Proposed Czech labor law could hinder hiring of foreign talent

A proposed change to Czech employment law could slow the hiring of skilled foreign workers, raising concerns among businesses, especially startups and tech firms. The amendment, recently passed by the government, requires companies hiring foreign workers to register in a new database of verified employers. 

Under the proposed rule, only companies listed in this registry can legally hire workers from outside the EU. This includes granting work permits or visas such as the Blue Card or dual employee card—this could affect potentially hundreds of thousands of third-country jobseekers looking to find work in Czechia. 

If the law is passed, it will come into effect in January 2026. The Ministry of the Interior and Labor Office say the amendment is designed to combat illegal labor practices and protect foreign workers from exploitation.

However, many businesses argue that the new requirement will create delays and administrative burdens. Startups and fast-growing companies, which often depend on foreign talent, may struggle to stay competitive.

Critics are particularly worried about the impact on the technology and innovation sectors. Startups and international subsidiaries must first obtain approval from CzechInvest, a state agency. This process involves submitting detailed business plans and meeting specific conditions, such as employing at least one worker for six months.

“This adds unnecessary complexity,” Filip Mikschik, director of employment website StartupJobs, told Czech media outlet Seznam Zprávy. “While ensuring legitimate hiring practices is important, this process could stifle innovation. What if bureaucrats fail to recognize the potential of a new idea?” he asked.

Martin Jiránek, head of the Czech Startup Association, echoed these concerns. “Startups hire highly skilled professionals who are unlikely to face exploitation. The sector needs more flexibility, not more obstacles,” he told Czech media.

The proposed rules could weaken Czechia’s competitiveness in industries that depend on fast hiring. Petr Chládek, director of Brno’s innovation agency JIC, warned of broader economic effects. “In our industry, quick recruitment is key to seizing market opportunities,” he said.

The Ministry of Labor and Social Affairs has downplayed these worries, claiming the process will be streamlined and mostly digital. However, past difficulties with digital reforms leave many skeptical.

Czechia’s labor market remains tight. In 2023, foreign workers made up 18.5 percent of the workforce, according to the Czech Statistical Office. Yet, a survey found 66 percent of companies struggle to fill positions, pushing them to look abroad.

Adding to the challenges, employers will face higher costs for foreign workers starting Jan. 1, 2025, when the minimum wage for such employees rises to CZK 25,376 (gross) per month.