News in Labor Law – Higher Taxation for Extra Income and Stricter Rules for Employment Agencies
Changes in Czech Labor Law have entered in force. Photo: Senate CR.
Czech Republic, August 24 (BD) – News in Labor Law: Unemployed and registered with the Labor Office who earn some extra money fall under higher taxation now. Registered sick job-seekers must submit confirmed medical certificate.
Plus, it was a commonplace that employees of a company could enjoy better working conditions and higher salaries. Such practices should diminish now.
Jiří Vaňásek, Deputy Minister of Labor and Social Affairs, informs that the new Amendment to the Labor Law from July 29, 2017 should ensure more fairness and transparency of employment agencies with assisting people in finding a new job.
Higher taxes for extra income
Since July 29, 2017, it is not possible to earn some extra money without stricter taxation. So far jobseekers could earn 5 500 CZK (half of minimal wage) having signed an agreement to complete a job (in Czech: DPP, Dohoda o provedení práce) almost with no taxation.
Newly, an agreement to perform work (in Czech: DPČ, Dohoda o provedení činnosti) or an employment contract facilitates such a part-time job.
For some, DPP turns into DPČ
Job-seekers who worked under an agreement to complete a job (DPP) have to decide whether to change the agreement to an agreement to perform work (DPČ) or to stay registered with the Labor Office. It is up to them to choose one of the possibilities within three months of the date on which this Amendment takes effect.
Either way, jobseekers lose some of their extra money due to the Amendment. Under DPČ contract, a jobseeker is a subject to social and healthcare taxation as soon as the gross salary exceeds 2 500 CZK.
A part of insurance is covered by employer, yet 6,5% is paid by a jobseeker. Healthcare insurance system is quite similar. When earning extra money of over 2 500 CZK while registered with the Labor Office, a jobseeker is obliged to pay 4,5 % of the gross salary to the healthcare.
You worked on DPP contract but after July 29, 2017 you switched to DPČ contract. Your gross income is 5 000 CZK. Social insurance then costs you 325 CZK and healthcare insurance accounts for 225 CZK. Compulsory deductions will in such scenario cost you 550 CZK altogether.
Sickness when registered with the Labor Office must be officially confirmed
Registered jobseeker prevented by sickness or accident from performing their duties is obliged to submit a confirmed medical certificate to the Office. The rule comes into effect October 1, 2017.
Equal conditions for agency’s and company’s employees
Temporary agency workers should be also safeguarded from unfair working conditions thanks to the Amendment. It used to be a commonplace that employees of a company could enjoy better working conditions and higher salaries. Such practices should diminish by now.
The Amendment requires from DPP, DPČ or other contracts detailed working and wage conditions of a company’s employee assigned to the same job position as a temporary agency worker, so both types of workers would be treated equally.
Find full version of this article at JobSpin.cz.