Recruiting Top Talent

Top Talent in the Czech Republic

Hiring the right talent in the Czech Republic to expand your company can result in a thriving business with numerous opportunities. However, the recruitment process can be complicated when you have no physical presence in the country yet. Our PEO and EOR services can be a solution for your company.

Recruitment can be a tricky business, especially when a company is venturing into unfamiliar countries and exploring new markets. This is the perfect occasion to bring in a specialist to oversee the process for you.

Bradford Jacobs’ benchmark platforms as a Professional Employer Organization (PEO) have worldwide reach and include a total understanding of the challenging complexities of the Czech economy and employment market. You can trust Bradford Jacobs to put the brightest talent in place for your company.

Our comprehensive knowledge of all Czech employment sectors and understanding of the culture and customs guarantee an untroubled transition. Look through our guide to familiarize yourself with everything an employer needs to know about the recruitment process in Czechia.

Recruiting Top Talent

Finding and recruiting top talent in any overseas territory creates many potential issues for companies building their international profile and looking for Global Expansion.

The Czech Republic is a leading target for international expansion, as a major player in the Central and Eastern European (CEE) economic bloc with a rapidly developing entrepreneurial market.

CEE countries display a pro-business culture, growing consumerism and rising living standards with cost-effective, highly skilled, and productive workers.

The Czech Republic is a prime mover in the ‘V4 Group’ alongside Hungary, Poland, and Slovakia, which led to integration with fellow members of the European Union (EU). The automotive industry accounts for close to 80% of Czech exports, while service industries account for around 60%.

GDP is projected to grow to 276 billion US dollars in 2021, placing the Czechs 48th largest in the world. Other key sectors of the Czech economy are aviation, transport engineering, pharmaceuticals, machinery, and tools.

This potential underlines why Bradford Jacobs’ global experience in recruiting the best candidates for your company is indispensable for taking the smartest route into the Czech Republic – ideally placed for expansion into the EU, CEE and further afield.

Bradford Jacobs’ benchmark platforms as a Professional Employer Organization (PEO) have worldwide reach and include a total understanding of the challenging complexities of the Czech economy and employment market. You can trust Bradford Jacobs to put the brightest talent in place for your company.

The Recruitment Process in Czech Republic

Czech organizations often prefer to recruit staff through postings on their own websites, by head-hunting candidates with the best references and a profile that matches their requirements, and through media ads. Specialist recruiters for certain sectors and sites such as LinkedIn also play a role.

Czech is a difficult language, so recruiters among major Czech companies often look for those fluent in English – the language of business – and German, their nearest trading partners.

Recruitment is the first stage of making your company operational and competitive in the Czech Republic. It is vital to know where to locate the finest talent to be a perfect fit for your company’s expansion plans.

Foreign companies planning to open a subsidiary before locating and onboarding staff face a series of procedures to comply with Czech law and any European Union (EU) directives. 

Procedures include:

• Choosing a unique company name and registering with the Czech Registry Court and the Commercial Register to obtain a Tax Identification Number (TIN)
• Proof of business address and ownership or lease agreement for the office
• Details of business activities and relevant authorized trade certificates
• Notarized Memorandum and Articles of Association
• Proof of capital deposited in the bank, if required
• Signatures of shareholders, directors, and managers with an extract from the Criminal Registry proving clean record for each

The next steps apply to companies running their own payroll after recruiting staff. They must obtain employer social security and tax numbers, register to pay taxes, and register employees with social security authorities. The necessary formalities include:

• Applying to the Ministry of the Interior for an Employee Card, if applicable, for a foreign national planning long-term residence in the Czech Republic
• Obtaining employees’ Tax Identification Numbers (TIN)
• Remitting employees’ withheld deductions to the General Financial Directorate and the Social Services Administration
• Filing returns for the tax year, which runs from January 1 to December 31. Returns are due by April 1 of the next year, May 1 if filed electronically or July 1 if sent by an accountant or solicitor who has registered their power of attorney by April. 

Additional payroll procedures include:

• Calculating employees’ monthly salary and sending their pay slips 
• Submitting employees’ and employers’ wage tax returns
• Creating and submitting the company’s annual accounts and year-end statements
• Creating payment schedules for salaries and insurance contributions
• Ensuring accurate personal income tax returns are filed for the company and the employees when required

There is a smart alternative. Bradford Jacobs’ global Professional Employer Organization (PEO) networks locate and recruit your staff – our Employer of Record (EOR) specialists handle every aspect of registering your new employees and dealing with the tax and social insurance authorities. You know it makes sense.

