How to Work with Czech Employment Contracts as a Portuguese Employer: What You Must Watch Out For

If you're a Portuguese business owner planning to hire Czech employees, you face a minefield of legal differences that can cost you up to CZK 10 million in fines or invalidate your employment agreements entirely. Czech employment contracts operate under fundamentally different rules than Portuguese labor law, and the recent amendments to the Czech Labour Code—effective June 1, 2025—have introduced stricter compliance requirements that catch even experienced international employers off guard.

Need advice on this topic? Contact the ARROWS law firm by email office@arws.cz or phone +420 245 007 740. Your question will be answered by "Mgr. Vojtěch Sucharda", an expert on the subject.

The written form requirement: A Non-Negotiable trap for Portuguese employers

Unlike Portuguese law, where employment contracts can be consensual and oral agreements are sometimes acceptable, Czech law mandates that every employment contract must be in writing before the employee starts work. This is not merely an administrative formality—it's a fundamental validity requirement that Portuguese employers frequently overlook.

If you allow a Czech employee to begin working based on a verbal agreement or a promise of "paperwork to follow," you create an invalid employment relationship from a Czech legal perspective. The consequences cascade rapidly: your confidentiality clauses become unenforceable, intellectual property rights assignments are void, non-compete agreements hold no legal force, and you face severe penalties for "undeclared work."

Even worse, recent amendments effective October 1, 2025, explicitly classify starting work before all documentation is registered as a criminal administrative offense, exposing your company to fines up to CZK 3 million (approximately EUR 120,000).

ARROWS handles the preparation of compliant Czech employment contracts daily, ensuring every mandatory element is present and enforceable. We've saved countless Portuguese clients from these validity traps by adapting contracts before the first day of work. For immediate assistance with employment contract preparation, write to us at office@arws.cz.

FAQ – Legal tips about contract form requirements

1. Can I use my standard Portuguese employment contract template in the Czech Republic?

No—this creates massive legal risk. Portuguese contracts lack the mandatory Czech elements and typically don't reflect Czech-specific regulations like probationary period limits, notice period calculations, or guaranteed wage requirements. ARROWS can prepare fully compliant Czech contracts that protect your interests. Contact us at office@arws.cz.

2. What happens if we only have a verbal agreement with our Czech employee?

From a Czech legal perspective, you don't have a valid employment relationship, exposing you to fines for undeclared work and rendering all contractual protections unenforceable. Rectify this immediately by contacting our legal team at office@arws.cz.

3. When exactly must the written contract be signed?

The employment contract must be executed in writing before the employee's first day of work. Recent amendments also require that all documentation be registered with the Labour Office before work commences. ARROWS ensures this critical timing is met. Reach out to office@arws.cz for assistance.

Mandatory contract elements: The three essentials plus hidden requirements

Czech law specifies three absolute minimum requirements that every employment contract must contain: the type of work (job title), the place or places of work, and the date of commencement. However, what appears simple on paper conceals complex legal traps that catch Portuguese employers unprepared.

The "type of work" cannot be vaguely defined as it might be in Portuguese contracts. Czech courts scrutinize whether this element clearly delineates the employee's responsibilities and whether it might constitute an illegal attempt to circumvent labor protections. A job title that's too broad ("consultant" or "specialist") can invalidate the contract; one that's too narrow can prevent you from assigning legitimate work tasks.

The "place of work" requirement differs fundamentally from Portuguese practice. While you can specify multiple locations or even the entire Czech Republic, you must clearly establish who determines where the employee works on any given day. Ambiguity here has led to court battles where employees successfully challenged work assignments.

Beyond these three statutory essentials, Czech law imposes a separate, mandatory obligation to inform employees in writing about additional conditions: annual leave entitlement, notice periods, weekly working hours and schedule, salary details, and any applicable collective bargaining agreements. Portuguese employers often assume these can be communicated verbally or through company handbooks—a dangerous misconception. This information must be provided in writing, either within the contract itself or in a separate written notice, before work begins.

Even more complex, the requirement to specify salary deserves special attention. While not technically required in the contract text itself, the salary must be agreed upon before work commences, and failure to document it properly exposes you to claims and penalties. The minimum wage in the Czech Republic is CZK 20,800 per month (approximately EUR 832) as of January 2025, with higher guaranteed wage levels for public sector employees.

