Employment of third-country nationals in the Czech Republic

Who is a third-country national and what are their rights to work in the Czech Republic

This basic principle seems simple, but in practice, companies, especially small and medium-sized ones, are often unaware of it. You only find out when a labour inspector discovers that your foreign train driver or site manager is working without the proper authorization. The penalties for so-called illegal work can reach up to CZK 10 million for legal entities. Therefore, it's the right time to clarify which work permits are available to you.

Four types of work permits for third-country nationals

When you decide to bring a third-country national to the Czech Republic, you essentially have four paths. Each has its own rules, qualification requirements, durations, and approval processes. It's not just about picking 'any one,' but about understanding which option fits your situation and your company.

Work Permit

A work permit is a specific authorization used only in cases stipulated by law (e.g., seasonal work, short-term internships, posting by a foreign employer). It requires a relatively simple process: the employer reports a vacancy to the Labour Office, the foreigner applies for the permit, and if the basic conditions are met, the Labour Office issues a decision.

This permit is issued for a maximum of 2 years (or a shorter period in some cases) and can be extended. It is suitable for one-off projects or situations where you want to 'test' a worker first and avoid the longer commitments associated with dual cards. But be careful – there are special conditions. For seasonal employment, the permit is issued for a maximum of 9 months only.

Most importantly, even if the work permit is issued relatively quickly, the foreigner cannot automatically use it yet. They also need the appropriate residence permit – typically a Schengen visa for employment purposes (up to 90 days) or a long-term visa or residence permit under Section 30 et seq. of the Act on the Residence of Foreign Nationals. This is handled at the embassy in the citizen's home country, where waiting times commonly reach several weeks or months.

Employee Card

The Employee Card is a long-term residence permit that also serves as a work permit (a so-called dual card) regulated in Section 42g of the Act on the Residence of Foreign Nationals. It is suitable if you want to hire a foreigner for an indefinite period or at least for several years. The holder of an Employee Card can work at their designated job position without needing to apply for another permit from the Labour Office.

The foreigner must have an employment contract with a minimum monthly wage at least equal to the current minimum wage and work a minimum of 15 hours per week. The job position must be registered in the Central Register of Vacancies – the employer must report it to the Labour Office. Only after the position is registered and the labour market test period has passed can the foreigner apply at the embassy.

This is where things get complicated: Employee Cards are issued within government quotas – not all embassies accept an unlimited number of applications. The approval period by the Ministry of the Interior is usually 60 days, but in complex cases, it can be up to 90 days. The foreigner must then arrange for comprehensive travel health insurance in the Czech Republic and only after arriving in the country can they collect the card in person.

Please note that the first change of employer is possible no earlier than 6 months after receiving the card (except for specific exceptions, such as termination by the employer).

Blue Card

The Blue Card is intended for foreigners with a university degree or higher professional education (lasting at least 3 years) under Section 42i of the Act on the Residence of Foreign Nationals. It is a more prestigious tool used by the Czech Republic to attract experts in IT, medicine, engineering, and other fields.

The agreed gross monthly salary must be at least 1.5 times the average gross annual salary announced by the Ministry of Labour and Social Affairs (MPSV). The Blue Card is issued for the duration of the employment contract plus 3 months, but for a maximum of 3 years. 

The main advantages are faster processing (a 90-day deadline, often faster in practice) and easier mobility within the EU. After a certain period (usually 12 months), a Blue Card holder can change employers simply by notifying the Ministry of the Interior, without a complex approval process.

Intra-Company Employee Transfer Card

The last type of permit is for specific situations: when a multinational company transfers its employee (a manager, specialist, or trainee) from a branch outside the EU to a branch in the Czech Republic. This is the Intra-Company Employee Transfer Card, regulated in Section 42k of the Act on the Residence of Foreign Nationals.

The essence is that the foreigner must have been employed for at least 6 months at their home company (outside the EU) before they can be temporarily transferred to the Czech Republic. There is no need to report a vacancy or undergo a labour market test. The card is issued for the duration of the transfer, but for a maximum of 3 years for managers and specialists, and 1 year for trainees.

Health Insurance – A Mandatory Part of the Package

When you hire a third-country national, they must be insured. If they enter into an employment relationship with you (employment contract, agreement to perform work), they automatically become a participant in the Czech public health insurance system – just like any Czech citizen. Contributions are paid from their salary as standard.

For the purpose of visas for over 90 days and residence permits, the foreigner must provide proof of comprehensive health insurance under Section 180j of the Act on the Residence of Foreign Nationals. This is because in the period between arriving in the Czech Republic and starting employment, the foreigner is not covered by the public system. The minimum insurance coverage must be EUR 400,000.

Previously, Pojišťovna VZP had a monopoly on this insurance, but that has been abolished. Now, foreigners can choose from a range of insurance companies authorized to provide this insurance in the Czech Republic. Without valid insurance, a foreigner cannot legally reside in the Czech Republic, and the Ministry of the Interior or the Foreigners' Police strictly require proof of insurance.

How to Correctly Report a Vacancy

Whether you choose a work permit, an Employee Card, or a Blue Card, all these paths start with the same first step: you must report the vacancy to the Labour Office of the Czech Republic. This is not just an option – it is a legal obligation.

However, to obtain a card, reporting the vacancy and having it included in the central register is essential. This does not apply to intra-company transfers or specific exceptions for foreigners with free access to the labour market, where it is sufficient to report the position upon commencement of work.

