Czech Employment Law 2026: Key Employer Obligations and Compliance Risks

Mgr. Klára Megová
Mgr. Klára Megová
29.5.2026 | ARROWS law firm

The year 2026 brings fundamental legislative changes in employment law for Czech employers. They will affect the unified monthly reporting, mandatory contributions for high-risk professions, and the digitalisation of workplace injuries. These developments mean new obligations, the risk of fines, and an increased need for compliance. Training on these changes is essential for HR teams and management, and we will look at the most important ones.Fotografie zobrazující právníky diskutujícími nad novinkami v pracovním právu za rok 2026

Quick summary

From 1 January 2026, data collection begins for the Single Monthly Employer Report (JMHZ), with full operation for current reporting from 1 April 2026. This change fundamentally transforms the way data is reported to the state: instead of dozens of different reports, you will submit only one. Full operation for all types of reporting starts from 1 July 2026.

As of 1 January 2025, employers must newly pay 4% of the assessment base as increased pension insurance contributions. This applies to employees performing work in categories 3 and 4 under the Public Health Protection Act (Act No. 258/2000 Coll.), which brings new calculations and mandatory notification of the affected employees.

For 2026, the minimum wage increased to CZK 22,400 per month (CZK 134.40 per hour). The new law also clearly separates wages from benefits, meaning that “salary swap” practices are no longer possible.

The fine for failing to register an employee for the purposes of social insurance before they start work can be up to CZK 5,000. Significant fines may also be imposed for failure to comply with other notification obligations, for example regarding high-risk work. Many companies underestimate these obligations.

Single Monthly Employer Report – the biggest administrative change

Imagine that until now you had to send up to twenty-five different reports every month to several authorities – the Czech Social Security Administration, the Financial Administration, the Labour Office. Each report had a different deadline and a different format, sometimes paper-based, sometimes electronic. In such chaos, it was easy to forget something or make a mistake that could cost you a fine. From 2026, this is changing fundamentally. In practice, it is advisable to have internal procedures and responsibilities set up in HR and payroll, which typically falls within the area of employment law under Czech legislation.

The new Single Monthly Employer Report (JMHZ) system, introduced by Act No. 281/2023 Coll., centralises all data. Instead of dozens of reports, you will submit only one. All relevant institutions will thus have access to the data, reducing the administrative burden.

The transition to the new system takes place gradually in three phases, which is critical to understand. We summarise in more detail what to watch out for when setting up processes and communicating with payroll system providers in the update Single Monthly Reporting in practice: What to watch out for when communicating with payroll system providers. First phase (January to March 2026): Employers may start collecting information in the new system, but must also continue to send all existing reports (so-called duplicate operation).

Second phase (from 1 April 2026): Employers must start sending monthly reports for the current period via the new JMHZ system. At the same time, they must additionally submit all reports for January to March 2026 (by 30 June 2026) already through the new system. Third phase (from 1 July 2026): The JMHZ system is fully operational for all reporting.

An important obligation that will apply to employers from 1 July 2026 is the registration of a new employee for social insurance purposes in the JMHZ system before they start work.

If you fail to do so, you face a fine of up to CZK 100,000. This change is surprising for many companies, as it has so far been common to register employees gradually. Now it is mandatory in advance, with the risk of sanctions in the event of an omission.

Each employer is assigned an identifier used to identify them when submitting filings. If an employer has multiple payroll offices, each of them must submit reports separately for its part of the employees.

The attorneys at ARROWS, a Prague-based law firm, can help ensure that both your HR department and payroll office are properly prepared for this transition. This will prevent procedural errors that could cost you fines or delays in dealings with state authorities in the Czech Republic.

Most frequently asked questions about the Single Monthly Report

1. What happens if we or our payroll office forget to register a new employee in JMHZ before they start?
You risk a fine of up to CZK 100,000. We therefore recommend implementing an internal procedure with a checklist to ensure the registration is completed in advance and does not become part of the chaos of the first working day. 