ARROWS prepares employment contracts that satisfy all these requirements while protecting your business interests through enforceable confidentiality, IP assignment, and termination clauses. We handle this documentation daily for over 150 joint-stock companies and 250 limited liability companies. For contract drafting that prevents costly errors, contact us at office@arws.cz.

Probationary periods: Fundamental differences from Portuguese law

The probationary period regime represents another critical divergence between Portuguese and Czech employment law. Portuguese employers accustomed to 90-day probation periods for regular employees, 180 days for highly qualified workers, and 240 days for senior managers will find the Czech system operates on entirely different principles.

Under the recent "flexi-amendment" to the Czech Labour Code effective June 1, 2025, the maximum probationary period for regular employees extends to four months (previously three months), and for managerial employees to eight months (previously six months). Critically, for fixed-term contracts, the probationary period cannot exceed half the agreed duration of the employment relationship—a rule that doesn't exist in Portuguese law.

The amendment introduces another complexity unfamiliar to Portuguese employers: probationary periods can now be extended during their duration through written agreement, as long as the total doesn't exceed the statutory maximum. Additionally, probationary periods automatically extend by the number of days the employee is absent, even for excused absences like illness—a mechanism that requires careful tracking.

Termination during probation also differs fundamentally. In Portugal, either party can terminate without notice in the initial part of the probation period, with notice requirements emerging only after 60 days (7 days' notice) or 120 days (15 days' notice). 

Czech law takes a different approach: during probation, either party can terminate the employment relationship with immediate effect upon delivery of notice, unless the contract specifies otherwise. No statutory notice period applies during probation, meaning the relationship ends the moment the termination notice is delivered.

These procedural differences create hidden risks for Portuguese employers who assume their home-country practices translate directly. ARROWS guides foreign clients through these distinctions daily, ensuring probationary periods are properly structured and documented. For legal consultation on probationary period compliance, email us at office@arws.cz.

Notice periods and termination: A completely different legal landscape

Perhaps nowhere is the disconnect between Portuguese and Czech employment law more pronounced than in notice periods and termination procedures. Portuguese employers must fundamentally reset their expectations when terminating Czech employees.

The 2025 flexi-amendment revolutionized how notice periods operate in the Czech Republic. Previously, notice periods began on the first day of the month following delivery of the termination notice and ended on the last day of the relevant calendar month—similar to some Portuguese practices. Now, the notice period begins on the day the notice is delivered to the other party and ends on the corresponding day of the final month. This seemingly minor change eliminates the artificial extensions that previously occurred and requires precise calculation.

The standard notice period in the Czech Republic is two months for both employer and employee—longer than many Portuguese scenarios but with critical exceptions. For terminations based on poor performance or serious duty breaches, the notice period shortens to one month. In contrast, Portuguese law requires notice periods ranging from 15 to 75 days depending on length of service, with substantially longer periods for employees with over 10 years of service.

The grounds for employer-initiated termination present another area of fundamental difference. Czech law provides an exhaustive list of reasons for which an employer may terminate employment, and termination outside these grounds is invalid. Portuguese employers accustomed to more flexible termination frameworks must understand that Czech law severely restricts when and how you can dismiss employees.

Moreover, the flexi-amendment extended the time limits within which an employer may give notice for duty breaches: the subjective time limit (from when the employer learns of the breach) extends from two to three months, and the objective time limit (from when the breach occurred) extends from one year to fifteen months. These extended periods reflect the Czech system's recognition that properly investigating and documenting misconduct takes time—but they also create longer windows during which employees can challenge your termination decisions.

Protected periods during which termination is prohibited represent yet another trap. Employers cannot give notice to employees who are pregnant, on maternity or parental leave, or temporarily incapacitated for work, except in specific circumstances. Violating these protections invalidates the termination entirely and can result in court-ordered reinstatement with back pay.

ARROWS handles employment terminations for Portuguese clients daily, ensuring compliance with Czech procedural requirements and minimizing the risk of costly litigation. We're insured for damages up to CZK 500 million, providing an additional layer of protection for your business. For representation in termination matters, contact us at office@arws.cz.

The "Undeclared Work" offense: A critical new risk from October 2025

If you read nothing else in this article, read this section carefully. An amendment to the Czech Employment Act effective October 1, 2025, introduces a concept called "undeclared work" (neohlášená práce) that creates severe penalties for a practice many foreign employers previously considered routine.

