In a recent ground-breaking decision, the Czech Supreme Court has ruled, that companies have to pay all their employees that work in the same position and whose working conditions are otherwise comparable as regards responsibility, complexity of tasks etc. the same amount of wages throughout the country, regardless where geographically in the Czech Republic the employees perform their work.  

The case that lead to the Supreme Court´s decision was bought up by an employee of the Czech Post based in Olomouc, a city of 100.000 people located in the north-east of the Czech Republic, who was enraged by the fact that he was paid 3.000 CZK (approx. 115 EUR) less per month than colleagues in the same work position, but based in Prague, received per month. The difference in wages made up around 16 percent. On the other hand, housing costs are higher at least by the same percentage in the Prague region than in Olomouc.

The court decision is going to be very costly for employers that operate branches and facilities in different Czech regions, such as retail chains and transport and logistics companies.

Since in the Czech Republic, as in a number of other countries, there are huge differences in cost of living between regions, in particular in regard of housing, it is currently very usual to pay employees in economically stronger, more expensive regions higher wages than those in less expensive localities. At a time where the unemployment rate in the economically strong regions, in particular in and around the capital city of Prague, is close to zero, this is a necessity for employers in order to stay competitive on the job market.

The new Supreme Court Decision now outlawed this practise and, besides being exposed to numerous claims by their employees, they also risk the Labour Inspection imposing fines of up to 1 million CZK (approx. 40.000 EUR).

This has grave impact on a number of employers and may force some of them to change their business models.

UEPA advokáti s.r.o.