Amendment to the Labour Code: changes in the Area of Home Office
The amendment to the Labour Code No. 262/2006 Coll. (the “Amendment”), which incorporates some of the recommendations contained in EU directives, was signed by President Petr Pavel on 17 September 2023. Since the autumn of the previous year, when the proposal was first published, it has undergone significant changes, including in the area of rules for remote work, commonly known as home office. We present to you the most important points in this area.
Written Agreement
The fundamental prerequisite for remote work will be a written agreement between the employee and the employer. This agreement can be made separately or can be a part of the employment contract or an agreement on work performed
outside of an employment relationship. While law does not expressly stipulate specific details of the agreement, for the legal certainty of both parties it is recommended to specify at least the basic conditions for remote work. These conditions
include, in particular, the location(s) of remote work, communication methods, work schedule arrangement, workload, task assignment, and work supervision. It is also advisable to address occupational health and safety principles and the
security of entrusted resources.
We would like to draw your attention to the transitional provision, which obliges employers to conclude remote work agreements with all employees who have been already allowed to work remotely by the employer but have not yet signed
a written agreement within 1 month from the effective date of the Amendment.
Cost Reimbursement
One of the most debated points was the calculation and reimbursement of actual costs for remote work. The Amendment introduces a significant simplification by allowing the payment of a lumpsum cost reimbursement, according to the decree
of the Ministry of Labour and Social Affairs (the current proposal is CZK 4.60 per hour of work).
Alternatively, the employers and the employees can agree in writing that the employee is not entitled to cost reimbursement related to remote work. A third, albeit administratively the most complex option, remains the reimbursement of costs that the employee proves to the employer.
Tax Implications
The subsequent legislative amendment in the Income Tax Act stipulates that a lump-sum reimbursement in the specified amount will not be subject to income tax for the employee, nor to contributions for social security and health insurance. Simultaneously, such incurred costs will be considered tax-deductible for the employer.
Reimbursements exceeding the statutory limit will be considered taxable income for the employee. Reimbursements for other types of expenses not covered by the lump-sum amount, which the employee incurred and documented, will not be
subject to taxation on the employee‘s side.
Privileged Groups of Employees
An extensively discussed area concerned the entitlement to work from home for employees caring for children under 9 years of age or other dependent individuals, and pregnant female employees. The Amendment continues to provide advantages for these individuals, although they will not have a legal entitlement to remote work, as originally proposed.
The current wording of the Amendment allows these individuals to request remote work, and if the employer denies the request, he must provide a written explanation to the employee.
Termination of Remote Work
The commitment arising from the remote work agreement can be terminated by written agreement between the employer and the employee on a mutually agreed date. Both the employer and the employee can also terminate the commitment
in writing, either for any reason or without specifying a reason, with a notice period of fifteen days. The proposal also allows the parties to agree on the different notice period or even that neither party can terminate the commitment from the agreement. The amendment to the Labour Code will come into effect on October 1, 2023.
Authors:
Anna Klímová, Editor, Mazars Tax View
Gabriela Ivanco, Tax Manager
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