This offense occurs if you fail to register a foreign employee—and this explicitly includes EU citizens like Portuguese nationals—with the competent Labour Office before the employee commences work. The common past practice of handling paperwork shortly after an employee's start date is now a high-stakes violation carrying fines up to CZK 3 million (approximately EUR 120,000).

There is a narrow five-day grace period: if you report the employee within five working days and no inspection occurs in the meantime, the failure is still considered undeclared work but won't be punished. However, relying on this grace period is extraordinarily risky—if an inspection occurs before registration, you face the full penalty regardless of good faith.

Additionally, if an employee doesn't start work within 10 days of registration, you must cancel the registration. This creates a compliance tightrope where timing must be managed with precision. 

The consequences extend beyond monetary fines. Employers fined for illegal employment cannot obtain work permits for additional foreign employees and face restrictions on posting job vacancies through the Labour Office. For Portuguese companies planning to scale operations in the Czech Republic, a single undeclared work violation can cripple your hiring capacity.

Even more concerning, these new rules apply equally to EU citizens. Portuguese employers sometimes assume that hiring other EU nationals involves minimal bureaucracy—a potentially catastrophic misconception in the Czech context.

ARROWS has completely overhauled onboarding procedures for our Portuguese clients to ensure compliance with these new requirements. We handle the registration process, coordinate timing with HR departments, and implement systems that prevent employees from commencing work before all documentation is confirmed with authorities. This is precisely the type of daily operational reality that our international law firm based in Prague, European Union, manages for foreign clients. Don't risk a CZK 3 million fine—contact us at office@arws.cz.

Risks and Penalties	How ARROWS Helps (office@arws.cz)
Employee starts work before registration with Labour Office – fine up to CZK 3 million	Pre-work registration service ensuring all documentation is filed and confirmed before first day
Invalid employment contract due to missing written form – all contractual protections unenforceable	Preparation of compliant Czech employment contracts with all mandatory elements
Incorrect calculation of probationary period for fixed-term contracts – contract invalidity	Contract review and probation period structuring tailored to your hiring needs
Termination during protected period (pregnancy, parental leave) – automatic invalidity, court-ordered reinstatement with back pay	Termination procedure review and representation ensuring compliance with Czech protective provisions
Failure to register employee with social security and health insurance – penalties from multiple authorities	Complete payroll setup including social security, health insurance, and tax registration

Social security and health insurance: Employer obligations you cannot delegate

Portuguese employers must understand that Czech social security and health insurance systems operate differently from those in Portugal, creating employer obligations that cannot be avoided or delegated.

Every employer with Czech employees must register with the Czech Social Security Administration and relevant health insurance companies. You must calculate, withhold, and remit employee contributions for both social security (pension and sickness insurance) and health insurance, as well as pay your own employer contributions.

For standard employment relationships, the employer pays 24.8% of the employee's gross salary for social security contributions, while the employee contributes 6.5%. Health insurance requires an additional 9% from the employer and 4.5% from the employee. These contributions must be paid by the 20th day of the following calendar month.

Recent changes effective January 2025 increase the minimum wage to CZK 20,800, which directly impacts the minimum assessment base for health insurance contributions. If the employee's salary falls below minimum wage (which would violate the law), you must calculate contributions on the minimum wage amount anyway.

The complexity multiplies for "agreements to complete a job" (dohody o provedení práce or DPP), a flexible work arrangement popular in the Czech Republic but unfamiliar to Portuguese employers. As of July 2024, employers must register every employee working under such agreements regardless of income level and report their earnings monthly to the Social Security Administration. From January 2025, new rules based on percentages of the national average wage replace the previous fixed CZK 10,000 threshold.

Foreign employers often struggle with these administrative requirements because the systems, forms, and communications are primarily in Czech. The Czech authorities expect precise, timely reporting—mistakes trigger penalties that accumulate rapidly.

For Portuguese employers without a permanent establishment in the Czech Republic, the obligations become even more complex. If you hire Czech residents remotely, you may still trigger tax withholding obligations, social security registration requirements, and mandatory employer liability insurance. Determining these obligations must be done case-by-case, and the wrong assessment exposes you to penalties from multiple government agencies simultaneously.

ARROWS acts as the bridge between foreign employers and Czech administrative systems. We handle social security and health insurance registration, prepare monthly reports, ensure contributions are calculated correctly, and maintain compliance with constantly changing requirements. Our firm operates in 90 countries globally and manages these administrative burdens daily for Portuguese employers. For payroll and benefits compliance assistance, contact us at office@arws.cz.