What must you state? The basic characteristics of the position – type of work, place of work, prerequisites and requirements, information on working and salary conditions (salary, indefinite/fixed-term). The position is entered into the Central Register of Vacancies.

For a foreigner to apply for an Employee or Blue Card, the position must pass the so-called labour market test to verify that no suitable Czech candidate is available.

New Rule from July 2024: Reporting Before Commencement

From 1 July 2024, an amendment to the Employment Act came into effect, fundamentally changing the rules for reporting the commencement of work by foreigners. Previously, an employer could report a foreigner's start date no later than the day the foreigner began working.

Now, the employer must report the start of employment to the Labour Office no later than on the day of commencement, but in practice, the system requires the report to be made before the employee actually starts performing the work. This obligation stems from the amended wording of Section 87 of the Employment Act.

This rule applies to all foreigners who need a permit, as well as those with free access to the labour market. If a labour inspection finds a foreigner at the workplace who has not been properly reported, it may be assessed as a failure to comply with the reporting obligation.

Why is this important? The fine for failing to comply with the reporting obligation can be up to CZK 100,000. If the foreigner also lacks a valid work permit, it is considered illegal work, with a fine of up to CZK 10 million.

The electronic report of commencement must be handled in a timely manner. If you have a new employee starting on Monday at 8 a.m., we recommend sending the report no later than Friday or early Monday morning before their arrival.

Digitalization of Reporting – Mandatory Online from July 2024

With the new legislation from 1 July 2024, mandatory digitalization has also been introduced: the report of an employee's commencement (information card) must be sent exclusively electronically in accordance with information from the MPSV.

The old paper form sent by post or delivered in person is no longer accepted. You have a web form on the MPSV portal, an XML file sent to the data box of the Labour Office of the Czech Republic, or direct integration with your payroll software.

Once the employer successfully submits the report, it is registered in the system. If you do not send the report electronically in the specified format, it is considered as not having been submitted, which exposes you to the risk of a fine.

How to Correctly Prepare a Work Permit Application

The preparation process differs for each card, but the basic framework remains the same. The details determine success.

Collection of Documents by the Employee

The foreigner will need to provide originals or officially certified copies according to Section 31 of the Act on the Residence of Foreign Nationals. This includes a valid passport, employment contract, proof of accommodation, a photograph, proof of qualifications, and a criminal record extract. The documents (except for the passport) must generally not be older than 180 days.

The ARROWS law firm ensures these documents are checked before submission to prevent them from being rejected on formal grounds.

Preparation of the Employment Contract

The employment contract must meet the legal limits. For an Employee Card, a salary at least equal to the minimum wage and a working time of at least 15 hours per week are required. For a Blue Card, a salary of 1.5 times the average wage and a contract for at least 6 months are required.

Reporting a Vacancy

You must report the position to the Labour Office register and mark that it is also intended for foreigners. The labour market test period must pass (typically 30 days, can be shortened to 10 days) before the foreigner can submit their application. The reference number of this vacancy is included in the card application.

Submitting the Application Itself

The foreigner submits the application in person at a Czech embassy abroad. Biometric data is collected during the submission. There are exceptions for government programs that allow for mass recruitment.

Seasonal Employment – A Special Regime

For sectors dependent on the time of year, such as agriculture, horticulture, or tourism, there is the institute of seasonal employment under Section 96 of the Employment Act. The foreigner applies for a Schengen visa for employment purposes, and the employer arranges a work permit. This applies to short-term stays of up to 90 days.

For stays longer than 90 days, a long-term visa for the purpose of seasonal employment is issued for a maximum of 6 months. It can be extended, but for a total maximum of 9 months within a 12-month period. The foreigner must provide an employment contract and proof of accommodation. A stay based on seasonal employment does not count towards the 5 years of residence required for permanent residency.

Economic Migration Programs – Accelerating the Process

The Czech government offers programs to accelerate the migration of skilled workers, which guarantee the opportunity to submit an application at an embassy and speed up the process. These include programs for key and scientific personnel, highly qualified employees, and qualified employees for medium-skilled positions.

Participation in a program requires the employer to meet conditions such as being debt-free, having a certain history or number of employees, and being included in the program by the relevant guarantor.

The ARROWS law firm will help you with the administration associated with inclusion in these programs, which can shorten the waiting time to submit an application by months.

Checks and Inspections – What to Expect When an Inspector Arrives

The State Labour Inspection Office (SÚIP) and the Foreigners' Police conduct inspections focused on illegal employment. The inspection verifies the validity of residence and work permits, the consistency of the type of work with the permit, and whether the employer has copies of the documents at the workplace.

It is also checked whether the commencement of work was duly and timely reported digitally. The discovery of illegal work can lead to a fine of up to CZK 10 million and exclusion from economic migration programs or the inability to employ foreigners in the future.

How the ARROWS Law Firm Can Help You

The lawyers at the ARROWS law firm deal with the employment of foreigners daily. We provide strategic consulting in selecting visas, complete administration of contracts and forms, audits of your processes, and representation during inspections by the Labour Inspectorate.

Thanks to our insurance coverage of up to CZK 350 million and an extensive team of specialists, you are in safe hands. The ARROWS law firm works with dozens of large corporations as well as smaller companies.

Conclusion

Employing third-country nationals is an effective solution to labour shortages, but it requires precise legal preparation. A single mistake in a reporting deadline or permit type can result in fines in the millions.

If you don't want to take risks and want to have the process set up correctly and efficiently, turn to the ARROWS law firm. Write to us at consultation@arws.cz, and we will provide you with a tailored legal solution.