Legal Checks you can make on Czech Republic Employees

Restrictions on legal checks made as part of pre-employment screening also apply to existing employees and derive from the Labour Code, data protection and personal rights. Generally, employers can require information only related to the role.

Regulations are not clear cut but generally follow these guidelines:

• Discrimination: Employers are prohibited from asking questions regarding sexual orientation, racial or ethnic origin, political or religious beliefs or affiliations. These restrictions also apply to third-party agencies asked to carry out pre-hire screening.
• Criminal record checks: Permitted, depending on the relevance to the role.
• Credit checks: Allowed if relevant to the proposed role, for example, handling cash or a position with financial responsibility.
• Health checks: Permitted if relevant to the role. Female applicants can be asked about pregnancy if the role would endanger their health.
• Qualifications and References: Potential employers are allowed to ask for verification.
• Documentation: This is a required check to confirm that a non-Czech applicant has the legal right to work in the Czech Republic, regarding work permits and visas.

Basic Facts on Hiring in Czech Republic

Companies employing staff in the Czech Republic must comply with various requirements for hiring and onboarding:

• The Labour Code requires a written contract to be agreed upon before employment begins and must include the start date and the type and location of work
• Employers must give extra written details on working hours, vacations, severance etc. and terms can only be changed in writing by mutual agreement
• Applying to the Ministry of the Interior for an Employee Card/EU Blue Card for any foreign national planning long-term residence
• Obtaining employees’ Tax Identification Number (TIN)
• Remitting employees’ withheld deductions to the General Financial Directorate and the Social Services Administration
• Filing returns for the tax year (Jan 1 – Dec 31). Returns and outstanding tax are due by April 1 of the following year, May 1 for electronic filing or July 1 if sent by an accountant or solicitor with power of attorney, provided they registered before April 1

After hiring and onboarding, the employer must comply with various minimum entitlements for employees, as stipulated by the Labor Code and other laws, including the following:

• The Minimum Wage is CZK 15,200 (€592, US$690) per month, applying to employees working the standard 40 hours per week. Different minimums apply to eight employment groups as determined by the Czech government decree.
• Mandatory participation in the healthcare system applies to all Czech employers and their staff; employees from other European Union countries; employees working in the Republic for companies based in other EU countries and the self-employed. The employer contributes 9% and the employee 4.5% of the employee’s income to the health social insurance fund.
• The working hours’ maximum is 40 in a five-day week, usually between 08:00 and 18:00. There must be a 30-minute break after six hours’ continuous work; 11 hours rest between consecutive working days and 35 hours continuous rest each week. Hours exceeding the norm are overtime, which must not exceed eight weekly or 150 annually.
• Maternity leave normally totals 28 weeks (or 37 for multiple births) with six to eight pre-natal. The minimum permitted leave is 14 weeks; post-natal leave must not be interrupted or ended before six weeks. Maternity benefit is 70% of the mother’s wage to a limit of CZK 43,470 (€1,700, US$1,961) monthly. Paternity leave is set at 70% of the employee’s daily earnings, capped at CZK 8,575 (€334; US$387) for the seven-day leave which can be taken post-natal at any time during the first six weeks but as one period.
• Termination and Severance: Where a company terminates employment due to reorganization, severance pay is one month’s salary for the first year’s employment, two months for the second year and three months for those who have worked more than two years.
• Discrimination: Under the Equal Treatment and Prohibition of Discrimination Act, employees can expect protection against discrimination regarding gender or sexual orientation, racial or ethnic origin, religious or political beliefs, physical or mental disability or age.

There is a simple answer to avoiding compliance with these time-consuming procedures. Engage with Bradford Jacobs as your Employer of Record (EOR). We will convert your expansion blueprint into an action plan for the Czech Republic, as follows:

1. Bradford Jacobs step in as EOR through our legal Czech entity to guarantee your employees comply with employment contracts, payroll, HR, tax and, where required, visas and work permits
2. You have daily control of your employee, while Bradford Jacobs manage all work-related registration formalities
3. Your employee completes time sheets and approved expense claims and we invoice you, the client. Once paid, we remit all contributions to the Czech tax and social security authorities and transfer the balance into the employee’s nominated account

Within a few days, your company has an international presence in the Czech Republic, in a prime position for expansion without having risked the initial expense, commitment or hassle of setting up your own subsidiary or branch office. Make contact today.