Working time, overtime, and collective agreements: Subtle but critical differences

Czech working time regulations contain nuances that differ from Portuguese law, and violations can result in fines up to CZK 2 million from the State Labour Inspection Office.

The standard working week is 40 hours in both Portugal and the Czech Republic, but overtime rules diverge significantly. In the Czech Republic, overtime cannot exceed 8 hours per week and 150 hours per calendar year unless the employee agrees to more. With employee consent, the total overtime may not average more than 8 hours per week over 26 consecutive weeks (approximately 416 hours annually).

Portuguese employers sometimes assume they can require unlimited overtime with compensation, but Czech law treats overtime as exceptional and limits it strictly. Ordering overtime beyond statutory limits, even with payment, constitutes a labor law violation subject to penalties.

Overtime compensation is also structured differently. Czech employees receive 125% of their base wage for overtime, or time off in lieu if mutually agreed. Night work and weekend work require additional premiums (10% extra), and public holiday work mandates 100% extra compensation or a compensatory day off.

Collective bargaining agreements represent another area requiring attention. While generally applicable collective agreements don't currently exist in the Czech Republic for posted workers, if you employ Czech staff under standard employment relationships and a trade union operates at your workplace, collective agreements may apply. These agreements can modify notice periods, overtime limits, and other employment conditions in ways that override your standard contracts.

ARROWS reviews working time arrangements, overtime policies, and collective agreement applicability for Portuguese employers daily. We ensure your employment practices comply with Czech limits while maximizing operational flexibility. For working time compliance review, email us at office@arws.cz.

FAQ – Legal tips about working time compliance

1. Can we require employees to work more than 150 hours of overtime annually?

Only with the employee's explicit written agreement, and even then, total overtime cannot average more than 8 hours weekly over 26 consecutive weeks. ARROWS can draft compliant overtime agreements. Contact office@arws.cz.

2. Do we need to track overtime for managerial employees?

Yes—Czech law requires recording overtime for all employees without distinction, even if overtime compensation is included in their salary. We can establish compliant timekeeping systems. Write to office@arws.cz.

3. What happens if we violate working time limits?

The State Labour Inspection Office can impose fines up to CZK 2 million depending on the severity and frequency of violations. ARROWS can conduct a compliance audit to identify and rectify violations before inspections occur. Reach out to office@arws.cz.

Intellectual property rights and Non-Compete clauses: Enforceability under Czech law

Portuguese employers investing in Czech operations must understand how intellectual property assignments and non-compete clauses function under Czech law—the rules differ significantly from Portuguese practice.

For intellectual property created during employment, Czech law distinguishes between works created as part of job duties and those created outside the scope of employment. To ensure your company owns IP created by Czech employees, you must include explicit IP assignment provisions in the employment contract or a separate written agreement. NDAs alone don't cover IP created during the employment relationship—only pre-existing information.

Non-compete clauses in Czech employment law are strictly regulated and differ fundamentally from Portuguese non-compete agreements. Under the Czech Labour Code, non-compete clauses can last a maximum of one year after employment termination (compared to up to several years in some jurisdictions), and the employer must pay the former employee at least 50% of their average monthly earnings as compensation during the non-compete period.

Critically, non-compete clauses are only valid if adherence can be "justly required" from the employee given the nature of confidential information, knowledge, and know-how they acquired. This typically limits enforceable non-competes to managerial and key employees who genuinely possess sensitive competitive information.

Recent case law from the Czech Constitutional Court fundamentally changed the rules on employer withdrawal from non-compete clauses. Employers can now withdraw from a non-compete clause without providing a reason if the contract explicitly allows this, overturning previous court decisions that required justified withdrawal. This gives employers more flexibility but requires careful contract drafting.

Penalties for breaching non-compete clauses must be "reasonable"—generally no more than twice the total compensation paid for not competing. Portuguese employers accustomed to high liquidated damages for non-compete violations must adjust their expectations for Czech employees.

ARROWS drafts enforceable IP assignment and non-compete provisions tailored to Czech legal requirements while protecting your business interests. We handle these clauses daily for foreign employers and can advise on the enforceability of existing agreements. For contract review or IP protection strategies, contact us at office@arws.cz.

Posted workers: Special rules for temporary assignments

If you're posting Portuguese employees to work temporarily in the Czech Republic rather than hiring Czech residents, entirely different rules apply under EU Posted Workers Directives.

