Based on repeated requirements arising from payroll practice, the government has decided to expand the range of employees who will be permitted to be paid in foreign currency as part of the upcoming amendment to the Labour Code. This change is aimed at reducing transaction costs borne by employees.
According to the current legislation, it is possible to provide wages in a foreign currency only to employees performing work abroad, with their consent. If the amendment is approved, the range of employees will be extended to include:
- foreigners who perform work on the basis of a work permit, employee card or long-term residence permit for the purpose of performing highly qualified employment;
- Foreigners for whom the above-mentioned permits are not required by law;
- Citizens of other EU Member States who are not citizens of the Czech Republic or do not have permanent residence in the Czech Republic;
- Other employees who live abroad permanently or cover their family’s living expenses there.
It is therefore obvious that the Labour Code will continue to require a strong connection of the employee to the foreign country to be paid in a foreign currency.
The range of currencies, in which it will be possible to pay wages, is limited to the so-called foreign exchange market currencies for which the Czech National Bank announces exchange rates.
The amendment was approved by the government in August 2024. The proposed effective date is 1 January 2025.
Autor: Barbora Šmoková, Radka Nováková
