitalization of public administration allows for better targeting of at-risk entities.

The inspection protocol – what it contains and what to do with it

The output of every inspection is an inspection protocol, which contains a description of the findings and identifies any violated legal regulations under Section 12 of Act No. 255/2012 Coll., the Inspection Code. The protocol is not a decision on a fine, but it is key evidence for the subsequent administrative proceedings.

If you disagree with the inspector's findings, you have the right to file objections against the inspection findings. The deadline is 15 days from the delivery of the protocol and stems from Section 15(4) of the Labor Inspection Act. When you receive the protocol, you must study it carefully. The inspector or their superior decides on the objections.

In practice, we see employers signing the protocol without reservations and only then wanting to resolve the situation. This is a mistake. If you do not file objections, the protocol becomes the basis for imposing a fine, and its content is difficult to refute later.

The protocol often includes a measure for correction – an order to eliminate the identified deficiencies within a specified period and to submit a written report on it.

Sanctions and fines – what you are facing

Sanctions for misdemeanors in the field of labor are high. The amount of the fine depends on the severity, consequences, and whether it is a repeated violation.

• Obstruction of inspection: For non-cooperation (e.g., not providing documents), a legal entity faces a fine of up to CZK 500,000 under Section 10 of the Labor Inspection Act.

• Labor relations: For violating obligations in remuneration, non-compliance with working hours, or errors in documentation, a fine of up to CZK 2,000,000 is possible under Section 12 et seq. of the Labor Inspection Act.

• Illegal work: For enabling the performance of illegal work, a fine of up to CZK 10,000,000 is possible under Section 140(1)(c) of the Employment Act. As of 1 January 2024, the minimum fine (previously CZK 50,000) was abolished, but authorities still impose significant sanctions.

• OHS: For non-compliance with obligations in the area of occupational safety, a fine of up to CZK 2,000,000 is possible (and more in case of serious endangerment) under Section 17 et seq. of the Labor Inspection Act.

In addition to fines, in the case of illegal employment, there is also the risk of being blacklisted – exclusion from public contracts under the Public Procurement Act or the inability to receive contributions from the Labor Office or employ foreigners under Section 136 of the Employment Act. The Labor Office also conducts its own inspections with a different subject matter and sanction regime—we discuss what an inspection from the Labor Office covers separately.

Administrative proceedings for imposing a fine follow the conclusion of the inspection. At this stage, the amount of the sanction is decided. The lawyers at ARROWS law firm routinely represent clients in these proceedings and are successful in reducing or completely averting proposed fines if they can prove that no violation occurred. If you suspect an incorrect procedure by the authority, contact consultation@arws.cz.

How to instruct workers to be prepared for an inspection

Your employees play a key role during an inspection. If they state information in the protocol that contradicts the submitted documentation (e.g., "we come to work on weekends, but we don't write it in the timesheet"), it is a clear signal for the inspector to impose a fine.

You should properly train your employees on their duties, how to correctly record working hours, and where their employment contracts or wage assessments are available. You should not instruct employees to lie, which is illegal, but employees should know who is authorized to deal with the inspection on behalf of the company.

Good internal communication and clear rules protect you. The lawyers at ARROWS law firm can provide expert training for HR and company management. This way, you ensure that everyone understands their role in complying with legal requirements. If you are interested in training, write to us at consultation@arws.cz.

What to do if you disagree with the inspector's findings

You have the right to comment on the findings. As already mentioned, the key instrument is objections against the inspection findings. You must file these in writing within the deadline specified in the protocol, and you must state the specific reasons why you disagree with the inspector's conclusions (e.g., incorrect legal assessment, omission of evidence) in accordance with § 13 and § 14 of the Inspection Code.

Subsequently, the authority will initiate administrative proceedings for a misdemeanor under Act No. 250/2016 Coll., on Liability for Misdemeanors and Proceedings Thereon, where the fine is decided. If the inspector does not grant the objections, their superior decides on them. Only after the objections are settled is the inspection concluded, and you can defend yourself and propose evidence even in the administrative proceedings.

The final instance is an administrative action before a court under the Code of Administrative Justice. In addition to a substantive defense against the findings, the inspected party also has remedies against the authority's procedure itself if the inspector exceeds their powers—we discuss how the defense against an incorrect inspection procedure works in a separate text. The lawyers at ARROWS law firm can prepare a detailed legal analysis for you and draft high-quality objections, which often lead to a re-evaluation of the inspection's conclusions. We have experience representing clients in all stages of the proceedings. If needed, contact consultation@arws.cz.