Any posting must be based on a service agreement between your company and a Czech recipient, or posting to a Czech branch/subsidiary of your group. The posting must be for temporary or occasional services that are simultaneously provided—permanent operations tied to one location are not permissible as "postings."

You must notify the relevant regional branch of the Czech Labour Office at least one day before the posted worker begins activities, providing identification data, type of service, work location, and duration. For postings exceeding 12 months, you must submit additional written notice explaining the extension.

Posted workers remain under your Portuguese social security system if you obtain A1 Certificates from Portuguese authorities confirming this. However, Czech working conditions apply, including rules on working hours, minimum wages, health and safety, and vacation.

All employment-related documents must be available at the Czech workplace during the posting, translated into Czech or Slovak. Failure to maintain proper documentation or register posted workers can result in fines up to CZK 100,000.

The administrative burden for posted workers is substantial, and mistakes trigger penalties even for temporary assignments. ARROWS manages posted worker notifications, ensures A1 Certificate compliance, and maintains required documentation for Portuguese employers sending staff to the Czech Republic. As a leading Czech law firm in Prague, EU, we handle cross-border posting arrangements regularly. For posted worker compliance, email us at office@arws.cz.

Risks and Penalties	How ARROWS Helps (office@arws.cz)
Overtime violations – fines up to CZK 2 million from Labour Inspection Office	Working time policy review and compliant overtime tracking systems
Unenforceable non-compete clause due to excessive duration or insufficient compensation	Non-compete clause drafting compliant with Czech one-year maximum and 50% compensation requirement
IP created by employees owned by employee rather than company due to missing assignment clause	IP assignment agreements ensuring company ownership of work-related creations
Posted worker not registered before work commences – fine up to CZK 100,000	Posted worker notification service with Labour Office registration and A1 Certificate coordination
Missing translation of employment documents during posting – administrative penalties	Document translation and workplace documentation management for posted workers

GDPR and data processing in employment: Another layer of compliance

Portuguese employers must remember that Czech employment relationships trigger GDPR obligations for personal data processing, requiring additional documentation and compliance measures.

When establishing an employment relationship, you process extensive personal data: identification information, contact details, salary and bank account information, social security numbers, health data for occupational health purposes, and potentially sensitive data for equality monitoring. Each category of data requires a lawful basis for processing—typically the employment contract itself or legal obligations imposed on employers.

Many Czech employment law specialists recommend signing a separate Data Processing Agreement alongside the employment contract, clearly documenting what personal data you'll process, for what purposes, and on what legal bases. While GDPR doesn't strictly require a separate agreement when processing is for employment purposes, having explicit documentation protects both parties and demonstrates compliance during inspections.

Employees have rights under GDPR that Portuguese employers must respect: access to their data, correction of inaccuracies, data portability, and under certain circumstances, erasure or restriction of processing. You must inform employees of these rights and establish procedures for handling requests.

Data retention is another critical issue. Czech labor law and social security regulations mandate retention of employment records for specific periods—you cannot simply delete employee data when someone requests erasure if legal obligations require retention.[67][63]

ARROWS prepares GDPR-compliant employment documentation, including data processing provisions and employee privacy notices. We also advise on data retention requirements and employee rights management. For GDPR compliance in employment, contact us at office@arws.cz.

Vacation entitlement and leave calculation: A complex formula

Czech vacation entitlement appears straightforward—four weeks minimum for private sector employees, five weeks for public sector workers—but the calculation method differs significantly from Portuguese practice and creates confusion for foreign employers.

Unlike Portugal, where vacation is typically calculated in days, Czech law calculates vacation entitlement in hours based on weekly working hours. An employee with a standard 40-hour workweek and four weeks of annual leave receives 160 hours of vacation (4 weeks × 40 hours). Part-time employees receive proportionally reduced entitlements.

The calculation becomes complex when employees haven't worked the full year. The formula involves the number of hours actually worked, absences that count as working time (with limits), and weekly working hours. Certain absences count toward vacation entitlement up to 20 times the weekly working hours; absences exceeding this threshold don't increase vacation entitlement.

From 2021, employees are entitled to annual leave even if they don't complete three full calendar months of work, as long as they've worked 60 days. This differs from the previous rule and from Portuguese practice in some sectors.

Portuguese employers must also understand that employees must be compensated for unused vacation upon termination of employment, calculated at the employee's average earnings from the preceding calendar quarter. This differs from Portuguese severance and vacation payment calculations.

