New requirement for the placement of foreign workers from 1 January 2026
The most significant legislative change is a restriction coming into force on 1 January 2026: from now on, foreign nationals for less skilled positions may only be placed by employment agencies holding a so-called ‘repeated licence for employment mediation’. This requires the agency to have operated continuously and without incident for at least three years.
The aim of the measure is to curb the establishment of short-term, ad-hoc agencies, which in the past served as a means of circumventing obligations when employing foreign nationals. In practice, this means that users must verify not only the validity of the agency’s licence, but now also its type. The use of an agency with only a basic licence to place a foreign worker in a less skilled position has been unlawful since the start of the year, regardless of the user’s good faith.
Inspection pressure is intensifying
In the area of agency employment inspections, the trend that has already been evident in previous years is expected to continue in 2026. The Labour Inspectorate carried out almost 20,000 inspections in 2024, with more than 6,000 relating to suspected illegal employment or disguised job placement. Fines imposed in this area totalled approximately 300 million crowns.
A significant change is the greater involvement of the tax authorities, which are coordinating their efforts to address the tax and social security implications of such misconduct. In 2024, coordinated inspections led to additional tax assessments amounting to hundreds of millions of crowns. Both authorities have announced continued cooperation for 2026 and an expansion of their scope to sectors that have not yet been a primary target – in addition to logistics, construction and hospitality, IT services and e-commerce are now in the spotlight.
The legislative basis for this stricter approach has been provided by amendments in recent years: the Labour Inspectorate has broader powers to obtain records, the definition of illegal work has been tightened, and an offence of unreported work by foreign nationals has been introduced, carrying a fine of up to 3 million crowns.
Disguised employment agency services: the greatest legal and financial threat to users
The greatest risk in practice remains disguised employment agency services – a situation where the user effectively receives assigned labour from an entity without the relevant employment agency licence, typically on the basis of a contract for work or another subcontracting agreement. The law penalises not only the provider of such services, but also the user who facilitates this arrangement.
During inspections, the Labour Inspectorate does not base its assessment on the title of the contract, but on the actual situation. The key indicators of disguised agency work are: the client (the user) themselves assigns, organises and supervises the work of the formal contractor’s staff; the contractor does not carry out the work at their own expense and risk; and there are no signs of the contractor’s actual professional competence. It is of no help if the contract formally reads as a contract for work – the SÚIP assesses the reality, not the name.
The principle of a comparable employee: a persistent source of disputes
The law imposes an obligation on both the employment agency and the user to ensure that the working and pay conditions of a temporarily assigned employee are no worse than those of a comparable permanent employee of the user. The principle applies to pay, allowances, working hours, leave and non-monetary benefits.
In practice, however, identifying a comparable employee – particularly where no permanent employee exists in the relevant role – presents a legally complex task. The user’s internal pay scales and benefits automatically become the legal benchmark for agency workers’ entitlements. For large employers assigning hundreds of agency workers, the cumulative wage top-up for the duration of the assignment can reach tens of millions of crowns – regardless of whether the breach was intentional.
Temporary nature of assignments: a structural weakness in Czech legislation
The Labour Code stipulates that an agency may not assign the same employee to the same user for a period exceeding 12 consecutive calendar months. In practice, this restriction is systematically circumvented: the employee signs a request for an extension of the assignment (usually prepared in advance by the agency), thereby continuing to work at the same place for many years to come without any actual restriction.
The Court of Justice of the European Union, in Case C-232/20, held that the repetition of temporary assignments for a period of approximately 55 months, in the absence of relevant circumstances, cannot be classified as temporary within the meaning of Directive 2008/104/EC. Czech legislation does not yet contain safeguards to prevent circumvention of this requirement. The legislature has thus not yet responded to EU case law on this point, leaving open the potential for future disputes regarding the deemed existence of an employment relationship with the user.
Licensing conditions have been tightened: what employment agencies must comply with
From 1 January 2024, stricter conditions for employment agencies will apply, extending through to 2026. The security deposit required to obtain an employment agency licence is CZK 1,000,000. A further condition is that the agency must be debt-free – it must demonstrate this at the time of application and maintain this status throughout the licence’s validity, with verification taking place at least once every six months. The conditions for the revocation of a licence to operate an agency employment service have also been clarified. The grounds for revocation include, in particular, the placement of illegal work, repeated failure to cooperate with labour inspection authorities, or the failure to place any employees for a period of two years. These measures aim to protect employees’ rights and increase the accountability of employment agencies.
Practical recommendations for users
Companies using agency employment should review the following areas in particular in 2026: verification of the agency’s current licence type, specifically with regard to the new condition of repeated authorisation when assigning foreign nationals to less skilled positions; reviewing subcontracting agreements to rule out any signs of disguised agency work; assessing the remuneration structure for agency workers in relation to comparable permanent staff; and, in the case of long-term assignments exceeding 12 months, conducting a legal analysis of the risk of a deemed employment relationship arising.
Conclusion
Agency employment remains an indispensable tool for workforce flexibility, but its legal framework is becoming stricter every year and the regulatory environment is intensifying. Coordination between the Labour Inspectorate and the tax authorities, new offences carrying heavy penalties, and persistent EU pressure to review the rules on the temporary nature of assignments clearly demonstrate that this is an area requiring ongoing legal attention.
