As part of the amendment to the Employment Act,1 effective from 1 October 2025, the Czech Republic introduces a new legal concept: “unreported work.” This change significantly tightens the reporting obligations of employers when hiring foreign nationals.
WHY THIS MATTERS
The amendment aligns Czech legislation with common European Union (EU) practice and aims to enhance transparency, bolster effective oversight, and heighten enforcement regarding the employment of foreign nationals.
The new rules mean that employers will have to adapt their current practices around notifying the authorities about their hiring of foreign nationals.
More Details/Key Changes
Employers will now be required to report the start of employment by the foreign national worker before the actual commencement of work (at the latest, one day before starting work), rather than on the same day. Failure to comply will be considered as unreported work, a newly-defined administrative offence for which the employers may be penalised with a fine of up to CZK 3 million.
Reporting Deadline Shift: Under the current rules, employers must report the foreign national’s employment start date no later than on the first day the individual reports for work to carry out his/her duties. With the upcoming change, employers will have to notify the Labour Office (Úřad práce) no later than the day before the foreign national employee starts working.
Definition of Unreported Work: Any failure to meet this deadline will be classified as “unreported work.”
Fine: As unreported work is a newly-introduced administrative offence, it can incur a new fine of up to CZK 3 million that would be imposed on the employer that fails to comply with the reporting requirement.
Scope: The rule change applies only to the reporting of employment commencement. The reporting requirements in respect of changes and terminations remain unchanged.
KPMG INSIGHTS
Recent amendments to immigration and employment legislation in the Czech Republic reflect certain tightening of the rules for employers. Authorities are increasingly focused on preventing illegal employment and circumvention of legal obligations.
The introduction of the unreported work concept is another step in a series of measures aimed at more effective tracking of the employment of foreign nationals in the country, improving compliance, and enhancing oversight.
The reporting change could instigate employers to undertake a careful review of and update to their internal onboarding procedures for foreign employees. Implementing appropriate technical and procedural mechanisms can help ensure the new reporting obligation is met in a timely, proper manner – specifically, before the commencement of the work.
Employers and affected stakeholders that have questions about the changes to the procedures for reporting the hiring of foreign nationals, e.g., the timing and related administration, should reach out to their qualified immigration and/or employment law advisers or a member of the immigration team with KPMG in the Czech Republic (see the Contacts section).
FOOTNOTE:
1 The amendment is included in Zákon č. 435/2004 Sb. (Employment Act No. 435/2004 Coll.) at: https://www.zakonyprolidi.cz/cs/2004-435/zneni-20251001.
Contacts
Disclaimer
* Please note the KPMG International member firm in the United States does not provide immigration or labour law services. However, KPMG Law LLP in Canada can assist clients with U.S. immigration matters.
The information contained in this newsletter was submitted by the KPMG International member firm in the Czech Republic.
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