2. What data must we include in the JMHZ report?
In particular: employer identification details, employee details (first name, last name, birth number, address), type of gainful activity, period of participation in insurance, and the period for which you are submitting the report. The new system will differ in some details from the old one. 

Mandatory old-age contribution for high-risk professions – a new financial obligation for employers

The second major change concerns employers who employ people in physically demanding and hazardous professions. From 1 January 2026, the Act on mandatory contributions to old-age savings products comes into effect. It introduces a new financial and administrative burden for companies. For comparison of the impacts on employers of other employment-law changes (especially regarding agreements), the update Agreements to perform work in 2026: New limits, contributions and employers’ obligations may also be useful. 

The obligation applies to employees whose work is classified under the Public Health Protection Act as risk category 3, specifically due to exposure to vibrations, cold, heat, or overall physical workload (in dynamic physical work performed by large muscle groups). This category may include, for example, warehouse workers, construction workers, or persons handling heavy machinery. 

Specifically, this means that the employer must pay exactly 4% of the assessment base from its own funds directly into the employee’s private old-age savings product, such as supplementary pension savings or pension insurance.

The employer is required to make this contribution for a calendar month (the relevant period) if, during that month, the employee works at least three shifts involving hazardous work. A hazardous shift is considered to be one in which the employee performs hazardous work for the predominant part of the shift. If a shift is shorter or longer than the standard 8 hours, each commenced hour counts towards this limit as one eighth of a hazardous shift.

However, there is hidden administration here that may catch you off guard. As an employer, you are required to inform the employee in writing (or electronically in a way that allows the employee to save it) about the right to this contribution before they start performing hazardous work at all. You must then issue the employee with confirmation of payment by the end of the month in which you pay the contribution for the first time.

At the same time, you are required to keep accurate records of hazardous shifts worked, the date the right was exercised, and the amounts paid, and you must retain these records for 10 years. If you fail to comply with these obligations, you face significant sanctions from the Czech Social Security Administration.

For many medium-sized and larger companies, this will mean necessary adjustments to HR and payroll systems to correctly identify employees in hazardous categories and automatically calculate hours worked for entitlement to arise. The attorneys at ARROWS can help you set up the right process and eliminate the risk of the regulator finding non-compliance.

Most common questions about the mandatory old-age contribution

1. How do we know which employees fall into work hazard category 3?
Work categorisation is carried out by the public health authority (the Regional Public Health Office) based on risk assessments and measurements of workplace environmental factors. Your employer should have the decision on the categorisation of individual job positions available.

2. Is the fine for failing to comply with the information obligation fixed?
It is not fixed, but its maximum amount may surprise you. The new law on the mandatory contribution to old-age savings products expressly provides that if an employer fails to fulfil its information obligation (i.e., does not inform the affected employee in writing or electronically about the right to this contribution before the start of hazardous work), it commits an administrative offence. For this offence, the local Social Security Administration may impose a fine of up to CZK 200,000. The amount of the fine is determined individually depending on the seriousness and repetition of the breach. We therefore recommend always fulfilling this information obligation and keeping verifiable records of it. 

Minimum wage and the end of “salary swaps” – a strict distinction between wages and benefits

As of 1 January 2026, the minimum wage in the Czech Republic is CZK 22,400 per month (for a 40-hour working week), or CZK 134.40 per hour. If you have part-time employees, the minimum wage is reduced proportionally – e.g., an employee working 20 hours per week should receive at least CZK 11,200 per month.

While increases in the minimum wage are common, the legal concept of benefits and their relationship to wages is changing fundamentally. Until now, the so-called “salary swap” practice was widespread, where the employer reduced the monthly wage and provided benefits on which no tax and social security contributions were paid.

This practice was advantageous for both sides, but legally it represented a grey area: it appeared to be a benefit while partially replacing wages. As of 1 January 2024 (and therefore also for 2026), these practices have come to an end. 

