The Ministry of Labour and Social Affairs has submitted the long-awaited draft Pay Transparency Act for inter-ministerial consultation, implementing the relevant EU Directive. The main part of the new Czech regulation is expected to take effect on 1 January 2027.

Under the proposal, all employers, regardless of size (including those with fewer than 50 employees), will be required to establish a remuneration system and classify positions into groups based on their value. Employers will not be allowed to request information about candidates' previous pay, and employees will gain the right to request information about their own remuneration, as well as the average remuneration within their job group, broken down by gender.

For larger employers, the draft introduces the obligation to prepare a report on pay differences within job groups:

📆 annually for employers with 250 or more employees;

📆 every three years for employers with 150 to 249 employees;

📆 from 1 January 2031, also for employers with 100 to 149 employees.

If reported pay differences are not objectively justified or remedied, the employer will be required to conduct a pay assessment and adopt corrective measures. The proposal provides not only for greater transparency but also for sanctions, as it amends the Labour Inspection Act and introduces fines ranging from CZK 400,000 to CZK 1,000,000.

Author: Helena Hailichová and Stanislav Mitrofan