As part of the Aliant+ platform, our law firm has contributed to the preparation of a practical guide entitled LABOUR & EMPLOYMENT GENDER PAY GAP ANALYSIS, which examines this issue across 15 different jurisdictions.
This guide not only summarises the new obligations arising from European legislation and the forthcoming amendment to the Labour Code applicable to employers in the Czech Republic but also allows for a comparison of approaches in other countries, which may be beneficial not only for entities operating across different jurisdictions but also serve as a source of inspiration for local companies.
As regards the Czech Republic, transparent and equal pay for women and men, and the associated new obligations, will be enshrined in Czech law by the forthcoming amendment to the Labour Code (scheduled to come into force as of 1 January 2027), which transposes Directive (EU) 2023/970 of the European Parliament and of the Council (EU) 2023/970 of 10 May 2023, to strengthen the application of the principle of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms.
Key changes and obligations:
- Obligation to establish a written remuneration system: All employers in the Czech Republic will be required to set out clear remuneration rules, based on transparent and gender-neutral criteria, and to categorise job roles into groups according to the value of the work. The remuneration system must be set out in the employer’s internal regulations or agreed in a collective agreement.
- Mandatory reporting: The obligation to report pay gaps between men and women will be phased in. For large employers (250 or more employees) and medium-sized employers (150 to 249 employees), this obligation will come into force as of 1 January 2028; for employers with 100 or more employees, it will come into force as of 1 January 2031.
- Risks and penalties: Failure to comply with the new obligations will be classified as new administrative offences in the area of equal treatment, for which employers will face fines from the Labour Inspectorate, in some cases amounting to up to one million crowns. Furthermore, the risk of legal disputes in which employees seek back pay, bonuses and other payments from their employers is also expected to increase.
How to prepare:
We recommend carrying out a timely internal audit of your current remuneration system, rectifying any identified inequalities, establishing clear and fair rules, and issuing the relevant internal regulations.
A summary and the methodology can be found in the aforementioned guide Labour & Employment Gender Pay Gap Analysis, which focuses not only on the Czech Republic but also allows for a comparison with the legal frameworks in 14 other jurisdictions, not only in Europe.