01 Employers of Record under Czech law
Czech law does not recognize the legal concept of an employer of record (EoR), or of a professional employer organization. Rather, Czech law does recognize the temporary assignment of employees by employment agencies (in Czech: agentura práce) as the legal employer of those employees to be reassigned to another company (end-users). In order to provide services every employment agency is required to have a temporary agency license.
02 Employment agencies: Professional employment intermediation under Czech law
Employment intermediation is typically characterized by the following relationships:
- Employment agencies and client companies. The basic relationship between employment agencies and those end-users asking for a given employment agency to lease its employees to perform work for the end-user is governed by an agreement on the temporary assignment of agency employees, the minimum requirements of which are defined by the Czech Labor Code. The employment agency typically charges a premium (remuneration) for the employment intermediation.
- Employment agencies and employees. The relationship between employment agencies and to-be-assigned employees is governed by standard employment contracts. During the period of temporary assignment, the client company organizes, directs and controls the given employee's work, issues them working instructions, creates favorable working conditions and ensures safety and health protections at the workplace. However, such employees remain legally employed by the respective employment agency, which is responsible for providing remuneration. The client company also may not legally act on behalf of the employment agency towards the employee (e.g. it cannot serve employees a notice of termination).
- Client companies and employees. No direct contractual relationships exist between client companies and employees.
Employment agencies are responsible for:
- Ensuring employment is compliant with local (Czech) employment laws
- Processing local payrolls
- Filing employment-related taxes, withholdings and returns
- Issuing payslips to employees
- Distributing salary payments and benefits to employees
End-users are responsible for:
- Organizing and controlling employee work
- Creating favorable working conditions and ensuring safety and health protections at the workplace
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.