Pay Transparency in the Czech Republic: An Introduction to the EU Directive and Proposed National Implementation (Part 1)
This is the first instalment in a three-part series examining the EU Pay Transparency Directive (the “Directive”) and its implementation in the Czech Republic. Part 1 introduces the Directive’s key requirements and the proposed Czech transposition. Part 2 will address the amendments to the Labour Code, focusing on employers’ obligations towards employees and candidates, while Part 3 will examine the changes to the Labour Inspection Act and other legislation, covering employers’ obligations towards the authorities.
Adopted on 10 May 2023, the Directive aims to address the persistent gender pay gap. Previous non-binding instruments, including the European Commission’s 2014 Recommendation, have proved insufficient. Enforcement of the equal pay principle was hampered by opaque remuneration systems, an unclear definition of work of equal value, and procedural barriers faced by victims of discrimination.
The Directive introduces binding rules that establish minimum standards applicable to all Member States and must be transposed into national law by 7 June 2026. The Czech Republic is, however, not on track to meet the transposition deadline. While the Ministry of Labour and Social Affairs has prepared a draft amendment to the Labour Code and related legislation, the first changes are not expected to take effect until 1 January 2027, approximately six months after the transposition deadline.
Key Requirements of the Directive
The cornerstone of the Directive is the obligation for employers to establish remuneration systems based on objective and gender-neutral criteria that enable a comparison of the value of different positions. During the recruitment stage, employers must inform candidates of the offered salary or salary range before the commencement of negotiations on the employment contract. Inquiring about a candidate’s remuneration history is expressly prohibited. Employees will have the right to request information in writing about their own remuneration and the average remuneration levels of colleagues in the same category, broken down by gender. The Directive also prohibits “pay secrecy clauses”, which were previously used to restrict employees from disclosing their remuneration.
Employers over the prescribed thresholds will be required to regularly report gender pay gaps to the monitoring body: entities with 250 or more employees on an annual basis and smaller employers with at least 100 employees once every three years. If an unjustified pay gap in any category of employee reaches 5% and is not remedied within six months, the employer will be obliged to carry out a joint pay assessment in cooperation with employee representatives and propose remedial measures. In pay discrimination disputes, the burden of proof is shifted to the employer – it is therefore the employer that must demonstrate that no discrimination has occurred.
Czech Implementation: Approach and Timeline
The Ministry of Labour and Social Affairs has proposed a minimalist and pragmatic approach to transposition to minimise the impact on employers. The draft is designed as an amendment to several existing laws, primarily the Labour Code, the Anti-Discrimination Act, and the Labour Inspection Act. While the new obligations may initially impose an additional burden on employers, the need for implementation is evident as the enforceability of the equal pay principle has proved difficult in practice because employees often lack access to the information needed to identify and prove discrimination. According to a survey conducted by the Ministry of Labour and Social Affairs in 2025, only 15% of Czech companies currently monitor pay differences across comparable positions.
One of the Directive’s requirements has already been partially implemented domestically through the “flexible” amendment to the Labour Code, which, as of 1 June 2025, prohibits pay secrecy clauses concerning the amount of wages, salary, or remuneration under agreements to perform work outside the employment relationship.
Among other things, the new legislation introduces an obligation for employers to establish a remuneration system based on an objective classification of jobs into groups according to complexity, responsibility, and difficulty, either through internal regulations or a collective agreement. Based on these systems, employers will then be required to prepare pay gap reports within work categories.
The core provisions of the amendment are expected to take effect from 1 January 2027. Obligations related to pay gap reporting will apply from 2028 for employers with 150 or more employees, while smaller employers with 100 to 149 employees will begin reporting in 2031.
The Ministry of Labour and Social Affairs will serve as the monitoring body and will prepare gender pay gap reports on behalf of employers at the same frequency as employers report pay differences within work categories. The Ministry will also publish pay gap data derived from the processed reports through a newly established information system enabling comparisons across employers, industries, and regions.
The role of the equality body will be entrusted to the Public Defender of Rights (Ombudsman), who will be able to assist employees in enforcing their rights and represent them in court proceedings.
For the most serious breaches of these obligations, such as a failure to produce a pay gap report or failure to establish a remuneration system, employers may be subject to administrative fines of up to CZK 1,000,000.
More detailed information on the individual obligations will be provided in the next part of this series.
Contact CMS if you want to be prepared for the changes
As these requirements will impact your daily employment practice, we encourage you to consult our employment law experts toprepare for compliance ahead of the transposition deadline.
