In late June 2020, some long-awaited changes to the Labour Code were approved by the Czech Parliament, marking the first changes since 2012.

The amendment’s primary changes introduced a new system for calculating annual leave on January 1st, 2021. The new system requires changes to employers’ HR systems, so if have employees in the Czech Republic and haven’t made these changes already, you will need to.

With the new system, annual leave will be calculated in hours and will be based on the agreed weekly working hours. All employees with the same weekly hours (for example, 40) will have the same holiday entitlement (in this case 160 hours, if the employer provides employees with four weeks of holiday, or 200 hours in the case of five weeks).

A big change from the current law, where holiday leave is calculated in days (20 or 25 days per year); and the specific extent in hours depends on the employee’s actual schedule of working time. This means that the current law can, in specific situations, result in small, unfair discrepancies and leave question marks. This is of particular concern when workers shift from full-time to part-time work (or vice versa) over a year.

The new system aims to make rules more transparent for part-time workers, employees with complicated schedules, and employees with changing work patterns. For white-collar employees, the new rule will not have much impact.

A holiday will accrue on a weekly basis consisting of 7 consecutive days, so after every workweek, an employee will receive 1/52 of the total annual entitlement hours. Holiday accruals will only be available if they have worked 4 full weeks, meaning the minimum holiday entitlement an employee who has worked this period will receive is 13 hours holiday. Again, this will be a change from the existing system where employees accrue 1/12 of their entitlement each fully worked calendar month.

It is important to note that the amount of annual leave entitlement in weeks remains unchanged. In 2021, the minimum entitlement for private companies remains at 4 weeks. However, the formula changes to 160 hours of a holiday if an employee works the full calendar year: the basic formula is 40 (weekly working time) x 4 (weeks of holiday). In the case of a part-time job, the hourly entitlement will depend on the number of agreed weekly hours – for example, 80 hours of holiday for an employee working 20 hours per week.

This may change soon though, another amendment to the Labour Code is currently under discussion in the Parliament; it proposes to increase the minimum annual leave for all private-sector employees to five weeks. If this amendment passes, all full-time white-collar employees will be entitled to at least 200 hours of a holiday if they work the full calendar year.

If part of your business is in the Czech Republic and using e-days, feel free to contact our customer success team at customersuccess@e-days.com to discuss implementing these changes within your platform.

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