Recruiting employees on a performance contract (PCA) or a contract for work (FTE) is not as easy as it may seem. Even so-called contractors are subject to a number of obligations that the Labour Code has newly tightened. In this article, we look at everything an employer must comply with – from levies to working hours to holidays.
You must always conclude a work performance agreement (WPA) in writing – otherwise it is invalid. The agreement must contain basic elements such as the agreed work and remuneration. You can conclude it with one employee for a maximum of 300 hours per year. It is also compulsory to keep a record of the hours actually worked.
As regards insurance contributions, the situation has become stricter from mid-2024. The employer must pay social security and health insurance if the employee’s income is from a PPA:
At the same time, every employer must take out statutory liability insurance for occupational accidents and diseases, even if they only employ agreement workers. The minimum quarterly payment is CZK 100 if it is exclusively for agreement workers without a main employment relationship.
You must also enter into a written agreement with the worker. The average weekly working time under the LWW must not exceed 20 hours per week, averaged over the whole period for which the agreement is agreed (maximum 52 weeks). This means that the employee may work more hours some weeks and have other weeks off. However, you must keep records of the actual hours worked.
Health and social insurance is not deducted from the FTE only if the monthly earnings do not exceed the so-called qualifying income – i.e. CZK 4,000 per month (the applicable limit for 2025). Once this amount is exceeded, you are obliged to pay the insurance premiums in the same way as for regular employment.
And, as with the DPP, the employer must be insured against occupational accident or disease, even if he or she only employs workers on a DPP basis.
It is not easy to employ someone, even on a contract basis. Employment law can be complex and sometimes a small deviation from it can cause big problems later. We can help you navigate them and set up your employment documents in accordance with the law.
Every employer has a legal obligation to be insured against liability for occupational accidents or diseases – regardless of whether they employ workers on a contract of employment, a fixed-term contract or a temporary contract. If you employ only contract workers who do not earn the income required to pay the premium, you pay a minimum premium of CZK 100 per quarter. The insurance is paid four times a year – on 31 January, 30 April, 31 July and 31 October.
From mid-2024, there are changes to the contribution system for contract workers. From then on, there are two income thresholds that determine when the obligation to pay social security and health insurance arises. For 2025 they are set as follows:
Once one of these thresholds is exceeded, the employer is obliged to pay health and social insurance on behalf of the employee in the same way as for a regular employment relationship.
You must provide at least the minimum hourly wage for employees working on a temporary or part-time basis. For 2025, the minimum wage is CZK 132.10 per hour. If the agreed remuneration is lower, you must pay the employee the difference up to this amount.
You are also obliged to inform the employee of the working time schedule at least 3 days in advance in the case of agreements on work performance and work activity, unless you and the employee agree on a different period. This obligation is based on the Labour Code and also applies to short-term or occasional work.
Tip: Working out payroll for FTEs and FTEs can often be a complicated matter. Therefore, do not turn to the pay slip templates for FTEs and FTEs. These templates may be out of date and not contain all the essential information. Please contact us instead. You will get the most up-to-date form of your payslip – online and from the comfort of your home.
Employees working on a fixed-term or part-time contract are entitled to holiday if the agreement lasts at least 4 weeks and the employee works at least four times the agreed weekly working hours. For example, if the agreed weekly working time is 15 hours, the employee must work at least 60 hours.
These conditions apply even if the agreements are directly linked without interruption. The amount of leave is then determined in the same way as for a traditional employment relationship.
Tip: Have you started a new job, are you on probation and are not sure when you can take your holiday? Find out when you are entitled to holiday.
The employer must report each employee on a temporary employment contract to the Czech Social Security Administration within 8 calendar days of starting work, even if no contributions have been deducted from the agreement. This notification enables the CSSA to monitor whether the employee exceeds the thresholds for the obligation to pay health and social insurance contributions for several employers at the same time.
The notification is made exclusively electronically and non-compliance may be sanctioned.
Agreements for work outside the employment relationship, i.e. FTE and FTE, can be agreed for a fixed or indefinite period. If the duration of the agreement is agreed (for example, a specific period or a range of up to 300 hours for a FTE), the employment relationship will end at the end of the agreement without the need for a further step.
However, the agreement can be terminated earlier by giving 15 calendar days’ notice for any reason or no reason at all. The period starts from the date of delivery of the written notice to the other party.
If the employee considers that the notice is related to the fact that he/she has exercised his/her statutory rights (e.g. requested a working time schedule), he/she may ask the employer for a written justification. In such a case, the employer must provide it in writing without delay.
Immediate cancellation of the agreement is only possible under the conditions set out in the law – the same as for an employment relationship (Art. 55 of the Labour Code). For example:
Again, a written form is required – otherwise the cancellation is null and void.
Tip: Do you have disputes in the workplace? Is your employee not following work procedures? Has he or she caused you damage and refuses to take responsibility for it? Or does he or she want to sue you wrongfully? We will assess your chances of success and take care of the best course of action.
Of course, it is also possible to terminate the agreement if both parties agree. Such an agreement must not lack the employee’s and employer’s identification details, identification and the date of termination.
The termination notice should always be in writing. It should not lack identification of both parties, identification of the employment relationship and its nature, the duration of the notice period and, where appropriate, the reason for the notice. However, please do not rely on templates available on the internet and contact us. With us, you can be sure that the notice of termination will comply with the Labour Code. We will inform you in advance of the consequences of this and protect your rights as an employer.
Work performance agreements (WPAs) and employment agreements (EAs) are increasingly popular tools for flexible employment. However, from 2024 they are subject to stricter rules, which continue to apply in 2025, clarifying the rights and obligations of both parties. Employers must inform the contractors in writing of their working conditions, provide them with a timetable in a timely manner and keep records of the hours actually worked. Holiday entitlement also arises in the case of agreements if the legal conditions are met. A major new feature is the notification obligation to the Social Security Agency and new limits for insurance contributions from the PPA. Statutory liability insurance for accidents at work also remains an obligation. Agreements can be terminated with 15 days’ notice or immediately for statutory reasons, but always in writing. The correct setting up of employment relationships with contract workers thus requires a more careful approach than before.
Looking for employees? Then you must not miss our article, in which you will find out how much such an employee will cost you.
It’s not easy to hire someone. Employment law can be complex and sometimes a small deviation from it can cause big problems later. We can help you navigate them and set up employment documents in accordance with the law.
Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.
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