Along with the amendment to the Labour Code, effective from 1 October 2023, changes have been made to the remuneration of employees working for their employer on the basis of agreements held outside the employment relationship. An important change is the entitlement of these employees to additional payments. Find out what the rules are for remuneration in this article.
Remuneration from agreements outside the employment relationship
Employees working under agreements outside the employment relationship are entitled to remuneration. The amount of remuneration from the agreement and the conditions for granting it are agreed in the agreement on the performance of work or the agreement on work activity concluded by the employer with the employee. The agreed remuneration from the agreement may be:
- Hourly (remuneration for 1 hour worked, total remuneration per calendar month is based on the number of hours worked)
- Monthly (agreed remuneration per calendar month regardless of the number of hours worked)
- Task (reward for completing the task)
Employees may also be awarded an exceptional bonus for exceptional performance.
Whether an employee is compensated by hourly, monthly or piece rate, he or she will always evidence is required his hours of work in hours. The first reason for recording hours worked is compliance with the rules on working time on the basis of agreements held outside the employment relationship, the second reason is compliance with the minimum wage for a given calendar year and another reason is the correct calculation of average hourly earnings. Furthermore, it is statutorily the obligation to keep records due to the observance of rest periods, shift lengths, allowances and on-call time.
Rules concerning the length of service of agreements:
- Hours worked on the basis of all work performance agreements with one employer shall not exceed 300 hours per calendar year (the time worked on each of the DPPs held for the same employer is added together)
- Hours worked on the basis of a work agreement shall not exceed on average half of the weekly working time in the organisation (e.g. for a fixed working week of 40 hours, the average number of hours worked on the basis of a FTE must not exceed 20 hours per week)
Minimum wage for agreements:
Based on the provisions of § Section 111 of the Labour Code the remuneration from the agreement must not be less than the minimum wage. If an employee working under a work performance agreement or a work activity agreement does not earn at least the minimum wage, the employer is obliged to provide the employee with additional remuneration from the agreement, which is equal to the difference between the amount of remuneration from the agreement per 1 hour and the relevant minimum hourly wage. The minimum hourly wage in 2024 is CZK 112.50/40 hours per week. For these purposes, the remuneration under the agreement does not include additional payments for working on public holidays, night work, difficult working conditions and Saturday and Sunday work.
Entitlement to supplements for agreements
With effect from 1 October 2023, employees working under agreements held outside the employment relationship are entitled to additional payments. For the purposes of the fringe benefits, the remuneration from the agreement is considered as wages. Consequently, agreement workers have entitlement to additional pay for working on public holidays, night work, working in difficult working conditions and working on Saturdays and Sundays.
Extra pay for working on public holidays
For work performed on a public holiday, the employee shall be entitled to time off in lieu to the extent of work performed on a public holiday or surcharge for working on a public holiday in the amount of average earnings.
Night work allowance
For night work, the employee shall be entitled to a supplement of at least 10 % of average earnings. A different minimum amount and a different method of determination may be agreed.
Hardship allowance
For work in a difficult working environment, a supplement of at least 10 % of the basic minimum wage rate.
Extra pay for work on Saturdays and Sundays
For work on Saturdays and Sundays, the employee shall be entitled to a supplement of at least 10 % of average earnings.
AVENSIO SW programme
To enter remuneration from agreements, supplement to the minimum wage and for additional payments are in the programme AVENSIO SW available system codes, to set up the appropriate user pay codes.
