The number of employers, employees and the self-employed have all increased in the Czech Republic during the four years of the current election term, according to data from the Czech Social Administration, the Statistical Office and the Labour Office.
Employment in the Czech Republic has risen slightly, and unemployment remains among the lowest in the EU. The number of foreign workers in the country has been rising.
The current coalition government of Petr Fiala has pushed through its “flexible” amendment to the labour code, anti-bureaucratic packages, unified monthly reporting by employers, minimum wage indexation, and the abolition of guaranteed wages, as well as the reduction of employers’ mandatory social and health insurance payments for part-time workers and the pension insurance exemption for working pensioners.
It is not clear what the government or opposition parties would do in this sphere after the October general election, as most of them have not published their programme.
At the end of the first half of this year, the Czech Social Security Administration (CSSZ) registered 357,200 employers, nearly 4.95 million employees and more than 1.15 million self-employed people. Around 782,000 sole traders were obliged to pay pension insurance contributions.
At the end of the second quarter of 2021, before the previous election, there were 279,900 employers, 4.55 million employees and 1.07 million self-employed.
The Social Administration has also been keeping records of those with a contract for work since last July, numbering over 1 million. These workers are counted as employees.
522,800 of these contract workers have not paid social insurance contributions so far this year, due to earning less than the allowed limit. In the second half of last year, these workers earned over CZK 40.7 billion, with social insurance contributions paid on less than 7% of this total (CZK 2.7 billion).
Some experts criticise this practice. According to them, work contracts or “agreements to complete a job” are replacing part-time jobs for which such social insurance contributions must be paid.
The Czech Republic remains below the EU average in the range and availability of part-time work. The government has pushed for a reduction in social and health insurance payments for part-time employed parents of young children and people before retirement. Last year, around 21,900 employers took advantage of this discount, which totalled CZK 1.17 billion for 82,100 workers.
The government pension reform waives pension contributions for working pensioners as from this year. According to the Labour and Social Affairs Ministry, 30,000 to 40,000 self-employed people who continue to work in retirement could also apply for this relief next year.
The Labour Office points out that the number of people in retraining is gradually increasing, with 30,665 in the first six months of this year, a 52% increase year-on-year. The National Recovery Plan also contributes to digital training for interested individuals and companies.
At the end of the first half of the year, 877,500 foreigners were employed in the country, 320,500 of whom were from Ukraine. In June 2021, the Labour Office registered 681,600 foreign employees, 191,600 of whom were from Ukraine.
Despite the influx of refugees and foreign workers, unemployment has not risen in the Czech Republic. Last year, it was 2.6%, down from 2.8% in 2021.
Employers continue to demand a simplification of the process of attracting workers from abroad, and some barriers are being removed.
The employment rate reached 59% last year, compared to 58.1% in 2021.
Under the government consolidation package, the base for the calculation of health and social insurance payments for sole traders is gradually rising, while employees must pay sickness insurance again. According to some experts, the burden on the self-employed is significantly lower than that of employees and should be adjusted.
The government’s amendment to the Labour Code, which regulates probation and notice periods and divides working time into shifts, is designed to increase flexibility on the labour market. A rise in the unemployment benefit from next year should make it easier for those changing jobs. Other changes include the abolition of guaranteed wages (the lowest earnings according to expertise, difficulty and responsibility of the job, paid in eight levels from the minimum wage to its double) and the indexation of the minimum wage. The single electronic monthly report for employers will replace 25 separate forms. Other steps to reduce red tape include the cancellation of mandatory medical check-ups for employees, and the possibility of keeping accounts in foreign currency.
According to the Czech Statistical Office, the average wage in the Czech Republic reached CZK 46,924 in the first quarter of this year, up from CZK 34,761 four years ago. However, due to high inflation, real earnings have fallen in recent years.
