State Labour Inspection Office intensifies pressure in the fight against illegal employment and disguised employment intermediation in 2024

According to the State Labour Inspection Office’s annual plan, the State Labour Inspection Office is going to focus on detecting illegal employment and disguised employment intermediation. The Office plans to carry out at least 19,200 inspections this year.

The main objective of the Office’s inspection activities in 2024 is to prevent non-compliance with labour market regulation. The Office will focus primarily on illegal employment and disguised employment intermediation. Illegal employment is understood as performance of dependent work outside an employment relationship (also popularly known as “švarcsystém”) and employment of foreign workers without necessary permits or in violation of the permits’ conditions. Disguised employment intermediation means supplying workforce to employers without the supplier being a licensed employment agency. In the absence of such a licence, the supply of employees is formally disguised as a supply of works or services, although in fact it qualifies as a temporary assignment of employees. Such conduct is subject to a fine which may also be imposed on the recipient of such quasi-services.

The inspections will also verify compliance with adequate working and salary conditions, occupational health and safety rules and rules on employment of foreigners, including temporary protection holders from Ukraine.

Licensed employment agencies can also expect to be inspected, especially those about which the Office received complaints or those which have not been inspected in the past or were inspected more than 3 years ago or which have previously been found non-compliant with employment regulations. Inspections are also expected to be carried out following information from the Ministry of Labour and Social Affairs on non-compliance with legal duties imposed on employment agencies, including the recently imposed ones which agencies were to meet before 31 March 2024 (such as payment of a mandatory deposit of CZK 1,000,000 and submission of debt-free certificates from state authorities and health insurance companies). When inspecting employment agencies, the Office will focus on a number of areas, such as compliance with reporting obligations due to the Ministry of Labour and Social Affairs, keeping records on agency workers, concluding mandatory agreements on temporary assignment of agency workers and compliance with other duties.

Employers face heavy fines for breaching employment regulations. A fine of up to CZK 5,000,000 may be imposed on a natural person for allowing illegal work and up to CZK 10,000,000 may be imposed on a legal entity for the same offence. Failure to comply with the reporting obligation or failure to keep records may result in a fine of up to CZK 100,000 for the employer, irrespective of whether the employer is a natural person or a legal entity.