A benefit can be exempt from tax and contributions only if (1) it is non-cash in nature and (2) it is genuinely in addition to wages, not a substitute for them. If you try to pay part of wages in the form of benefits to avoid taxes and contributions, you risk the tax authority reclassifying it and assessing social security and health insurance retroactively, including fines and penalties.

The new rules introduce specific limits for non-cash benefits exempt from tax, divided into two categories. The annual limit for the use of educational or recreational facilities, tours, the use of preschool facilities, sports and physical education facilities, or contributions to culture and printed books equals half of the average wage for the tax period. For 2026, this threshold is estimated at CZK 24,483.50.

However, a higher limit applies to the purchase of goods and services of a health, medical, hygienic, and similar nature from healthcare providers, or to the purchase of medical devices on prescription, namely the full amount of the average wage. Anything above these amounts in the relevant categories will be subject to income tax and subsequent social security and health insurance contributions.

By contrast, employer contributions to pension insurance with a state contribution, supplementary pension savings, life insurance, or a long-term investment product retain their preferential treatment – the employer may provide them up to a total of CZK 50,000 per year without taxes and contributions. This limit has not changed and remains an advantageous solution.

If you have used salary swap models to date, you must reassess them and find a new way to structure remuneration. The attorneys at ARROWS can guide your company through a redesign of compensation packages so that they comply with the new law while not increasing your costs more than necessary.

Most common questions about the minimum wage and benefits

1. If we had a salary swap and now the employees and the employer want to keep it, what happens?
Formally, this is wages being replaced by a benefit – so as of 1 January 2024 it is no longer legally permissible. If you insist on the original structure and do not properly separate wages and benefits, you risk reclassification by the tax authorities.

2. Are meal contributions still tax-exempt?
Yes, but with changes, Yes, but with changes that have unified the rules for all forms. Both the cash contribution (the so-called meal allowance) and non-cash benefits (classic meal vouchers or canteen catering) are exempt from income tax and contributions up to 70% of the upper limit of the meal allowance for a business trip lasting 5 to 12 hours. For 2026, this is approximately CZK 123.90 per day. If the employer provides more per day, the difference above this limit is subject to taxation and contributions for the employee. 

Flexible amendment to the Labour Code – changes to contractual relationships and leave

Important changes to the Labour Code were introduced by Act No. 120/2025 Coll. (the so-called “flexible amendment”), which became effective largely as of 1 June 2025.

Significant changes include that the probationary period can now be agreed for a maximum of four months (for managerial employees, up to eight months). However, if it was agreed for a shorter period, it can be extended subsequently in writing, but always only up to the limit of four or eight months, respectively. The only option would be to terminate the employment relationship and enter into a new one with a new probationary period, which is legally complicated and creates risks.

Employees caring for a child have the right to request a shorter working hours arrangement. The employer is obliged to comply unless serious operational reasons prevent it. If an employee returns from parental leave before the day the child reaches the age of 2, the employer is obliged to assign them to their original work and workplace. If they return later, the employer must assign them at least in accordance with the valid employment contract. 

This means that the employer must not invent a position where “nothing is happening,” but must provide them with genuine work corresponding to the agreed working hours. This creates new obligations for HR and increases the risk of disputes if the employer fails to provide a suitable position.

The lawyers at ARROWS, a Prague-based law firm, can help you set up the right HR processes and documentation so that they comply with the new rules and so that you avoid court disputes.

Most common questions about the flexible amendment

1. An employee is returning from parental leave – do we have to return her to the same position?
It depends on when she returns. If the employee (female or male) returns from parental leave before the day the child reaches the age of 2, you must assign them to their original work and workplace. If they return from parental leave later (e.g., when the child is 3 years old) and their original job has ceased to exist or the workplace has been closed, you are obliged to assign them at least to a position corresponding to the type of work agreed in their employment contract. 

2. What if, after the probationary period ends, we find that the employee is not a good fit?
During the probationary period, you can terminate the employment relationship easily for any reason or for no reason. However, once the probationary period has ended, your options as an employer are limited. Termination on your part must be based on a statutory ground. It is no longer enough to simply say “we don’t like you” – you must prove and justify, for example, failure to meet the requirements for performing the job, a serious breach of work duties, or an organisational change (redundancy). This reason should always be carefully documented. 

