Behind closed doors in the Czech Republic, a sensitive issue is sparking debates and informal business discussions: Should employees have the right to know their colleagues’ salaries? This question arises in the context of an impending European Directive that mandates such transparency, leading to the necessary implementation of corresponding laws in the Czech Republic. Companies contacted by Právo express apprehension about the potential adjustments and their implications.

Employers are raising concerns that revealing salary information may be misused by less competent workers, potentially causing disruptions in workplace relationships and business operations. Peter Vavrda, the head of Alpha Czech, employing approximately thirty people, calls it an “absurd thing” that could lead to disputes among employees, given the diverse qualities and responsibilities across different roles.

While the EU directive is not anticipated to grant individuals access to specific colleagues’ salaries, Jakub Augusta, a spokesperson for the Ministry of Labor, clarifies that the right to information will be limited to average earnings in the same or comparable positions by gender. However, this still allows individuals to deduce whether they earn less than their colleagues and potentially seek explanations from employers. Employers would then be obligated to clarify the criteria for rewarding individuals and the reasons behind wage discrepancies.

The implementation of the law mandating salary disclosure is still in its early stages, with Minister of Labor and Social Affairs Marian Jurečka emphasizing the government’s intent to first clarify how to handle European legislation. As a result, the new law is not expected to take effect before 2025.

Critics argue that these impending changes could pose challenges for smaller businesses, potentially enabling exploitation to pressure employers and limiting their flexibility to reward high-performing employees based on individual contributions and results. Jakub Svoboda, a lawyer at AK Arzinger & Partners, emphasizes the need for careful consideration to strike a balance between transparency and preserving the ability of businesses to recognize and reward employee performance appropriately.

Article by Prague Forum