2026 through the eyes of entrepreneurs: new obligations, higher penalties and more administration

Year 2026: more reporting, more control and less room for error

For businesses and employers, 2026 represents a major turning point in the government’s approach to record-keeping, control and penalties. It is not one isolated amendment, but a set of changes that together create an environment where there will be no more room for informal practices, improvisation or reliance on “everybody does it this way”. The state is placing increasing emphasis on predictability, digitalisation and employer accountability, regardless of the size of the company.

Information and record-keeping obligations are expanding significantly, with many of them moving to electronic systems. While this may simplify administration in the long term, it means increased demands on data accuracy, timeliness of reporting and alignment of internal processes in the transition period. Errors that previously went unnoticed or were dealt with by agreement may now lead to automatic sanctions – often regardless of whether they were deliberate or simply administrative errors.

A typical feature of the new arrangements is also the employer’s responsibility for the system, not just the outcome. It is therefore not enough that wages ‘fit’ or that the employee gets what is due in the end. What matters is whether all the legal procedures, information obligations and deadlines have been met. It is these formal aspects that the audit authorities will focus on.

The year 2026 thus sends a clear signal: ignorance will not be an excuse and even good faith may not protect the entrepreneur from sanctions. Those who do not set up their processes in time and adapt to the new rules risk not only fines but also unnecessary litigation and wasted time.

Uniform monthly employer reporting: an administrative revolution in practice

One of the biggest changes that 2026 brings for employers is the introduction of the Single Monthly EmployerReport (SMER). This new system fundamentally changes the way companies submit data to the state about their employees. Instead of submitting dozens of different forms to the Czech Social Security Administration, the Tax Administration or the Labour Office, employers will now submit a single summary report – but with significantly broader content.

The JMHZ does not just replace the administration, but changes the logic of the registration. Employers will also have to report data they have not systematically tracked so far, such as detailed information on types of employment relationships, income, hours worked or certain personal characteristics of employees. This places new demands on payroll systems and companies’ internal processes.

The implementation of the JMHZ is taking place in three phases. From January 2026, employers must collect the new data, even if they do not yet send it. From April 2026, sharp reporting will begin, including backfilling data for the first months of the year. Then from July 2026, full operation will start, with employees having to register in the system before they start work, not afterwards.

The penalty aspect is also crucial. Incomplete, erroneous or late reporting is subject to fines of thousands of crowns per employee, which can be very costly for smaller companies. The JMHZ is thus not just a technical change, but a test of the readiness of entrepreneurs for the new, stricter state control regime.

Compulsory savings contribution for risky jobs: who is affected and where entrepreneurs most often make mistakes

As of 1 January 2026, a new financial and administrative obligation for some employers will arise – a mandatory contribution to retirement savings products for employees performing certain risky jobs. However, this is not an across-the-board obligation for all businesses, and this is where a number of mistakes arise in practice that can lead to unnecessary penalties.

The allowance only applies to employees classified in risk category 3, and only for selected factors, namely vibration, cold, heat and the overall physical strain of dynamic work with large muscle groups. On the other hand, employees classified in category 3 for noise, dust, chemicals or radiation are not eligible for this allowance. Employers must therefore beware of automatically identifying ‘hazardous work’ with the obligation to pay the allowance.

Another common mistake is to overlook the information obligation. The employer must inform each employee concerned in writing of his or her right to the allowance and how to claim it. This obligation also applies retrospectively to employees who are already performing hazardous work on the date of the law’s entry into force, and within a very short period of time. Failure to comply with the information obligation may lead to a fine of up to CZK 200,000.

Moreover, the allowance does not arise automatically – the employee must claim it. Once this is done, the employer must keep detailed records, pay the allowance regularly and issue the employee with a receipt. It is the combination of the relatively narrow scope of the work concerned and the high penalties that make this regulation a typical “trap” for inattentive employers.

Flexinovela of the Labour Code: changes that are already in force but are still being violated

The Flexinovela of the Labour Code, effective from 2025, has brought a number of changes to make HR management easier for employers. However, practice shows that these “flexible” tools are often misapplied and become a source of unnecessary offences and fines. In addition, stricter control activities by the labour inspectorate are expected in 2026, and it is therefore appropriate to revisit these changes.

