DPP / DPČ working contracts are very popular in labour relations because of their flexibility and low taxation for the employer.
Beginning from October,1, 2023, the Labour Code was amended, resulting in significant changes in the regulation of work contracts (DPP) and employment contracts (DPČ). There are new obligations and rights for both employers and employees, which requires everyone’s attention.
The conditions for employees working under DPP and DPČ are now closer to the classical labour relations.
1. A right to paid vacation.
An important new change is that the DPP employees have got the right for paid vacation. From 2024, entitlement to paid holidays will be granted after four weeks of employment with a minimum of 80 hours worked.
The terms and conditions of holidays entitlement are essentially the same as in a traditionalLabor Contract, except that the pay is calculated as if the employee worked part-time.
For every 20 hours worked, the employee is entitled to approximately 1.5 hours of vacaion time, rounded up to the nearest whole hour. If the employee does not use the accrued leave, the employer will have to reimburse the employee after the end of the agreed work, just as in a traditional employment relationship.
2. A right to additional pay out.
Except their hourly rate of pay, employees on DPP and DPČ will be entitled now to additional pay out for the night shift, weekends, public holidays and working under difficult conditions .
3. Information obligations of the employees by the employer.
The employer is now obliged to inform the employee in advance of any changes in job duties and working hours.
There is now an obligation for employers to inform their employees about the progress of their work and to inform them of their work schedule at least three days before the start of their shift.
If, for example, an employee arrives for a previously agreed shift and finds out at the workplace that it has been cancelled, the employer will have to reimburse the employee for the full cost of the shift.
In such a way, the “contractors” can be better prepared for their work , but not to learn about it on the day, they have to do it. In fact, this can make the DPP/DPC contracts not so much flexibile.
4. Conversion from DPP and DPČ to a classical Labor contract and dismissal.
If a temporary employee has worked for the employer for at least 180 days in the previous 12 months, he or she may request for a switch to a classical Labor Contract by writing an application . If the company does not want to fulfil the request, it must inform the employee of the reason also in written form.
The employer is obliged to inform the employee in writing of the reasons for dismissal without any delay, otherwise the employer can face the sanctions up to CZK 200,000.
Employees with a labour agreement will also be entitled to so-called work impediments, i.e. they can go to a doctor’s appointment or take time off if a life situation requires it. The employer is obliged to grant time off, but without the right to pay out money.
5. Change of deductions for DPP and DPČ contracts.
Taxation for DPČ remains the same, i.e. up to CZK 3,999 per month – no deductions.
The government package of measures introduced from 2024 includes a change in participation in sickness insurance and social security contributions for employees working on the basis of work contracts (DPP). Every employer using temporary employees will be required to register with the relevant Social Security Administration. This regulation will come into force from 01.07.2024.
The following rules will be introduced under the DPP contract:
if an individual works for only one employer under a temporary contract and his/her salary will exceed 25% of the established average salary, social and health insurance must be paid on such income. In 2024, the limit is CZK 10,500.
If an individual works on DPP contract with several employers at the same time, such salary will be subjected to social and health insurance when it exceeds the amount of 40% of the average salary (summed over all contracts). For the year 2024, this is CZK 17,500.
!The employee is obliged to inform the employer of all valid employment contracts.
6. Transition to electronic contracts.
The Labour contracts can be concluded electronically, e.g. by e-mail. It will also be possible to conclude additions or amendments to contracts in this form.
If the employee agrees, it will also be possible to terminate the contract electronically, providing that notice of termination is sent to the employee’s personal e-mail address, which the employee informs in writing. Consent can be withdrawn at any time, again in writing.
The employee’s consent to send a letter to the employee’s electronic mailbox (datová schránka) will not be required. If the person does not read such a message within 10 days from the date of delivery, it will be considered as delivered.
7. Child care leave.
The employer is obliged to grant childcare leave upon the written request of an employee.
Child care leave is granted to the child’s mother after the end of maternity leave, and to the father – from the birth of the child, to the extent they request it, but not more than until the child reaches the age of 3 years.
The application shall be submitted by the employee no later than 30 days before the start of the parental leave, unless serious reasons prevent this, the application shall specify the duration of the parental leave.
Recommendations to employers.
We advise to review the model documents, amending existing labour agreements with the adopted changes.
The introduction of new amendments to contracts (DPP) / (DPČ) brings an additional bureaucratic burden for managers and accountants.
It is very important to have a reliable partner in times of constant changes in legislation. DoMyTax team will help you to get ready to all changes in time.
We have been providing accounting and tax support to our clients for over 15 years.
Your DoMyTax.
