The amendment to the Employment Act coming into effect on 1 April 2022 will expand the data required to be stated in the form for the Czech Social Insurance Administration.
The originally separate form for the Labour Office used to calculate unemployment benefits will be replaced.
Furthermore, pursuant to the amended Sec. 42 para. 3 of the Employment Act the labour offices will obtain these data from the register with the Czech Social Insurance Administration. The employer will hand them over here at the end of the employee’s contracted employment or cancellation of sickness insurance, by using the Employment Commencement Notification Form (end of employment).
Now the data will state the following:
- type of employment,
- duration of employment,
- period of pension insurance,
- the average or likely monthly net earnings determined under the applicable legislation
- expenses for redundancy, lump-sum termination and severance payment, including information whether it was paid out
- method and reason for ending employment.
The employer is required to send this form within 8 days from the day the employment ends.
If the employer does not report the termination of the employment period with the employee by the legally set deadline, he will be committing an offence under the provisions of Sec. 131 para. 1 letter f) of the Act on Sickness Insurance, for which he/she will be liable for a fine of 20,000 CZK.
Coming into effect as of 1 April 2022, the aforementioned provision is amended so that the employer commits an offence if he/she reports to the regional social insurance administrator for the purpose of sickness insurance the end of the employment period with the employee under Sec. 94 para. 1, meaning by the legally set deadline. However, if the employer reports the required data by the set deadline, though without the newly required data (as of April 2022), it will be regarded as an offence too. This time, however, the possible fine is 100,000 CZK.
Determining the average earnings appears problematic here. An eight-day deadline will be, in most cases, absolutely sufficient. However, problems may arise the moment that the employee ends the contracted employment at the beginning of the new quarter, for example on 2 April. If the employer’s payment deadline is set for the 15 April, then he/she will not have all materials for processing wages, and thus for correct determination of average earnings for the previous quarter, available within eight days.
According to a statement by the Ministry of Labour and Social Affairs the employer should be able to ensure that he/she would set and confirm the average earnings by the set deadline through an awareness of the obligation legally set by internal mechanisms. A violation of these obligations in terms of the Employment Act may be punished as non-compliance with the reporting obligation, incurring a fine of 100,000 CZK. When determining the fine for committing an offence, its severity will at the same time be taken into account.
Since this is a new obligation, it cannot be predicted how similar cases will be handled and punished in reality.
