Amendment to the Employment Act - Czech "short-time working" allowance


On 1 July 2021, an amendment to the Employment Act came into effect introducing new institute of the so-called "short-time working" allowance. This is intended to be anti-crisis measure – kind of benefit for situations when it is necessary to support keeping of jobs whose preserving is exposed to external factors. Providing of this support requires its activation based on issuing of governmental order. The reasons for issuing of such a governmental order may be of an economic nature, or may arise due to a natural event, epidemic, cyber-attack or other emergency situation of vis maior. The governmental order can also determine that the providing of such support is limited sectorally or regionally.

Provided that the relevant conditions are met, the state will take over the employer's wage costs within the time when the employee is not working; the employer will not pay the employee's wages during this time however the Labour Office will provide to the employer contribution (allowance) for the employee. The Employment Act refers to this support as a "part-time work allowance" and it is intended for situations which the Labour Code qualifies as obstacles to work on part of employer under § 207 - § 209 of the Czech Labour Code. 

The maximum duration of the supported period can be 12 months and the support is available only for employees whose employment relationship lasts at least 3 months. The allowance shall be granted for the period during which the employee is not assigned to work, at the rate of 80 % of the employee's wage compensation, plus the social security and public health insurance contributions paid by the employer on behalf of their employees. The maximum amount of the allowance is 1,5 times of the average wage in the national economy per a specified period of time.

The explanatory memorandum to the amendment characterizes the allowance during the “short-time working” as a system instrument for keeping of jobs in the event of their threat by external factors; such support for this kind of situations has not been legislatively regulated in the Czech Republic yet.