The Ministry of Labour and Social Affairs has presented a draft transposition bill aimed at implementing Directive (EU) 2023/970 of the European Parliament and of the Council on pay transparency into Czech law.

The Directive aims to gradually reduce the gender pay gap. It is based on a clear principle: for the same work or work of equal value, all employees of an employer are entitled to the same pay as agreed.

The Act, which amends the Labour Code and other regulations, is proposed to come into force on 1 January 2027 (with the entry into force of certain provisions deferred).

Information prior to the commencement of employment

Employers will now be required to provide job applicants with verifiable information on the minimum wage or salary, as well as on other monetary and non-monetary benefits due from the start of the employment relationship. The obligation to disclose the minimum wage must be fulfilled no later than before negotiations on the conclusion of an employment contract commence. Employers will also no longer be permitted to request details of a job applicant’s pay history from previous employers.

Mandatory remuneration system in the form of internal regulations / a collective agreement

All employers will now be required to establish a written remuneration system through an internal regulation or collective agreement. The system must specify the form, components and method of grading the amount of remuneration, as well as the division of work into groups graded according to the value of the work, based on its complexity, responsibility and physical exertion. This also applies to agency workers: during their temporary assignment to work for a user, agency workers are subject to the user’s remuneration system.

If the employer also provides other monetary payments and benefits of monetary value (bonuses, benefits, etc.), they must also establish a separate system for the provision of such other monetary payments and benefits of monetary value. This system must contain objective and non-discriminatory criteria on the basis of which these benefits are provided. The employer must also adopt this system by means of an internal regulation or agree it in a collective agreement.

In view of the planned entry into force of the Act on 1 January 2027, we recommend that employers begin work on preparing remuneration systems as soon as possible and, first and foremost, focus on providing a detailed description of individual job roles and their assignment to the corresponding groups.

Reports on pay differences and the consequences of a gender pay gap ≥ 5%

The Ministry of Labour and Social Affairs will, on the basis of data reported as part of the unified monthly report, prepare reports on pay differences for employers with more than 100 employees.

These employers will also be required to prepare a more detailed report on pay differences within job groups. If the report on differences within job groups shows a gender pay gap of ≥ 5% for any job group and the employer has neither justified nor rectified this within 6 months, they must carry out a pay review within 2 months. The employer shall discuss the assessment with the trade unions/works council and publish it – to employees and the Ministry of Labour and Social Affairs; upon request, it shall also be submitted to the Labour Inspectorate or the Ombudsman.

The obligation to prepare reports on pay gaps will apply to employers depending on the number of employees. Employers with 150 or more employees will prepare their first reports on pay gaps in 2028 (i.e. they will report on differences for the 2027 calendar year). Employers with 100–149 employees will report for the first time in 2031 (for the year 2030).

Employees’ rights to information

Upon a written request from an employee, the employer must, within two months, provide information on the average pay within the job category (by gender) to which the employee is assigned. The employer must inform employees of this right at least once a year.

Penalties

Failure to comply with obligations, such as failing to establish a pay system, failing to prepare a report on pay gaps, failing to carry out a pay assessment, asking a job applicant about their pay history, or other breaches of obligations regarding pay transparency, may result in fines of up to CZK 1,000,000 per instance.

Shift of the burden of proof

The amendment also introduces procedural provisions in Section 133a of the Code of Civil Procedure, which strengthen the position of employees in proceedings concerning equal pay. If an employer fails to fulfil any of the specified obligations arising from the new provisions on pay transparency, the burden of proof shifts to them. The employer will therefore have to prove that no pay discrimination has taken place. The law provides for an exception: if the employer can demonstrate that this failure to fulfil obligations was clearly unintentional or of minor significance, then the shift of the burden of proof will not apply.

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This material is for general information on current topics only, it is not advice. It does not take into account any special circumstances, financial situations or special requirements of the addressees. Recipients should therefore always seek appropriate professional services for the information provided. Notwithstanding the careful compilation of this material, bpv Braun Partners s.r.o. advokáti, its partners, associates or co-operating solicitors and tax advisers cannot guarantee the accuracy or completeness of the information contained herein and accepts no responsibility for acting or refraining from acting on the basis of the information contained in this material.