Czech Companies Will Be Required to Ensure Equal Pay

New legislation aims to address the wage gap between men and women. The changes — and the compliance checks that follow — will apply to both large and small companies.

The new rules stem not only from Czech law but also from the EU Pay Transparency Directive, which seeks to reduce gender-based pay disparities. Employers will face several new obligations, including publishing starting salaries, providing gender-specific pay data, and conducting regular pay audits.

Salary Confidentiality No Longer Enforceable

Employers have often required employees to keep their pay confidential — whether wages, salary, or remuneration based on an agreement. These confidentiality clauses were typically included in employment contracts, collective agreements, or internal policies. Employees who broke this obligation risked receiving at least a formal warning and, in some cases, even termination.

However, according to recent rulings by both Czech courts and the European Court of Justice, such confidentiality clauses are no longer enforceable. What’s more, starting June 1, 2025, an amendment to the Labor Code will explicitly prohibit employers from preventing employees from sharing information about the amount or structure of their pay. If an employer violates this rule — for example, by restricting access to pay information — the labor inspectorate can impose a fine of up to CZK 400,000.

New EU Directive on Pay Transparency

But this isn’t the only change affecting remuneration rules. A major development aimed at preventing gender-based pay discrimination is the EU Pay Transparency Directive, adopted in April 2023. Its goal is to ensure that women are not paid less than men for the same or equivalent work. Under this directive, EU member states must uphold the fundamental right to equal pay and implement standardized rules on pay transparency across the Union.

Each member state has two years to incorporate the directive into its national legislation — and the Czech Republic is no exception. In line with the national Action Plan for Equal Pay for Women and Men, these changes will be introduced gradually between 2023 and 2026.

Action Plan 2023–2026

The Czech government’s Action Plan for 2023–2026 offers a comprehensive and strategic approach to reducing the gender pay gap, with a particular focus on pay transparency. It is the first national policy document aimed specifically at eliminating wage inequality between men and women. According to the plan, the average pay gap for men and women doing the same job at the same workplace is around 10%.

Such pay disparities have serious social and economic consequences. They strain household budgets, contribute to a lower standard of living for families with multiple children, worsen the financial situation of single mothers and their children, and lead to lower pensions for women. They can even increase the risk of partner violence and result in lower revenues from taxes and insurance contributions.

The Action Plan for Equal Pay for Women and Men 2023–2026 is built on six pillars:

• Transparency of remuneration systems
• Monitoring of equal pay
• Pay in public administration
• Work-life balance
• Education
• Data availability

The concepts of “equal work” and “work of equal value” are based on §110 of the Czech Labor Code, which guarantees equal pay for all employees doing the same or equivalent work. The plan also introduces new terminology such as “remuneration difference between women and men” and “gender pay gap” (GPG).

The gender pay gap (GPG) is a statistical measure showing the difference in average gross hourly earnings between men and women, expressed as a percentage of male earnings:

GPG = 100% × (men’s gross earnings – women’s gross earnings) / men’s gross earnings

The Action Plan notes that the GPG is also linked to employment rates. In countries where fewer women are employed (below 60%, such as Malta, Italy, Romania, or Spain), pay differences tend to be smaller. In contrast, the Czech Republic has a female employment rate above the EU average – along with a higher-than-average GPG. More detailed analysis is available in the full version of the Action Plan for Equal Pay for Women and Men 2023–2026.

New Obligations for Employers in the Czech Republic

The upcoming changes will directly impact pay practices. Under the updated §287 of the Labor Code, employers are already required to inform trade unions about average wages and salaries. Now, they will also need to disclose gender-specific pay data — specifically, the remuneration levels for men and women.

In addition, every employer will be required to maintain an internal wage policy or regulation that confirms compliance with the principle of equal pay. This document must be available for review in the event of a labor inspection.

Powers of Labor Inspectors

Employers will be required to disclose the starting salary or salary range to job applicants in advance, either in job advertisements or during the hiring process. In addition, they will be obliged to provide employees with information on remuneration, broken down by gender, including the average salary in their job category or for a group of jobs involving the same or equivalent work.

Companies and organizations with at least 250 employees will be required to conduct regular pay audits. These audits must include an analysis of the proportion of women and men in specific job categories, an evaluation of the job classification system used, and detailed information on pay and any differences in remuneration based on gender. The audit reports must be made available to employee representatives and social partners. From June 2027, these organizations will also be subject to an annual reporting obligation.

Employers with 151 to 249 employees will be required to carry out pay audits every three years. For companies with 100 to 149 employees, the new obligations will apply starting in 2031.

If an unjustified pay gap of more than 5% between men and women is identified, the employer must take corrective action within six months. Employees who have experienced gender-based pay discrimination will be entitled to financial compensation. A significant change is that the burden of proof will now lie with the employer, who must demonstrate that no discrimination occurred.

Need help preparing for the new requirements? Contact 360WEDO for expert guidance on compliance and equal pay practices.

Source:

https://www.podnikatel.cz/clanky/nejde-jen-o-mlcenlivost-firmy-a-nove-povinnosti-kvuli-rovnosti-odmenovani