Kurzarbeit (also known as “short-time work”) will be implemented into the Czech legal system following a recent amendment to the Act on Employment being approved by Parliament and signed by the President on 4 August 2015. The precise effective date of the Bill is not yet known, however, it will not be any later than 1 January 2016.

Contribution amount

Under the new law, companies that are struggling as a result of financial difficulty or have been affected by natural disasters have the power to reduce the salaries of employees who cannot be assigned sufficient work by up to 30%. In addition, the companies now have the opportunity to seek a contribution of up to 20% of the affected employee´s salary from the state. The law envisages further caps on the state contribution: in particular, the contribution must not exceed 12,5% of the average wage in the Czech Republic, set out in the first three quarters of the previous calendar year.

Application requirements

Companies wishing to receive a contribution from the state will have to apply for such grant and each application must be approved by the Czech government. The financial aid to the companies will be provided for six months and this term can generally only repeated once. The Czech government does, however, have scope to provide longer term-support, however this will be decided on a case-by-case basis.