Imagine that you want to earn some extra money during the summer for a holiday. A friend’s café is looking for help, but says “we won’t do the paperwork, it’s not worth it”. At first glance it’s tempting – no medical exams, no paperwork, money right on hand. But working without a contract is illegal in the eyes of the law. And it’s not just you who is at risk: the penalties apply to the employer too.
When an advert like “quick part-time job without a contract, cash in hand” appears on social media, many people think it’s a harmless job. However, in legal parlance, we are talking about illegal work, i.e. work performed outside the scope of the Labour Code (outside the basic employment relationship). In layman’s terms, you are doing what a traditional employee would otherwise do, but without any contract or agreement.
This problem has three levels. First, the state loses out on contributions and insurance. Secondly, you lose protection: you are not entitled to holiday, sick pay or accident compensation. Thirdly, under the Employment Act, you face fines of up to CZK 100,000 for the employee and up to CZK 10 million for the employer. But it’s not just the state that’s after the money. If you work “by hand”, you have no proof in your hand that you worked at all, so this work does not count towards your pension.
Do you have a part-time job without a contract or does your employer promise you “paperwork later”? Don’t risk fines, unpaid wages or pension problems. Our legal advice service will help you to find out if you are working illegally and advise you on how to get the right employment relationship. Quickly, discreetly and clearly.
At the heart of it all is the question of when an activity is dependent work and when it is a self-employment. The Labour Code says that dependent work is work performed personally, under the authority of the employer, under the employer’s instructions, during fixed working hours and for remuneration. It may also be performed exclusively in the basic employment relationship – that is, the employment relationship or an agreement for work performed outside the employment relationship(FTE or FTE).
Imagine a barista in a café. The owner assigns him a shift, supplies the ingredients, tells him what to serve and how to serve it. Even if the barista issues invoices, he or she is effectively working as a dependent and, if the owner has not signed anything with him or her, it is work without a contract. In contrast, a graphic designer who sets his own hours and is responsible for the outcome is more likely to meet the criteria of an entrepreneur.
If you’re not sure whether you’re working under the table, ask yourself these four questions:
The more “yes” answers, the more likely it is dependent work – and without a written contract, you are in illegal work mode.
As an employee, you can be fined up to CZK 100,000 if the Labour Inspectorate finds out. If the employee tries to avoid this fine and, for example, tries to conceal their identity, they can be fined up to CZK 200,000 for this alone.
However, the employer may be worse off. Although the Constitutional Court has already abolished the lower minimum limit of CZK 250,000, the upper limit still remains at CZK 10 million.
The most common problem may be employer dishonesty. You will work without any contract, you will get the money in hand, but it may happen that the person who provides you with work without a contract will increasingly postpone payment until it is clear that you will never be paid. In that case, you then have no way of recovering your money. The employer is relying on the employee to prove nothing, and will also fear a fine from the labour inspectorate. It pays to have a signed employment contract.
The Labour Code sets out three basic elements of an employment contract: the type of work, the place of work and the starting date. Most importantly, it must be in writing. Missing a signature on the contract? Then the law says that such a contract is disregarded. In other words, the document does not exist.
Why does it matter? If something goes wrong (for example, an accident in the workplace), the labour inspectorate demands just the contract from you on the first day of the inspection. Don’t you have one? Quite possibly the whole relationship will be re-classified as a “part-time job”. The employer will probably have to pay a fine and you lose your right to sickness benefits and often pay the damages yourself.
Tip: Read what your employment contract should contain. These elements of an employment contract are an essential part of a valid document that will help you get a mortgage, for example.
If you do not have a proper employment contract, you must pay for your own health insurance. No one is forcing you or your employer to contribute to your pension or sick pay. This won’t show up immediately, but it can be very painful if there is any problem.
Although it doesn’t seem like it at first, working under the table can come back to bite you when you want a mortgage, consumer credit or lease. Banks and other financial institutions judge your creditworthiness based on documented income – typically pay stubs, tax returns or employer statements. But if you work without a contract, you don’t officially “exist” and no one can confirm your income. This can make you an unreliable client in the eyes of the bank, who cannot prove what they will use to repay.
There are clear rules in the Labour Code for short-term work. In order not to be a part-time job, it will be best for you to sign a temporary contract or a temporary employment contract. A contract of employment (CBA) is suitable when the scope of work does not exceed 300 hours per year with the same employer. On the other hand, a contract for work (FTE) allows you to work longer hours, but on average no more than half of your weekly working hours.
Both agreements must be in writing and the employer must give you, as an employee, a copy of them. Although they are more flexible, most of the standard rules apply: minimum wage, rest breaks or safety at work.
“Can you help us at the weekend? You’ll get the money now, we’ll sort out the contract later.” This is probably the most common form of working without a contract. On Sunday night, the money lands in your hand, but there is no document that you have worked. When the check comes two weeks later, the employer says you were just visiting.
“Once you’re a nephew, you’ll help us out with something. And we won’t deal with the invoices.” The law doesn’t excuse a familial relationship either. If you’re following instructions and getting paid, it’s again a non-contract job.
“You can work for us as a freelancer, but you have to keep your shifts.” The hairdresser has an I.D., but she must be in the salon from eight to six or she will be fined. At first glance, this looks like cooperation with a self-employed person, but in reality, it is subordination and staggered working hours, i.e. dependent or illegal work(shvarcsystem).
How to defend yourself? Always ask for a written contract, check that the agreement corresponds to the actual scope of work, and keep your communications (emails, attendance records, pay slips). This evidence will later decide who the inspectors will give the benefit of the doubt.
Undeclared work is illegal and carries serious risks for both the employee and the employer – from a fine of up to CZK 100,000 for the worker to CZK 10 million for the company. Without a written contract, you are not entitled to sick pay, pension or accident compensation, and there is virtually no way to recover wages owed. The law clearly defines what constitutes dependent work, and if you work personally, under instructions and for regular remuneration, it is employment that must be supported by a contract of employment, a fixed-term or permanent contract. Neither a family relationship nor working on an I.T.O. will protect you from the law if you meet the characteristics of a dependent activity. The best protection is to always have a proper written contract, keep evidence of communication, and refuse to work “on good word”.
If you do the work personally, on your employer’s instructions, at set hours and regularly for pay, and you have no contract, it is probably illegal employment, even if you are told otherwise.
Yes. Ignorance of the law is no excuse. Even an employee who “just helps a friend without a contract” can be fined up to CZK 100,000. If you also make it difficult to check (e.g. by concealing your identity), the penalty can be up to twice as much.
Such a promise is a very common trick. Without a written contract, you have no guarantee that you have ever worked, nor are you entitled to a paycheck. The job should be contracted from day one, otherwise don’t take it on at all.
In most cases, no. Unless you have written proof of employment, your chances of getting paid are very slim. The employer will simply deny that you ever worked, and you have nothing to argue.
Not always. If your employer sets your hours, controls you and gives you instructions, this is dependent work – even if you are self-employed. This is also illegal and can be sanctioned.
Our team of experienced attorneys will help you solve any legal issue. Within 24 hours we’ll evaluate your situation and suggest a step-by-step solution, including all costs. The price for this proposal is only CZK 690, and this is refunded to you when you order service from us.
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.
In person and online. Just choose the appropriate service or opt for an independent consultation when you are unsure.
