Illegal employment

Abstract

Since 2007 Labour Code contains the definition of dependent work, which can be carried out only in labour-law relations. The Amendment to Labour Code from 2012 makes the definition more precise, when it stipulates essential elements of dependent work and designates the others as conditions, under which dependent work should be carried out. The Amendment to Employment Act changes the definition of illegal work. Illegal work is a performance of dependent work by natural person except for labour-law relation, or if natural person – foreigner carries out work in conflict with issued permission to employment or without this permission. Since 2012 sanctions for illegal work were increased. Labour inspection is entitled to impose sanctions, in case of foreigners it is Customs Office. For control purposes employer is obliged to have copies of documents at the workplace proving the existence of labour-law relation. Goal of controls and high fines is to limit illegal employment of citizens of Czech Republic and foreigners as well. Illegal work has unfavourable economic impact on state budget. It comes to extensive tax evasions and also to evasions within health insurance and social security. If a concluded commercial-law relation meets the attributes of dependent work, then it stands for a concealed legal relationship. Tax Office can subsequently assess an income tax to businessman. Labour-law relationship enjoys a higher legal protection than commercial-law relationship; nonetheless it is not suitable to limit liberty of contract in cases when it is not unambiguously a dependent activity.

Keywords

• dependent work
• illegal work
• Labour Code
• Employment Act
• “Svarcsystem”