Employers in the Czech Republic are required to issue new income certificates as of July 1, 2023
26.05.2023
26.05.2023
From July 2023, job centers in the Czech Republic can ask employers for monthly proof of income of their employees. It also has a relatively short deadline for sending it.
An amendment to Law No. 66/2022 Coll. on employment and social protection measures in connection with the armed conflict on Ukrainian territory caused by the Russian Federation’s invasion of soldiers established new requirements for employers. In mid-2023, additional responsibilities will be introduced.
Employers’ reporting obligations
Starting April 1, 2023, employers must report their employees—persons who have been granted temporary protection—to the Czech Social Security Administration in accordance with the amended Article 87 of the Employment Act. In particular, it is necessary to report the entry of such employees to work or working under a DPČ (dohody o pracovní činnosti) employment contract.
The same applies to employees working on the basis of a DPP work contract (dohoda o provedení práce). From April 1, 2023, the employer must report them to the register of workers with temporary protection, which will be maintained by the ČSSZ for the purposes of the Employment Office.
Employers had previously only notified the ČSSZ the arrival of employees whose job allowed them to establish their participation in health insurance (nemocenské pojištění). They now report in the same way the employment of workers with temporary protection who do not qualify for health insurance.
The period is 8 calendar days beginning with the employee’s first day of work. The employer must disclose any modifications and, of course, the end of the work relationship within the same time frame.
Employers must report to the register by April 30, 2023, all employees whose employment relationship began before the effective date of the amendment and who have not yet been registered for insurance (and this employment relationship did not end before April 30, 2023), according to the transitional provisions.
Employee and employer registry
ČSSZ ‘s Registry of Insured Persons and Registry of Employers have been updated to include information on employees who receive temporary protection. It also records employees who are in a working relationship but are not covered by sickness insurance.
The registration requirement also affected companies who were not required to register with the ČSSZ at all because they solely hired workers who did not join in the health insurance program. Since April 1, they have become employers employing citizens with temporary protection without participating in sickness insurance for the purposes of the Czech Social Security Administration.
Benefit Information
The State Labor Inspectorate, regional labor inspectorates, and the Employment Office can apply to the register. They receive the following data in a way that allows remote access for the purposes of their activities:
a) the entry and exit of an employee with temporary protection (without participation in sickness insurance),
b) type of activity and evidence of part-time employment in accordance with the Health Insurance Act or contract for the performance of work,
c) the employer’s business name, commercial name, or first and last name, as well as the address of its registered office or place of residence.
Ukrainians in the Czech Republic had to prolong their temporary asylum status until the end of March. This is due to a change in the system for giving solidarity benefits for family maintenance and analyzing refugees’ income in order to qualify for humanitarian aid. The income verification control period changed.
This period is now one calendar month preceding the current calendar month in which the foreigner asks for benefits, in order to make it clear what overall income a person has.
The employment center can obtain the income directly from the employer for whom the person with temporary protection has begun working when calculating benefits. First, it is determined whether the application for humanitarian aid is registered with the Czech Social Security Administration as an employee. If such a person is found in the register, the employer sends a request for the amount of salary of a person with temporary protection for the relevant calendar month (the request can be renewed each month).
So, starting July 1, 2023, if the regional office of the Employment Bureau of the Czech Republic asks an employer to send proof of the income of the applicant or other people listed in the application for benefits, the employer must do so within 8 days of receiving the request. If the employer has access to the data box, he sends proof of income through this data box or through an information system according to the specifications, format, and structure released by the Ministry of Labor and Social Affairs of the Czech Republic.
Responsibility should be extended to all employees
This requirement will be extended to other employees. Employers may be compelled to report the employment of all non-health insurance employees as early as 2024. This is required to carry out the objective of limiting employment on periodic or concurrent contracts without mandated contributions from one or more employers.
There are two proposed limits for an employee’s participation in an employment contract (and thus limits for the payment of social security contributions).
The first limit will be set at 25% of the average income for DPP at one employer, while the second (higher) limit will be set at 40% of the typical salary for cases of participation in insurance when combining DPP with multiple employers.
An insurance premium will be paid if an employee exceeds any of these limits. To ensure control over the measure, all DPP contracts and income from these contracts will be registered in ČSSZ (the registration form will be sent to the employer).
However, the package of modifications no longer specifies whether the restriction will apply only to social security contributions or also to health insurance (and possibly to withholding tax if no declaration is made). The practical approach, i.e. how the part-time employer will check whether the remuneration under both or several contracts meets the previously indicated 40% of the average wage, and which employer would pay insurance premiums in the event of a part-time job, has not yet been described. When the draft revisions to the law are ready, the answers to these questions will be available.
How to get started with 360 WEDO?
Send us the form and our specialist will contact you shortly