ARROWS ensures vacation entitlements are correctly calculated, tracked, and compensated for Portuguese employers. We can review your existing HR policies and identify potential compliance gaps. For vacation policy compliance, write to office@arws.cz.

What happens when you get it wrong: Invalid terminations and Court-Ordered reinstatement

Perhaps the most sobering aspect of Czech employment law for Portuguese employers is understanding what happens when you make mistakes—particularly with terminations.

If a Czech court determines your termination was invalid—whether due to procedural errors, insufficient grounds, or violations of protected periods—the employee has the right to demand reinstatement to their original position. The court can order you to continue employing the person, and you must provide not only wage compensation for the period of litigation but also annual leave they would have accrued.

The recent flexi-amendment explicitly confirms this right to leave during litigation over invalid termination, responding to EU case law. This means an improperly executed termination can result in months or even years of back pay plus accumulated vacation compensation.

The financial exposure multiplies rapidly. For a managerial employee earning CZK 100,000 monthly, a court case lasting 18 months could result in CZK 1.8 million in back wages plus leave compensation, legal costs, and the administrative burden of continuing the employment relationship with someone who sued you.

Invalid employment contracts create different but equally severe problems. If your contract lacks mandatory written form or essential elements, the employee may work without a valid legal relationship, exposing you to fines for undeclared work while simultaneously claiming you violated their employment rights. Contractual protections like confidentiality, IP assignments, and non-compete clauses become unenforceable, leaving your business vulnerable.

Portuguese employers sometimes assume they can simply pay severance and resolve disputes, but Czech employment law heavily favors employee protection as the fundamental principle. Courts scrutinize employer actions closely and interpret ambiguities in favor of employees.

This is precisely why Portuguese employers need specialized Czech employment law expertise from the outset, not after problems arise. ARROWS prevents these costly mistakes through proper contract preparation, termination procedure review, and representation in employment disputes. We're insured for damages up to CZK 500 million, providing additional financial protection for your operations. For dispute prevention or representation, contact us at office@arws.cz.

The reality: Why this is more complex than it appears

Throughout this article, we've highlighted specific areas where Portuguese employers face legal traps in Czech employment law. The reality is that virtually every aspect of Czech employment relationships contains procedural details, cross-references to other regulations, and practical exceptions that aren't immediately apparent to foreign employers.

Consider a seemingly simple task: drafting a job description for the "type of work" element of an employment contract. This requires understanding Czech court precedents on what constitutes overly broad vs. overly narrow job definitions, knowing industry-specific conventions, anticipating how the description interacts with working time regulations and overtime calculations, and ensuring it doesn't inadvertently create illegal working conditions.

Or take a probationary period calculation for a fixed-term contract. You must know the contract duration, apply the "no more than half" rule, consider whether the employee qualifies as "managerial," document the probation in writing before work commences, and track any absences that extend the period. A single error invalidates the probationary period, potentially affecting your ability to terminate during what you believed was probation.

These complexities multiply across social security registration, health insurance contributions, working time tracking, vacation calculations, termination procedures, and data protection compliance. Each area has its own detailed regulations, administrative procedures, reporting deadlines, and penalty structures.

For Portuguese employers, the challenge intensifies because Czech labor law represents a fundamentally different legal tradition with different underlying principles from Portuguese law. Assumptions based on Portuguese practice—verbal agreements, flexible contract modifications, broad employer discretion in terminations—simply don't translate.

This is why ARROWS exists. As a leading Czech law firm in Prague, European Union, we handle these complexities daily for over 150 joint-stock companies and 250 limited liability companies, including many Portuguese employers. We combine deep knowledge of Czech employment law with understanding of foreign legal systems and business needs. Our international network, ARROWS International, operates in 90 countries, giving us unique insight into cross-border employment challenges.

ARROWS provides the complete range of services Portuguese employers need: employment contract drafting, internal policy preparation, regulatory compliance documentation, legal consultations to prevent penalties, representation before labor authorities and courts, work permit and residence permit assistance, professional training for your HR teams, and ongoing compliance monitoring as regulations change.

We're also regular partners of corporate lawyers for handling specialized employment matters, and we're known for speed and high quality. When business opportunities align, we can even connect clients with one another for investment or partnership opportunities.

