Labor Law 2026: Key Legislative Changes and Trends

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 period (the period before reaching retirement age). The amount of the contribution is 4% of the employee's assessment base, with the assessment base being the same as the employee's assessment base for social security insurance premiums.

When does the employee become entitled?

An employee is entitled to the mandatory contribution only if they work at least three shifts in the given hazard category in the given calendar month. If at least 3 hazardous shifts are not worked in the given month, the employer is not obliged to pay the contribution. Also, bear in mind that a shift is considered hazardous only if the employee performed the 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 give the employer a written notice requesting the mandatory contribution.

Beware of the information duty!

The employer is obliged to inform every affected employee 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 the 3rd category (for the relevant factors) as of the effective date of the Act (1 January 2026), the Act sets a 15-day period for additional fulfillment of the information duty, i.e., until 16 January 2026. Failure to comply with the information duty may result in a fine of up to CZK 200,000 for the employer.

Furthermore, the employer is obliged to keep records of the mandatory contributions. In particular, they must record the list of employees performing hazardous work who have claimed the entitlement, including their names and dates of birth, the date the entitlement was claimed, 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.

In addition, 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 paid for the first time. 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 Single Monthly Report (JMHZ)?

From 2026, the so-called Single Monthly Report of Employers (JMHZ) is being introduced, replacing a number of forms submitted to the Czech Social Security Administration, the Financial Administration, and the Labour 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 up to dozens or hundreds of data points, including new data that companies have not systematically tracked so far, such as the highest level of education completed, income details, or reporting of agreements on work activity (DPČ) below the threshold.

Three phases of implementation

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

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

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

• From 1 April to 30 June 2026 – first live submissions

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

• From 1 July 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 should you not underestimate the JMHZ? The reporting will be subject to a strict penalty regime – for a non-submitted or late 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.), which could mean million-crown impacts for larger companies with a high number of employees.

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

Flexi-amendment to the Labour Code: summary of main impacts

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

Changes to 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 managerial staff. This gives companies more time to verify the skills of a new team member.

A crucial 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. Even before the flexi-amendment, the probationary period was extended by full-day obstacles to work (e.g., illness) and full-day annual leave. From 1 June 2025, it is extended by working days on which the employee did not work the entire shift due to an obstacle to work, annual leave, or unexcused absence from work (Section 35(5) of the Labour Code) – unexcused absence is a new addition to the reasons. The Supreme Court (judgment 21 Cdo 18/2026 of 24 June 2026, regarding the legislation effective until 30 June 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 analyze the 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, incorrectly agreeing or extending a probationary period is now classified as an offense for which a fine of up to CZK 2,000,000 can be imposed. This is not just about the invalidity of the agreement, but a real financial risk arising from a flawed HR process.

Notice of termination: How will the acceleration of processes affect your company?

There is a fundamental change 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 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 prerequisites 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 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 for which a fine of up to CZK 400,000 can be imposed.

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 remuneration 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 work performance (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.

Annual leave in 2026: who decides when it is taken and what must companies watch out for?

The employer decides when annual leave is taken. In doing so, it must take into account both operational reasons and the employee's legitimate interests, and it must notify the employee of the dates in writing at least 14 days in advance, unless the employer and employee agree on a shorter period. If leave is taken in several parts, at least one part must last 2 consecutive weeks, unless the parties agree otherwise (§ 217(1) of the Labor Code).

If the employer does not schedule the leave by 30 June of the following year, the employee may also set the dates. For leave for 2026, this deadline therefore ends on 30 June 2027. The employee must notify the employer of the leave in writing at least 14 days in advance, unless they agree on a different period (§ 218(4)). When employees can schedule their own leave and who actually decides when leave is taken is discussed in a separate article.

Leave can be carried over to the following year only at the employee's written request. The portion of leave for a given year exceeding 4 weeks (6 weeks for teaching and academic staff) may be carried over. The employer must then schedule the leave so that the employee uses it by the end of the following year at the latest. An exception applies to leave the employee could not take due to incapacity for work or maternity or parental leave (§ 218(2), (3) and (5)).

The employer may order collective leave only in agreement with the trade union and with the consent of the works council, and only where necessary for operational reasons. It may last no more than 2 weeks, or 4 weeks for artistic ensembles (§ 220).

The employer may not schedule leave during, among other things, a period of temporary incapacity for work or maternity, paternity or parental leave. During other obstacles to work on the employee's side, it may schedule leave only at the employee's request (§ 217(4)). Monetary compensation for untaken leave is due only upon termination of employment (§ 222(2)).

We recommend that employers take three steps: draw up a written leave plan, check remaining leave balances from the previous year before 30 June, and set out the approval rules in an internal regulation. The lawyers of ARROWS law firm prepare such regulations tailored 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 is ending. Its growth will now be predictable thanks to a valorization 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 (Notification No. 356/2025 Coll.).

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

Final summary

New obligations, strict deadlines, and high penalties present 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 duty 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 bodies. Our experience and emphasis on speed and quality are your guarantee of security and a smooth transition to the new legislative requirements.

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