In accordance with EU law, an amendment to the Employment Act was recently adopted affecting employers that use third-country nationals(1) to perform work without a valid residence permit. The amendment entered into force on January 5 2012.

Employers must keep a copy of the residence permit during the employment relationship and for three years following termination. Employers are further required to inform the regional labour office, in writing, that they have employed a third-country national no later than on the day of commencement of employment.

Violation of these obligations may have adverse consequences for employers in the form of monetary penalties. Illegally employing foreigners without a residence permit can result in penalties ranging from Kr250,000 up to Kr10 million (approximately €10,000 to €400,000).

These penalties do not relieve employers of the obligation to pay all outstanding remuneration to the employee and any tax, social or health contributions arising from pay, as well as the costs related to sending his or her pay to his or her country of residence. If the employer or foreigner fails to prove otherwise, it is considered that the agreed amount of remuneration corresponds to the statutory minimum wage and that the employment relationship lasted three months.

Other measures may affect employers caught illegally employing third-country nationals. They include:

  • exclusion for up to three years from entitlement to all public benefits (eg, subsidies) or participation in public tenders; or
  • a requirement to return any public benefits granted to the employer during the 12 months before discovery of the illegal employment.

For further information on this topic please contact Matěj Daněk or Tomáš Liškutín at PRK Partners Attorneys at Law by telephone (+420 221 430 111), fax (+420 224 235 450) or email ([email protected] or [email protected]).


(1) A 'third-country national' is defined as a person (or a person's family member) that is not a citizen of an EU member state, a European Economic Area state or Switzerland.