Czech Business Today

The Czech lab our market is under mounting pressure from structural inefficiencies, high labour taxation, and burdensome administrative processes. Without meaningful reforms, businesses warn that economic growth will stagnate, wage growth will slow, and the country’s competitiveness within the EU will deteriorate further.

Participants at a recent policy roundtable hosted by the Czech Chamber of Commerce voiced strong concerns over the inflexibility of the current labour market framework. A common theme emerged: too many groups—including parents of young children, seniors, students, and people with disabilities—remain economically inactive due to legal and systemic barriers. Employers see these groups as a major untapped resource that could help mitigate growing labour shortages, provided the right legislative adjustments are made.

Several measures aimed at modernizing the labour code have already been introduced, such as a partial revision allowing more flexible contracts and a forthcoming system for unified monthly employer reporting. While these are viewed as steps in the right direction, stakeholders agree that deeper reforms are necessary to reflect the realities of a 21st-century labour market.

Another pressing issue is the slow and fragmented process for hiring foreign workers, which remains a bottleneck for Czech industry. Businesses routinely face months of delays before being able to bring in essential staff from abroad, while neighbouring countries offer streamlined processes that take weeks. For a country whose economy relies heavily on manufacturing and technical sectors, this inefficiency is unsustainable.

In this context, the President of the Czech Chamber of Commerce, Zdeněk Zajíček, highlighted the burden of labour taxation. “The Czech Republic ranks among the countries with the highest labour cost burden in Europe. And despite political promises, we fear the trend may continue in the wrong direction. Instead of reducing taxes and social contributions, we risk further increases, unless structural reforms are made,” he warned.

He pointed out that unless major mandatory expenditure systems—healthcare, pensions, education, and social support—are comprehensively reformed, the fiscal sustainability of the state will be at risk. The likely outcome would be either excessive public debt or a heavier financial burden on employers and their workers, both of which would undermine competitiveness.

Zajíček also presented the Chamber’s “Regulatory and Bureaucratic Detox” initiative, aimed at reducing unnecessary regulation and simplifying the legal framework. He used the example of the unified monthly employer reporting system to demonstrate what can be achieved through meaningful cooperation between public authorities and the private sector. According to him, such projects require clear political leadership, technically skilled staff within the administration, and proper public procurement practices to deliver the necessary digital infrastructure.

All political representatives present supported further digitalization of administrative processes and agreed on the importance of simplifying employer obligations. However, it was also noted that such ambitions will remain unfulfilled without strong ministerial leadership, a clear project mandate, and active partnership with the business community. While opinions differed on the balance between social support and fiscal discipline, there was consensus on one point: the Czech labour market must become more adaptable, responsive, and supportive of both employers and employees.

Source:The Czech Chamber of Commerce.