3. We have an employee on a part-time contract who is on maternity/parental leave – can they take on additional work under an agreement?
As a general rule under Czech employment law, an employee may have multiple employment-law relationships concurrently. If the additional work is for another employer, they need your prior written consent only if the new work would be the same as your scope of business (so-called competing activity). If it is additional work with you (the same employer), a very important exception applies: although it generally applies that an employee must not perform the same type of work for you under an agreement as under their main employment relationship, this restriction does not apply to agreements (DPP or DPČ) concluded for the period during which parental leave is taken. During parental leave, you can therefore conclude an agreement for the same work without concern. We recommend always specifying the duration of such an agreement correctly. 

Workplace accidents – digitisation and new reporting

As of 1 January 2026, the method of reporting and recording workplace accidents is changing. Government Regulation No. 322/2025 Coll. applies with a stronger emphasis on electronic formats – the trend is digitisation.

Whereas previously it was possible to submit reports in paper form, the focus is now on electronic reporting and recording of workplace accidents via the portal of the State Labour Inspection Office (SÚIP). This means it is no longer sufficient to send a paper form or an email. Specific electronic forms and tools must be used, which require a digital signature or employer access credentials.

The new rules also tighten the classification of accidents. A distinction is made between a fatal accident (the employee dies no later than one year after the accident) and a serious accident (hospitalisation longer than five days, life-threatening, or a mass accident). In addition, there is a distinction between an accident resulting in incapacity for work longer than three days (which is neither serious nor fatal) and a minor accident (without incapacity for work or with incapacity not exceeding three days).

A key detail: if the incapacity for work does not exceed three calendar days, you do not have to submit the accident report via the authority’s portal. However, the obligation remains to keep records of absolutely all accidents in the accident logbook, which every employer must keep without exception. This accident logbook may be kept electronically or in paper form.

For accidents resulting in incapacity for work longer than three calendar days (that are not fatal or serious), the employer is obliged to submit the accident record via the portal no later than 15 working days from the day they learned of the workplace accident. 

The new rules are based on the clear definition in the Labour Code. A workplace accident means an injury to health or the death of an employee, if it occurred independently of their will through short-term, sudden and violent action of external influences while performing work tasks or in direct connection with it. This means, for example, that an accident on the way to and from work is not considered a workplace accident. 

For employers, this is one of the areas where increased attention from labour inspections is expected in the Czech Republic in 2026. The lawyers at ARROWS, a Prague-based law firm, can help you set up internal processes for proper and timely accident reporting and also represent you in the event of identified errors or discrepancies.

Most common questions about workplace accidents

1. An employee allegedly injured their leg, but said it’s not serious – do we have to report it?
It depends on the length of the incapacity for work. If, as a result of the accident, temporary incapacity for work arises for longer than 3 calendar days, you must submit the accident record to SÚIP no later than 15 working days from the day you learned of the accident. The problem is that you may not know in advance how long the incapacity will last. The legally correct approach is to wait for the doctor’s decision, who will determine the length of the incapacity for work. If no incapacity arises or it does not exceed 3 calendar days, you do not submit the accident record to SÚIP. However, you must make an entry in your internal accident logbook for absolutely all accidents in every case. 

2. We have a paper accident record – is that still permissible today, or do we have to be electronic only?

You may keep the internal accident logbook in paper or electronic form – the new Government Regulation No. 322/2025 Coll. gives you a choice. However, submitting the notification and the formal accident record to the State Labour Inspection Office (and possibly other institutions) must be done electronically via the SÚIP portal. So you may keep a paper record in a notebook for your own purposes, but the reporting to the authorities must be done digitally in the forms and structure required by the authority. 

