Lexology GTDT Market Intelligence provides a unique perspective on evolving legal and regulatory landscapes. This interview is taken from the Remote Working volume discussing topics including post-covid 19 work policies, remote working trends, employer's tax obligations and more, within key jurisdictions worldwide.


1 What are the most consequential issues that an employer should consider when determining its post-covid-19 remote work policies?

Every employer should keep in mind that Czech laws lack an adequate legal framework for remote work and that in general, the employer is required to comply with the same set of rules and obligations applicable to regular work from the employer’s workplace. In addition, remote work arrangement requires an agreement with the particular employee that should, due also to the absence of an adequate legal framework, address terms and conditions of remote work.

The most consequential issues are health and safety at work, compensation of costs related to working from home to employees, protection of confidential data, including access codes to various internal systems of the employer and effective supervision of the work performed by remote employees, including obligatory tracking of their work time.

2 Pragmatically speaking, is there a threshold to determine when working remotely (from home or otherwise) requires local rules to apply?

No, currently there is no such obligatory threshold. Remote work may be designed as full-time as well as occasional remote work. However, quite recently, there were legislative attempts (so far unsuccessful) to provide certain categories of employees (eg, those taking care of children under 15 years of age) with a right to request up to 50 per cent of working time from home. We would anticipate similar attempts in the near future in connection with the obligation to implement the EU Work-life Balance Directive into our local legislation.

3 If employees voluntarily move away from their main work location, can employers unilaterally impose locally appropriate compensation packages?

The employer is required to provide equal pay and other compensation to the employees for the same work performed under the same conditions regardless of the location or region in the Czech Republic and regardless of the actual costs of living in such locations or regions. Such a requirement was recently confirmed by a decision of the Czech Constitutional Court, although the outcome of the decision has been subject to strong criticism from legal professionals.

In addition, if the salary and other compensation arrangements are agreed between the employer and the employee (as opposed to being determined by the employer in a salary statement), the employer may not change such an arrangement unilaterally.

4 Do you anticipate a rising trend of employers hiring remote workers as opposed to managing office-based employees who subsequently go remote? What practical issues should employers bear in mind when considering remote hiring?

Such a trend already exists in certain areas of industry and for certain professions, particularly in IT industry and professions of SW developers and programmers.

In addition, the trend we are currently seeing in our practice, obviously due to the covid-19 pandemic, is that employers have started paying careful attention to preparing home or remote work arrangements with employees and remote work policies in case the situation would require switching to remote work mode, while bearing in mind the inadequacies of the Czech legislative framework for remote work.

Employers considering hiring remote employees should always bear mind that the employer is still legally responsible for the health and safety at work of remote employees and compliance with workplace health and safety at work regulations, as well as other issues discussed in question 1.

5 Do local laws provide remote employees with more generous leave entitlements, such as sick leave? Can employees avail themselves of leave entitlements in both the primary work location and the remote work location?

The local laws do not provide remote employees with more generous leave entitlements. In fact, remote employees who schedule their own work time are provided with certain types of leave (eg, leave due to medical examination) only as unpaid as opposed to paid leave entitlement for employees working at the employer’s premises.

6 What are some best practices for protecting confidential and proprietary information in a remote work environment?

From our experience, it is absolutely imperative to provide sufficient training and instruction to employees in this area. This applies especially to employers that are subject to specific public law regulation (General Data Protection Regulation, electronic communications, competition law regulation). In fact, the need to effectively protect confidential information is often the reason why remote work is not an option for employees in certain positions.

A lot of our clients require employees to work remotely using exclusively equipment provided by the employer. The employee is required to log in the internal system or application of the employer using unique access code and the activity of the employee is tracked during performing work. The employee is often only allowed to access parts of the internal system or application that he or she needs for work.

7 How does a remote employee affect the employer’s tax obligations? Do the employee’s activities render the employer to be ‘doing business’ in the remote location? Will these activities create a taxable presence for the foreign employer in the local jurisdiction?

Remote work has several tax aspects that should always be consulted on with tax advisers. Calculating and providing compensation for the costs incurred by an employee in connection with remote work (costs of electricity, heating, internet connection or using the employee’s own equipment) is one of them. Such compensation is not subject to health and social security insurance contributions to the extent such compensation corresponds to the actual costs incurred by the employee – such calculation of compensation is, in reality, extremely difficult. Obviously, employers and employees would prefer using an agreed flat-rate compensation instead. However, this raises tax concerns and, so far, has encountered a lack of understanding from the local tax authorities. For the reason specified above, providing such compensation of costs and their calculation may be subject to inspection from the tax or social security authorities.

The issue of creating a potential taxable presence via remote employees is quite complex and requires thorough review by tax advisers. The character of the activity of the employee working remotely and of the employer’s economic activity must be assessed. For example, if the foreign employer only has remote employees in the Czech Republic and their activities performed for the employer include negotiating and concluding contracts with local customers on behalf of the foreign employer, establishing a taxable presence in the local jurisdiction would be quite likely.

8 What are some best practices for tracking remote work arrangements?

As already mentioned, a lot of our clients require remote employees to log into internal systems or applications while working remotely. Employee activities, including the time spent working, are monitored and tracked. Of course, this brings up several issues regarding protection of employee privacy, and employers are required to provide transparent information and instructions to the employees in this respect.


The Inside Track

What do you think are the most exciting and promising opportunities of remote working? How do you think it will affect the future of work?

For many of our clients, the long-term or permanent remote working of the majority of their employees is not, and will not be, an equal option to work performed from the employer’s workplace and also raises serious concerns and risks. Some of the concerns and risks would be eliminated or mitigated by reasonable legal regulation of remote work. Nonetheless, the possibility of at least occasional remote work provides a big opportunity for employees to combine work and personal life and is a great tool to engage employees who cannot work regularly full-time from the employer’s premises.

In your view, what are the most difficult challenges raised by the rise of remote working? How do you think employers should tackle these challenges and adapt accordingly?

The legal framework for remote working is almost non-existent in the Czech Republic. Basically, the rules applicable to regular work from the employer’s workplace apply to remote work. This may lead to absurd situations where the employer is responsible for complying with rules in matters it has effectively no control over.

Employers must carefully assess their individual situation and activities, including whether the option of remote work is at all viable, and specify terms and conditions for remote work in agreement with their employees and internal policies.

What do you enjoy most about practising and advising in this area?

It is challenging and exciting. The Czech Labour Code falls significantly behind the economic development and modern requirements and demands on cooperation with employees, including flexible forms of employment such as remote work. Often, therefore, the requirements from clients seeking legal advice appear impossible from a legal perspective. However, we enjoy finding the best possible, reasonable, business-oriented and, if necessary, courageous and innovative solutions for our clients, and we are excited to help implementing such solutions in our clients’ daily practice.