New developments in the field of work performance agreements

In connection with the amendment to the Labour Code, the terms and conditions of work performance agreements have been modified. Some of the changes have already been in force since October 2023, others are only effective now from 1 January 2024. And we can look forward to further changes from the second half of 2024. So gradually:

From 1 October 2023, employers must schedule the working time of contract workers at least 3 days before the start of their shift. Breaks must be observed in the same way as if it were a normal employment relationship. Employees on a FTE are also entitled to time off in the event of an obstacle to work on the employee's side (e.g. a doctor's visit), but without pay (these hours are not even counted as hours worked). In the case of working on holidays, nights, weekends, conciliators are entitled to an additional payment just like employees on HPP based on average earnings.

The employer now has a so-called information obligation. Within 7 days, the employee must be informed in writing of the content of the legal relations arising from these agreements. It is therefore recommended that the employee is given an internal document to sign at the same time as the agreement, which sets out the details of the information stipulated by the state. The Ministry of Labour and Social Affairs has prepared a document for this purpose, which can be downloaded and adapted to the current conditions in the company.

In the event of termination of the agreement under certain conditions, the contractual partner is now also entitled to justify the termination. If the conciliator has worked more than 180 days in the last year, he can request in writing to be reinstated in his normal employment, but if the employer does not comply, he must give written reasons why this has not been done.

In 2024, there is a big change in the calculation of the agreement fee. If the agreement exceeds 80 hours worked and the agreement is continuous for a minimum of 4 weeks, the employee is entitled to holiday pay. The limit for the application of withholding tax in the case of a PPA is linked to the employee's participation in sickness insurance, so the fixed limit of 10k has been abolished. The limit is set at CZK 10.5.

As regards the changes from 1 July 2024, it is not yet clear what will appear in the final version of the law. The idea behind all these changes is primarily to at least partially level the playing field between agreements and regular employment relationships. Secondarily, it will also be about adjusting the rules so that more money is paid into the state budget from agreements.