3. What if a workplace accident happens to an employee at home in connection with working from home performed for the company (e.g., they led a video conference in a home office and injured their leg themselves)?
This is a question where consultation with a lawyer often helps. The Labour Code defines a workplace accident as an injury to health that occurred due to sudden action of external influences while performing work tasks or in direct connection with it. The law does not examine whether the activity was “physically dangerous.” If an employee injures their leg, for example when standing up from a chair immediately after finishing a work call, this may meet the definition of an act necessary before the start of work or after its end. From the perspective of accidents, home office is assessed very similarly to work at the workplace. In uncertain and borderline cases where witnesses are lacking, we recommend consulting a lawyer on how to record and assess the situation correctly. 

Recruiting new employees – stricter rules for foreign nationals and illegal employment

The State Labour Inspection Office and regional labour inspectorates focus rigorously in their inspections on compliance with Czech employment-law regulations and on detecting illegal employment by employers.

Employment placement (e.g., through temporary assignment) may be provided by employment agencies only on the basis of a valid permit. In addition, a legal entity or an individual must meet stricter criteria in order to provide placement through the temporary assignment of employees, including the obligation to provide a security deposit of CZK 1,000,000. The Government may also, by regulation, precisely specify the types of work that an employment agency may not place in this manner at all.

When employing foreign workers, employers must comply with strict notification obligations. The employer must notify the relevant regional branch of the Labour Office of the Czech Republic no later than before the foreign national starts employment or begins performing work. If this obligation is not fulfilled, it constitutes so-called unreported work. 

If an employer employs a foreign national in breach of the issued permit (e.g., an employee card or EU Blue Card) or entirely without one, it commits the offence of enabling illegal work. For such an offence, a legal entity faces a fine of up to CZK 10,000,000 (with a minimum threshold set at CZK 50,000) and potentially also a ban on activity for up to 2 years.

Another area under scrutiny is work agreements. The Labour Code clearly provides that an employer should ensure the performance of its tasks primarily through employees in an employment relationship. Circumventing this rule and replacing employment contracts with work agreements is therefore risky. In addition, strict statutory limits must be observed for such agreements.

As regards remuneration, the inspection focuses on the correct setting of pay. Even for work agreements (DPP/DPČ), the remuneration under the agreement must not be lower than the minimum wage. The Labour Code also fully enshrines the principle of equal pay – for the same work or work of equal value, all employees of the same employer are entitled to the same wage, salary, or remuneration under a work agreement. At the same time, any discrimination against employees is strictly prohibited, for example on the grounds of gender, nationality, or age.

In practice, this means that employers should thoroughly review their HR policies and procedures – whether all workers are reported to the authorities in time before starting work, whether HR practices meet the requirements for equal treatment and equal pay, and whether any employee monitoring is carried out strictly within the limits of Czech law. The attorneys from ARROWS advokátní kancelář can audit your recruitment and employment processes and also represent you in the event of a labour inspection.

Potential issues

How ARROWS helps (office@arws.cz)

Failure to register an employee in JMHZ before commencement: a fine of up to CZK 100,000, delays in reporting to the state.

We will set up internal HR procedures and processes so that registration is always completed on time. We will provide legal support in configuring the JMHZ system and handle any errors or communication with the authorities.

Failure to comply with the information obligation regarding increased pension insurance contributions for high-risk professions: a significant fine may be imposed.

We will help you identify employees in work risk category 3, and prepare written information and internal measures. We will ensure that all employees are duly informed and that documentation is kept proving that the information obligation has been fulfilled.

Salary swap or other trial benefit structures: that would not comply with the new law; retroactive recovery of taxes and insurance contributions.

We will audit your compensation package, identify problematic practices, and propose a new benefits structure that will be compliant with the law. We will represent you in dealings with the tax authority if needed.

Incorrect reporting of a workplace injury: (e.g., deadlines, form), a fine or a dispute with the labour inspector.

We will set up processes for recording and reporting workplace injuries. We will ensure you use the correct portal and meet the deadlines. In the event of an inspection, we will represent you and explain the procedures to the inspector.

Illegal employment of foreign nationals or unlawful placement: high fines and criminal liability.

