Czech Ombudsman Pavel Varvařovský has again threatened to resign from his post unless the lower house or Parliament adopts changes he has proposed, for example on a draft law that would allow municipalities to ban repeat offenders without a permanent residence from living there for up to three months.
The Czech state long ago made the practice of hiring de facto employees but paying them as if they were doing contract work — dubbed “the Švarc system”— illegal, but tens of thousands of companies and “self-employed” contractors continued to rob the state of tax revenue in this manner with little fear of reprisal. That was all meant to change in January, when parliament approved a revised Labor Code with far higher fines, but now legislators themselves appear to be major offenders.
As an employer who plans some corporate restructuring, transfer of enterprise or simple outsourcing of some key activities, from next year on, things might get very complicated as of January 1, 2012, when the new Czech Labor Code takes effect — so nasty that you might decide to abstain from such restructuring.
The Social Democrat-controlled Senate sent an amendment changing the law on foreign workers back to the lower house. They mainly objected to a part of the law that would require foreigners who stay more than 90 days to pay for health insurance. Business leaders find other parts of the bill more troublesome.