CZC LAB Minimum Wage Revaluation


On Oct. 11, CZC LAB proposed regular revaluation of minimum wage.


  • CZC LAB proposed regular valuation of the minimum wage, thus ensuring predictability for employees and companies, in communication sent for interdepartmental comment.
  • Follows CZC LAB Dec. 2022 announced minimum wage increase in 2023, see #159051.
  • Legal Proposals
  • In order to introduce such a facility, an amendment will be made to the Labor Code, which introduces the minimum wage revaluation mechanism for future assessments.
  • According to the proposal the amount of the minimum wage will be the result of the product of the coefficient set CZC GVT and prediction of the average wage in economy.
  • The law will establish clear and predictable rules for both calculating and updating the minimum wage, and will regulate legal form of the guaranteed wage, in two variants.
  • The coefficient will represent targeted ratio of minimum and average wages in a given calendar year, and will be established based it on the criteria that is established by law.
  • Options include purchasing power of statutory minimum wages in relation to the cost of living, the general level of wages and their distribution, and a rate of wage growth.
  • According to first option, 4 groups of jobs will be established, divided according to job qualification requirements, with highest group proposed as 1.6 times minimum wage.
  • The second option is to completely cancel this legislation for the respective calendar year, and CZC LAB will then announce by communication by Sep. 30 of the previous calendar year in relation to the minimum wage, and be based on set legal parameters.
  • Next Steps
  • Proposed amendment will now go through an interdepartmental comment procedure.
  • Its effectiveness is planned for Jul. 1, 2024 and the minimum wage would thus be set for the first time on the basis of the legal revaluation mechanism, for the year 2025.
  • Mar. 2024 Amendment Approved
  • On Mar. 20, 2024, CZC LAB approved the amendment to the Labour Code introducing a minimum wage revaluation mechanism for future minimum wage assessments.
  • Ministry of Labour and Social Affairs will announce minimum wage for each relevant calendar year by Sep. 30, of previous year; set procedure in place for each year.
  • The amount of the minimum wage will be derived from legislative parameters.
  • Amendment comes into force on Jul. 1, 2024; and minimum wage will be set for the first time on the basis of the legal revaluation mechanism, for the year 2025.
  • Jun. 2024 Wage Revaluation Update
  • On Jun. 28, 2024, CZC LAB confirmed the Chamber of Deputies in CZC PRL approved CZC GVT's changes to Labor Code, introducing minimum wage revaluation mechanism.
  • The law will establish clear rules for calculating and updating the minimum wage.
  • The Ministry of Internal Affairs and Communications will announce the minimum wage for each relevant calendar year by a notification, by Sep. 30 of the previous year.
  • The amount of the minimum wage will be derived from the parameters established by legislation, and this then implements one of the points of CZC GVT's legal program.
  • The aim is to ensure that the minimum wage rises transparently and predictably, and this avoids annual negotiations, which often lead to confusion and misunderstanding.
  • The Labor Code will determine mechanism for calculating the minimum wage, define conditions for determining coefficients and frequency, taking account of set criteria.
  • The law will also include a so-called indicative reference value, according to which it will assess adequacy of minimum wage, and is set as 47% of the then average wage.
  • By Aug. 31, 2024 at latest, Ministry of Finance will issue a prediction of the average gross salary for the calendar year 2025, then after consultation with social partners, CZC GVT will determine, by decree, the two coefficients for the years 2025 and 2026.
  • The amendment is to be effective from Aug. 1, 2024, and minimum wage would thus be set for the first time on the basis of the revaluation mechanism for the year 2025.

Regulators CZC LAB; CZC PRL
Entity Types Corp
Reference PR 6/28/2024; PR 3/20/2024; PR 10/11/2023
Functions Compliance; Financial; HR; Legal; Operations; Reporting
Countries Czech Republic
Category
State
Products Corporate
Regions EMEA
Rule Type Final
Rule Date 10/11/2023
Effective Date 8/1/2024
Rule Id 187710
Linked to Rule :159051
Reg. Last Update 6/28/2024
Report Section EU

Last substantive update on 07/03/2024