We will provide legal advice on employing foreign nationals and verify the correctness of all notification obligations and documentation. During inspections, we represent you and defend you against suspicions of illegal work.

Conflicts with employees regarding holiday entitlement, obstacles to work, or return from parental leave: litigation.

We will advise you on how to properly document the reasons why an employee could not take leave or return to the same position. We represent you before Czech labour courts and defend your position vis-à-vis employees.

Final summary

2026 is a year of a record number of legislative changes for Czech employers. The Single Monthly Report, mandatory increased pension insurance contributions for high-risk professions, a clear separation of wages and benefits, digitalisation of injury reporting, and stricter inspections targeting illegal employment.

If you thought you could ignore training on changes in employment law, now is the right time to reconsider. In practical terms, this means that HR departments and lawyers should go through these changes systematically, verify which ones apply to their specific company, and set up processes so that mistakes do not occur.

A fine for failing to register an employee can cost CZK 100,000; other procedural failures can cost hundreds of thousands; and in worse cases (e.g., illegal employment) it can mean tens of thousands or even criminal liability. Every mistake costs you time and money.

The attorneys from ARROWS advokátní kancelář address these employment law changes systematically and know how to guide you safely through the pitfalls of the new year. We can help you set up HR processes, review your contracts and internal policies, verify compliance with statutory obligations, and represent you in dealings with inspectors or public authorities. Contact us at office@arws.cz and we will guide you safely through the entire process.

FAQ

1. Do we have to implement the changes related to the new legislation immediately and across the board for all employees? Isn’t it too big an intervention?
Yes, it is a major intervention, but you do not have to do it overnight. Some changes apply to all employers (minimum wage, JMHZ), while others apply only to certain groups (the contribution for high-risk professions). We recommend starting with an analysis of which changes affect you and then implementing them gradually. 

2. If we have already had a fine in the past for failing to meet an obligation, will regulators target us more now?
Yes, inspections often focus on repeat offenders – i.e., companies that have breached the law before. If you have a history of non-compliance, it is even more important that your processes are now absolutely correct. This is a good time to request an external audit and advice.

3. How can smaller companies that do not have an in-house lawyer prepare for these changes?
Start by reading this summary and identifying which changes apply to you. Then engage an external lawyer for a consultation – it will not be expensive, and it will help you understand exactly what you need to do. The attorneys from ARROWS advokátní kancelář also offer legal advisory packages tailored to the size and needs of small and medium-sized companies.

4. What if I believe we did everything correctly, but the inspection finds an error I did not see?
This is exactly why legal advice and representation exist. If an inspection takes place and finds something that seems odd to you, contact an attorney from ARROWS advokátní kancelář – it will not come as a surprise to you and you will have time to find out what happened. We can also represent you during the inspection.

5. Which of these changes do you consider the most important for us to address first?
The Unified Monthly Report (JMHZ) is probably the most complex and has a fixed timetable – if you do not do it correctly from 1 April 2026, you will be creating problems for yourself. The second priority should be a review of remuneration and benefits – there is a risk of retroactive recovery of fines and insurance contributions. The third priority is setting up processes for the new obligations regarding increased pension insurance contributions and accident reporting.

6. We are planning major recruitment this year – how will this change under the new rules?
Recruitment will be somewhat more complicated – you will have to register each employee for social security purposes in the JMHZ before they start. In the case of foreign nationals, you must comply with the new rules on agency employment and reporting. 

Disclaimer: The information contained in this article is for general informational purposes only and serves as a basic guide to the issue as of 2026. Although we strive for maximum accuracy, laws and their interpretation evolve over time. We are ARROWS Law Firm, a member of the Czech Bar Association (our supervisory authority), and for the maximum security of our clients, we are insured for professional liability with a limit of CZK 400,000,000. To verify the current wording of the regulations and their application to your specific situation, it is necessary to contact ARROWS Law Firm directly (office@arws.cz). We are not liable for any damages arising from the independent use of the information in this article without prior individual legal consultation.

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