How to write objections so they are effective

Objections are not a complaint, but a legal instrument—and their specificity is what matters. A general "I disagree with your findings" has virtually no effect. You need to dispute individual findings and provide a reason and evidence for each. For example: "I disagree with the finding that employee X worked on Tuesday from 8:00 to 20:00 without a break, because in the working time records we have a record of a thirty-minute break at 12:00."

In addition to objections, there is also a complaint about the inspection procedure. This can be used to challenge how the inspection was conducted—whether the inspectors adhered to deadlines, whether they correctly informed you of your rights. However, it does not change the findings themselves, it only reviews the procedure. It is often worthwhile to file both simultaneously, as a procedural error can lead to the annulment of part of the decision.

If the inspectorate issues a decision on a fine, you have the right to appeal within 15 days of its delivery. The appeal has a suspensive effect, so the fine does not become due until the appeal decision is made. The misdemeanor proceeding is two-tiered: the regional labor inspectorate decides, and if the State Labor Inspection Office decided, the appeal is handled by the Ministry of Labor and Social Affairs. The final instance is an administrative action before the regional court.

Besides illegal employment, the inspectorate focuses on disguised employment mediation. This is a situation where an agency formally employs a worker but in fact assigns them to work for a third party, which does not have a direct employment relationship with them—yet assigns them tasks, manages their working hours, and decides on their placement.

This is risky because not only the intermediary is penalized, but also the user. The fine can reach the same amount as for illegal employment, i.e., up to CZK 10,000,000, and inspectors uncover dozens of such cases annually.

The defense is in the contractual setup. The contract with the agency should explicitly state that the agency retains managerial and disciplinary influence over its employees, and the actual practice must correspond to this. If a manager at your company assigns tasks to an agency worker, imposes sanctions, and plans their shifts, the wording of the contract alone will not protect you.

Six steps to prepare for an announced inspection

If a notice of inspection arrives, you have a few days to a few weeks. It pays to use them in a structured way.

1. Assemble a team. People from HR, company management, and ideally an external lawyer. The team must have clearly defined roles—who will deal with the inspectors, who answers which questions.

2. Review the documentation. Employment contracts, payroll slips, working time records, training, safety data sheets. Check that they are complete and without internal contradictions.

3. Identify weak spots. Where signatures are missing on training records, where attendance doesn't match, where safety data sheets are not kept. What can be legally rectified before the inspection, rectify it.

4. Decide on communication. Will a lawyer be present during the inspection? Will employees be instructed on who is authorized to act on behalf of the company?

5. Check the physical condition of the workplace. Safety measures, signs, labels. The inspector will look at the workplace first.

6. Train your employees. A short training session on "what to do if an inspector comes" pays off. Employees should answer truthfully and concisely and know who acts on behalf of the company—they should not be taught answers.

Long-term strategy – how to avoid repeated inspections

The best strategy is prevention. This means systematically complying with labor law regulations. Have a well-drafted work code, clearly defined processes for time recording and remuneration.

ARROWS lawyers will review your contracts, payroll records, and directives from an inspector's perspective, allowing you to identify deficiencies before the authorities do. We recommend conducting regular internal legal audits (Legal Audits). This way, you will find errors in time and can correct them calmly without the threat of a sanction. You can find out more about our approach in the Why ARROWS section.

The costs of prevention are always a fraction of the costs of fines and legal disputes. If you are interested in long-term legal support, contact us at consultation@arws.cz.

Executive Summary for Management

• Inspections are frequent and thorough: Authorities conduct tens of thousands of inspections annually. The fine for illegal employment can reach up to CZK 10 million.

• Most common mistakes: Formal deficiencies in employment contracts, discrepancies between working time records and reality, and non-payment of supplements.

• Preparation saves money: Companies with prepared documentation and trained personnel get through inspections faster and with minimal sanctions.

• Risks are not just financial: A fine also brings reputational risk, the possibility of exclusion from public contracts, and loss of subsidies.

• Professional legal support: ARROWS law firm offers comprehensive services – from preventive audits and representation during inspections to defense in administrative proceedings. Our portfolio includes hundreds of satisfied corporate clients.

Conclusion

Labor Inspectorate inspections are a routine part of doing business. If you know what to focus on, you can minimize the risk. The most important thing is to have written contracts in order, keep truthful records of working hours, and comply with OHS rules.

Given the complexity and frequent changes in legislation, it is difficult for many employers to keep track of all obligations. The lawyers at ARROWS law firm specialize in labor law and can provide you with the certainty that your business is in compliance with the law. If you have just received a notice of inspection, or want to preventively check the status of your company, do not hesitate. Contact the lawyers at ARROWS at consultation@arws.cz.