An Amendment to Act no. 435/2004 Coll., on employment, was adopted and took effect on 5 January 2012. This Amendment gives a new obligation to every employer to have copies of the employment contracts of all employees at their place of work (working site). In the case of foreign employees, copies of documents proving the legality of their residence in the Czech Republic have to be at the working site as well.
This Amendment accomplishes EU Directive no. 2009/52/EC of 18 June 2009 providing for minimum standards on sanctions and measures against employers of illegally employing third-country nationals. The main objective of this Directive (and the Amendment) is to prevent the employment of foreigners from third countries illegally residing in the territory of the Czech Republic (and the EU).
In case of an audit from the State Authority for Labour Inspection (Státní úrad inspekce práce – SÚIP), non-compliance with the given obligation (i.e. failure to present employment contracts to the SÚIP controllers) will be considered “illegal work” (despite the fact that the documents could be presented afterwards).
A penalty from CZK 250,000 to CZK 10,000,000 can be imposed on employers who do not comply with this obligation. http://www.balcarpolansky.cz/files/107/Legal%20Alert%20December%202011_ENG.pdf