Employer action code: Monitor
The Czech Ministry of Labor and Social Affairs (MLSA) has published draft amendments to the Labor Code to transpose the EU Pay Transparency Directive (2023/970). As is typical with transpositions of the pay directive, the draft falls short of the directive’s provisions in certain areas and exceeds them in others. Czechia will not meet the June 7, 2026 transposition deadline. The transparency on hire provisions are expected to take effect on January 1, 2027, and right to information provisions on January 1, 2028, with pay gap reporting obligations phased in between 2028 and 2031. Czechia had an unadjusted gender pay gap of 18.5% as of 2024, the second highest in the EU, compared with the EU average of 11.1% (Eurostat data).
Key details
- Pay transparency during recruitment: Employers would be required to provide candidates with the minimum salary level for the role along with information of other pay and benefit elements before negotiating employment contracts. Although required by the directive, the draft legislation doesn’t expressly require employers to disclose the initial pay level or range. Employers would be prohibited from inquiring about a candidate's current or previous remuneration
- Employee right to information: Employees who have worked during the previous calendar year would have the right to request written information on the gross and hourly amount of their individual pay and benefits for the prior calendar year, and the average amounts for workers in the same category of worker, broken down by gender. (Note: The MLSA will provide further guidance on calculation methodology.) Employers would be required to respond within two months of the initial request and would have a further two months to provide additional explanation or information where requested. If individual data privacy concerns arise, the employer can alternatively provide the information to the Public Defender of Rights (not an employee representative) to evaluate and inform an employee if they have a case
- Category of worker pay gap report: Reporting of gender pay gaps by category of worker would be implemented in phases: Companies with 250 or more employees would report annually from 2028, with first reports due by April 30 concerning the 2027 pay data; employers with 150 to 249 employees would report every three years from 2028, expanding to employers with 100 to 149 employees from 2031. Employers must consult with the relevant trade union on the report before making it available to employees and representatives and submitting it to the MLSA portal. (Note: The MLSA will provide further guidance on calculation methodology and filing.) Where a gap of 5% or more cannot be justified on objective grounds or eliminated within six months, the employer would need to conduct a joint pay assessment with the works council or labor union, if any (otherwise, the employer must notify employees and wait 30 days for representation to form before proceeding unilaterally). The draft would further require that the assessment be completed within two months of the end of the six-month period for remedial actions, unlike the directive, which does not stipulate a deadline for completing pay assessments.
- Entity pay gap report: Reporting obligations for entity-level gaps would apply in the same phases as for category of workers, except the MLSA will prepare the report based on information provided by the employer to the MLSA through Monthly Wage Reports. The Ministry will publish the pay gap report by March 31, with first reports to be published by March 31, 2028, in respect of 2027 pay data.
- Agency workers: The draft provides that the employer’s approach to remuneration should apply to an agency worker when working for the employer (not the agency’s approach). In addition, from 2031, an employer that uses agency workers would need to include them in calculating category of worker gaps, but for the purposes of entity-level pay gaps, the Ministry would include them in the agency’s pay gap numbers. Certain provisions cover the need for the employer and agency to provide pay data to the other as needed for reporting
- Pay structures and job classification: All employers, regardless of size or sector, would be required to establish and document a formal remuneration system that sets out the manner in which employees are remunerated, including classifying the value of the work into groups based on job complexity, responsibility and physical exertion for the purpose of determining base pay (it’s worth noting the criteria reflect the criteria used in Czechia and are different from those required by the directive). Employers would additionally be required to establish a separate documented benefits system with objective, non-discriminatory criteria for providing any other reward elements in cash or in kind to staff
- Pay secrecy: The existing ban on pay confidentiality clauses — introduced under the 2025 flexi-amendment to the Labor Code — would be extended to cover total remuneration in broad terms, encompassing all forms of monetary and in-kind remuneration. Employees would have the right to share information about the full scope of their remuneration at their own discretion
The draft would also shift the burden of proof in pay discrimination disputes to the employer, who would be required to demonstrate that no violation of pay equality rules has occurred.
Employer implications
Employers should monitor the legislative process closely and consider the necessary measures to be taken should the draft legislation be approved in its current form. As the draft amendments expand on the directive’s requirements in some areas but are less prescriptive than the directive in other areas, further refinements to the amendments can be expected.
Contacts
