Czech Republic Work Culture
To succeed in business in Czechia, it is vital for both employers and employees to have a strong understanding of the business culture. As a global PEO (Professional Employment Organization) it is our goal to be familiar and updated with the business culture in the country we work with and in. By sharing our knowledge about the Czech work culture, we want to support your global expansion plans. Therefore, we will address all the aspects of the work culture in the Czech Republic to start your expansion well-informed.
The Czech Republic is a strongly developing entrepreneurial economy in the Central and Eastern European (CEE) bloc and an increasingly attractive territory for companies launching international expansion. Planning your international growth alongside a Professional Employer Organization (PEO) such as Bradford Jacobs means you can count on customized solutions for locating staff in the Czech Republic within a week. CEE nations display a pro-business work culture, increasing consumerism and rising living standards with cost-effective, highly skilled, and productive workers. The Czech Republic is a prime mover as a member of the ‘V4 Group’, alongside Hungary, Poland, and Slovakia, which leads integration with fellow members of the European Union (EU). The Czech Republic, however, stayed out of the Eurozone and retains the koruna (CZK) as its currency.
The Czech government is making a sustained effort to attract and encourage investment and even went as far as to make the nation’s name less wordy by introducing ‘Czechia’ as the official short form in 2016. Various initiatives include tax relief schemes, EU subsidies, research and development tax allowances, job creation subsidies and more. Further incentives are available for businesses targeting specific industries. But foreign companies will find the work culture is bound to present new challenges and will need to adjust. So, it is time to ‘get down to business’! Here are a few tips on taking the right steps and avoiding the pitfalls:
Language: English is commonly used in business settings but play safe and check first if an interpreter is advisable.
Contact: Initial face-to-face meetings help to build trust in the relationship after you have made an appointment.
Punctuality: Being on time is valued as showing respect and being keen for the business relationship to grow.
Presentations: Meeting presentations are expected to be detailed and accurate with facts, figures, and charts to back-up your points.
Greetings: Start with a firm handshake and make eye contact and stand until invited to sit – you may have a designated place around the conference table.
Business Meetings: Introductory small talk will be a way of getting to know you and the first meeting may not move much past this as you may only be dealing with a middle manager at this stage. The corporate world tends to be hierarchical. Moving on in the relationship, subsequent ‘chat’ is likely to be brief with the meeting sticking close to the agenda in a generally formal atmosphere.
Younger companies are more likely to encourage a more relaxed attitude around the table. Avoid arranging meetings for Friday afternoons or during the holiday month of August.
Business Meals: Talking business around the lunch and dinner table is part of building the relationship.
Negotiations: These are generally courteous but building sufficient trust to reach a decision can take time. Beware – hesitancy by your opposite number can be a polite way of saying ‘No’.
Business Cards: Taking the trouble to have a Czech translation on the card will be noticed and appreciated.
Dress Code: Tends to be formal in the corporate world, although smart casual is becoming more common among the tech sector and in younger companies.
Sealing the Deal: Having reached a verbal agreement, make sure the ‘small print’ matches what was agreed around the table.
Czech Republic Minimum Wage
The Czech Republic (or Czechia) has a government-mandated national minimum wage of CZK 15,200 (€592, US$690) per month, applying to employees working the standard 40 hours per week. This was set in January 2021, an increase of CZK 600 (€23, US$27) over the previous rate. The new hourly minimum rate is CZK 90.50 (€3.52, US$4.10). The national minimum wage brings up the wages for the lowest paid workers, as different minimum wages apply to eight different employment groups as defined by government decree, according to the difficulty, responsibility, and complexity of the role. The absolute national minimum of CZK 15,200 applies to Group 1.
Minimum monthly wages range from CZK 16,800 (€654, US$761) for Group 2 (e.g., craftsmen and on-site workers) to CZK 30,400 (€1,183, US$1,378) for Group 8 employees such as financial and sales directors.
Probation Periods in Czech Republic
These are covered by the Labor Code (section 31) and are for three months maximum for most employees; however, for managerial staff, a six-month trial period is allowed. An employment contract approved by both parties can provide for a shorter trial period from day one of starting the job but cannot be increased at a later date once agreed upon.
Working Hours in Czech Republic
The working hours are a maximum 40 hours over a standard five-day working week and no more than a 12-hour daily shift (including overtime); normal hours are between 8am and 6pm. Some businesses may need flexibility regarding hours, and this is covered by the Labor Code. A 30-minute break applies after six hours’ continuous work, with a minimum 11-hour rest between consecutive working days and 35 hours continuous rest each week.
Any hours over what is considered the norm are deemed overtime, which cannot total more than eight per week or 150 annually without the employee’s agreement.
Collective Bargaining Agreements (CBAs) may apply more beneficial minimums.
Overtime in Czech Republic
Any hours over the daily rate contractually agreed between parties is considered overtime. However, no more than eight per week and 150 hours in a calendar year is allowed without the employee’s agreement.
Overtime is paid at 125% of the average earnings or, if agreed, time off in lieu.
Employees working their rest days or Saturday / Sunday should be paid a minimum of 110% of their average wage. Payment for public holidays is double time or a day off in lieu. Collective Bargaining Agreements (CBAs) may apply more beneficial minimums.
Notice Periods in Czech Republic
Notice periods should be the same for both parties, a minimum of two months, unless contractually agreed otherwise. When served, notice begins at the start of the following month for the two months or agreed period. There is no statutory right to pay in lieu of notice, but this can be contractually agreed. Employees do not need to give any reason for leaving whereas employers must justify termination as covered by the Labor Code. Workers cannot be served notice under certain circumstances e.g., pregnancy, illness, or military exercises.
Redundancy, Termination, Severance in the Czech Republic
Under the Labor Code stipulates dismissal can be only for three reasons:
- During a trial period
- Without notice for just cause
- With notice
Termination with notice is allowed on such grounds as company reorganization, inability to work due to long-term illness or unsatisfactory performance. Immediate dismissal without notice is permitted for criminal or gross misconduct. Generally, employees cannot be dismissed during sick leave, military, or public office duties, during pregnancy, maternity, or paternity leave. The relevant trade union must agree to the dismissal if the employee is a union representative.
If companies make multiple redundancies for the operational reasons the relevant labor authority must be notified. In this case severance pay is one month’s salary for the first year, two months for the second year and three months for those who have worked more than two years.
Severance pay for individuals is based on length of service:
- Less than one year – one month’s average earnings
- One to two years – two months’ average earnings
- More than two years’ service – three months’ average earnings
Termination due to occupational illness or injury entitles the individual to 12 times the average monthly salary.
Pension Plans in the Czech Republic
The state or public pension plan is administered by the Czech Social Services Administration (CSSA). Employers contribute 21.5% of payroll and employees 6.5% of earnings; self-employed persons pay all the required 28%.
There are three tiers to the pension system:
- voluntary schemes
Voluntary schemes are run by companies incorporated under the Commercial Code and strictly licensed by the Ministry of Labor and Social Affairs and the Securities Commission.
Public Holidays in the Czech Republic
Workers receive 13 statutory paid public holidays each year, which are not included in their annual vacation entitlement. These include:
- New Year’s Day – January 1
- Good Friday – March / April
- Easter Monday – March / April
- Labor Day – May 1
- Liberation Day – May 8
- Day of Apostles Cyril and Methodius – July 5
- Anniversary Martyrdom of Jan Hus – July 6
- Day Czech Statehood – September 28
- Independence Day – October 28
- Freedom and Democracy Day – November 17
- Christmas Eve – December 24
- Christmas Day Holiday – December 25-26