Pay Transparency in the Czech Republic: New Employers’ Obligations towards Employees and Applicants for Employment (Part 2)

This is the second instalment in our three-part series focusing on the EU Pay Transparency Directive (the “Directive”) and its implementation in the Czech Republic. Part 1 introduced the Directive’s key requirements and the proposed Czech transposition. This Part 2 addresses the amendments to the Labour Code, focusing on employers’ new obligations towards employees and job applicants. The core provisions of the proposed amendment are expected to take effect on 1 January 2027, with certain obligations following on 1 January 2028. 

Read on for an overview of the key changes and how to prepare for them.

Pre-Employment Transparency: Obligations towards Job Applicants

Employers will be obliged to demonstrably provide job applicants with information on the minimum wage or salary for the position, including other monetary benefits and benefits of monetary value. This obligation must be fulfilled prior to the commencement of negotiations on the conclusion of an employment contract. This means that information may be provided, for example, in a published job vacancy notice or in a job interview invitation. Where the recruitment process is conducted otherwise than through a job vacancy notice (e.g. through headhunting), the employer must provide this information no later than at first contact with the applicant. The employment contract offer may not include lower remuneration than that communicated to the applicant – the only exception being where the employer decides to offer the applicant a different position than the one originally applied for.

Practical tip: Keep a record that the applicant received the information on the minimum wage (e.g. email read confirmation or a signed document).

Employers will also be expressly prohibited from asking applicants about their pay history. This applies not only to employment relationships but also to agreements on work performed outside employment (i.e. agreements to perform work and agreements to complete a job).

The Directive also requires gender-neutral job vacancy notices and job titles, as well as non-discriminatory recruitment processes. These requirements are already enforceable under the general provisions of the Employment Act, so the draft amendment does not address them separately.

Remuneration Systems – A New Obligation for All Employers

One of the most significant changes is the introduction of an obligation for every employer to establish a remuneration system in the form of an internal regulation or collective agreement. This system must classify work into categories graded by the value of work, based on the statutory criteria of complexity, responsibility and strenuousness, and must also describe the method of remuneration, particularly the form of pay, its components and the grading of pay levels. Different weight may be assigned to individual criteria when determining the value of work, depending on the nature of the work performed. The Ministry of Labour and Social Affairs will provide employers with a voluntary tool for determining the value of work. Employers that already have a functioning system meeting these requirements will not need to amend it.

Practical tip: For the classification of work into categories in the employer’s remuneration system, the relevant criterion is the evaluation of the “type of work”, not the work actually performed by a specific employee. The base salary should therefore be the same or very similar within a given work category. Any differences in remuneration within the same category may be legitimately justified by employers through differences in employee performance and work results achieved, using variable pay components (bonuses, premiums).

Where employers provide other monetary considerations and considerations of monetary value beyond salary, wage or remuneration from agreement, they must establish a similar system for these components. This system must be based on objective and non-discriminatory criteria. It does not need to cover benefits, the amount of which is directly stipulated by law and from which the employer has not deviated. 

The remuneration system must be discussed with the trade union and the works council must be informed about it, if such bodies operate at the employer. This obligation stems from already existing provisions of the Labour Code and ensures that employee representatives have the opportunity to comment on the system design.

Transparency during Employment: Employees’ Right to Information

Upon a written request by an employee, employers will be obliged to provide, within two months, written information on the employee’s individual pay level (including monetary benefits and benefits of monetary value). Employees will also be entitled to request and receive written information on the average pay levels for their work category in the previous calendar year, broken down by sex. A work category means a category of employees performing the same work or work of equal value according to the employer’s remuneration system. If the information provided is inaccurate or incomplete, employees have the right to request clarifications or additional details. Requests may be submitted personally or through a trade union, works council, or the Ombudsman.

Practical tip: Prepare a response template for employee requests and an internal process for handling them. Since the reference period is the previous calendar year, the response to repeated requests from the same employee within one calendar year will always be the same – you may inform employees of this in advance to avoid unnecessary administrative burden. Together with providing the information, you may also inform the employee in writing of restrictions on the handling of the data provided (except for information on their own pay) solely for the purposes of protecting the right to equal treatment.

If providing the requested information would reveal an identifiable individual’s pay, the employer must not disclose it to the requesting employee. Instead, the information will be provided to the Ombudsman, who will advise the employee on appropriate steps to protect their rights, if necessary.

Employers will be required to inform all employees at least once a year about their right to request information.

Practical tip: To fulfil this information obligation, you may use, for example, a mass email notification or publication on the company intranet.

Prohibition of Pay Secrecy Clauses

Since 1 June 2025, employers have been prohibited from restricting employees from disclosing information about their wage, salary or remuneration under work agreements. The new draft extends this prohibition to the entire concept of “pay” under the Directive, covering all monetary benefits and benefits of monetary value. In other words, employers may not restrict employees from sharing information about any component of their pay – whether it is base salary, bonuses, meal allowances, transport allowances or other benefits.

Practical tip: Review existing employment contracts and internal regulations and remove any confidentiality clauses relating to remuneration and other monetary considerations and considerations of monetary value.

Penalties

Employers may face fines from the labour inspectorate for breaching the new obligations. The most serious infringements, such as failing to establish a remuneration system or asking applicants about their pay history, may result in fines of up to CZK 1,000,000. Less serious breaches of pay transparency obligations (e.g. failure to provide information to employees, failure to publish required data, breach of information obligations towards trade unions) may attract fines of up to CZK 400,000, depending on the nature of the infringement.

Part 3 of this series will focus on employers’ obligations to monitor and report gender pay gaps and to conduct pay assessments.

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 to prepare for compliance ahead of the transposition deadline.