One of the most frequently overlooked innovations is the extension of the probationary period. It can now be negotiated for up to four months for ordinary employees and up to eight months for managers. At the same time, the probationary period can be extended in writing, but only during its duration and only up to the statutory maximum. Errors in this area are no longer just a question of the invalidity of the arrangement – the law explicitly qualifies them as an offence, for which a fine of up to CZK 2 million can be imposed.

Another fundamental change is the running of the notice period, which now starts (with exceptions) on the date of delivery of the notice, not on the first day of the following month. Employers who continue to rely on the old interpretation risk disputes over the validity of the termination of the employment relationship as well as erroneous calculations of wage compensation.

Another important but often underestimated innovation is the prohibition on restricting employees from sharing their wage information. Non-disclosure clauses concerning one’s own salary are now invalid and their use is an offence punishable by a fine of up to CZK 400,000. Flexinovela thus shows that even apparent formalities can have very real financial consequences in 2026.

Criminal law and entrepreneurs: why it is no longer just about “big cases”

The changes in criminal law, which will be phased in from 2026, may at first sight seem far removed from ordinary business. But the opposite is true. The new legislation increasingly focuses on economic and property offences and significantly expands the range of situations in which criminal liability may also fall on self-employed persons and small businesses, not just large corporations or well-known media cases.

One of the main trends is the strengthening of financial penalties as a possible alternative to imprisonment. Courts can now impose them for a much wider range of offences and the amount of the penalty is based not only on the offender’s income but also on the seriousness of the offence. In addition, unpaid fines are converted into prison sentences at a rate of one day per day, which increases the pressure to actually pay them.

The possibility to impose a penalty of prohibition to receive subsidies, subsidies or prohibition to participate in public procurement, also on natural persons, is a very noticeable impact for entrepreneurs. This penalty can be imposed for up to 20 years and for self-employed persons or small companies that depend on public contracts or subsidies, it can mean the de facto liquidation of their business.

The changes also affect property crime. For repeat theft and other property offences, criminal rates are reduced, but at the same time more emphasis is placed on individual case assessment and offender responsibility. For businesses, this means that criminal law is becoming a more subtle tool, but one that is also more frequently used where previously things only ended in misdemeanour or administrative proceedings.

What doesn’t bring responsibilities yet, but will soon bring problems

In addition to the changes that affect businesses as early as 2026, there is a group of legal changes that do not yet require immediate compliance, but underestimating them may not pay off significantly in the near future. Typically, these are areas where the state and the European Union are setting up a new regulatory framework and businesses are given time to prepare – but not to sit idle.

The first example is the so-called Children’s Certificate, which is due to come into force in 2027. It will be a special statement of conviction for those working with children. Although the obligation has not yet taken effect, employers in education, sport, health, leisure or social services should already expect to have to adjust recruitment processes, internal regulations and personnel documentation.

The EU’s Artificial Intelligence Regulation (AI Act) is similar. It will not come into full effect until 2026 and 2027, but it is already clear that it will impact smaller companies that use AI tools in, for example, recruitment, performance reviews or marketing. This is not just a technology issue, but a responsibility for how these tools are used.

NIS2, the new cybersecurity regime, also deserves a brief mention. Even businesses that are not directly affected by the regulation may encounter it indirectly – for example, through the requirements of larger business partners. The common denominator of these changes is that the time to prepare is already running now and a later “last minute” solution may be significantly more expensive.

Summary

The year 2026 marks a significant shift for businesses and employers towards more rigorous record keeping, digitalisation and accountability. New reporting systems are being introduced, information obligations are being extended and the sanction regime is tightening, often for formal misconduct. Key issues are uniform monthly employer reporting, new obligations for hazardous work and more rigorous monitoring of compliance with labour law.

At the same time, the criminal law environment is changing, increasingly affecting self-employed workers and smaller companies, and there are further regulations on the horizon for which it is advisable to prepare in advance. The common denominator in all the changes is that improvisation and reliance on informal procedures may no longer be enough. Those who do not catch the new obligations in time risk not only fines but also serious consequences for their business.