For Portuguese employers, leaving Czech employment law compliance to ARROWS means you can focus on business growth while we ensure legal safety. Don't risk CZK 3 million fines, invalid contracts, or court-ordered reinstatements. Get tailored legal solutions by writing to office@arws.cz.

Risks and Penalties	How ARROWS Helps (office@arws.cz)
Invalid termination resulting in court-ordered reinstatement plus 12+ months back pay and leave compensation	Termination procedure review and representation ensuring legal validity
Misclassification of independent contractors as employees (Švarc system) – fines CZK 250,000 to CZK 10 million	Worker classification review and proper employment structure
GDPR violations in employee data processing – penalties under EU regulation	Data processing agreements and GDPR compliance documentation
Incorrect vacation calculation and compensation – employee claims and labor inspection penalties	Vacation entitlement calculation systems and HR policy review
Missing or incorrect collective agreement compliance – contractual terms invalidated	Collective agreement analysis and employment contract adaptation

FAQ – Most common legal questions about Czech employment contracts for portuguese employers

1. How long does it take to prepare a compliant Czech employment contract, and can we start someone immediately?

Preparing a fully compliant Czech employment contract typically takes 3-5 business days, depending on the complexity of the position and your specific requirements. However, you absolutely cannot start an employee before the written contract is executed and all registration with the Labour Office is complete—doing so triggers the undeclared work offense with fines up to CZK 3 million. ARROWS offers expedited contract preparation services for urgent hiring needs, ensuring all documentation is ready before your target start date. For immediate assistance with urgent hiring, write to us at office@arws.cz.

2. We have five Portuguese employees we want to relocate to our Czech branch. What's the most efficient way to handle their employment contracts?

For relocated employees, you have two main options: terminate their Portuguese employment and establish new Czech employment contracts, or maintain Portuguese employment and post them to the Czech Republic as posted workers. Each approach has different tax, social security, and compliance implications. Generally, for relocations exceeding 12 months, establishing Czech employment is more practical and compliant. ARROWS can analyze your specific situation, handle contract preparation, coordinate work permits if needed (for non-EU family members), and manage all registration requirements. Our firm handles these international transfers regularly as part of the ARROWS International network operating in 90 countries. Do not hesitate to contact our firm at office@arws.cz.

3. Our Portuguese employment contracts include a three-year non-compete clause. Can we enforce this for our Czech employees?

No—Czech law limits non-compete clauses in employment relationships to a maximum of one year after termination, and you must pay at least 50% of the employee's average monthly earnings as compensation during that year. Your three-year Portuguese non-compete would be invalid and unenforceable for Czech employees. ARROWS can redraft your non-compete provisions to comply with Czech limits while still protecting your legitimate business interests, including proper penalty clauses for breaches. Need a non-compete clause that actually works in the Czech Republic? Contact us at office@arws.cz.

4. What happens if we terminate a Czech employee using the same procedure we use in Portugal?

This is extremely risky. Czech termination procedures differ fundamentally from Portuguese law: notice periods calculate differently, the grounds for termination are exhaustively listed in law, protected periods prohibit termination entirely, and procedural requirements (written notice, trade union consultation, specific factual descriptions of grounds) are strict. Using Portuguese termination procedures in the Czech Republic will likely result in invalid termination, court-ordered reinstatement, and substantial back pay obligations. For termination procedure review, email us at office@arws.cz.

5. Do we need to provide severance pay when terminating Czech employees like we do in Portugal?

Czech severance pay rules differ completely from Portuguese law. Severance is only required for specific termination grounds (organizational changes, medical incapacity due to work injury/occupational disease, certain relocations) and is calculated differently—typically 1-3 months of average earnings depending on the ground. The Portuguese system of severance based on length of service (12-18 days per year) doesn't apply. Importantly, if you terminate for employee fault or performance reasons, no severance is typically due. ARROWS can calculate any required severance accurately and advise whether your termination ground triggers payment obligations. Get tailored legal solutions by writing to office@arws.cz.

6. Can we modify an existing employment contract if the employee's role changes, or do we need a new contract?

Employment contract modifications in the Czech Republic must be made in writing and by mutual agreement between employer and employee—you cannot unilaterally change contract terms. For significant changes to the type of work or other essential elements, you typically need either a written amendment to the existing contract or to terminate the old contract and establish a new one by agreement. Unilateral employer directives changing contractual terms are not permitted under Czech law and can be challenged as invalid. Our lawyers handle these modifications daily for foreign employers. Need legal help? Contact us at office@arws.cz.