The employment contract
A standard employment contract (pracovní smlouva) is governed by the Labour Code. It gives the engineer the full protection of Czech employment law: paid holiday, sick pay and a notice period of at least two months on either side.
On top of the gross salary, the employer pays social security and health insurance contributions — roughly a third of the gross amount. Budget for the total cost, not the salary.
The contractor on a trade licence
Many Czech engineers work as self-employed contractors with a trade licence (živnostenský list) and invoice under their company identification number, the IČO. For clients this means monthly invoices, no payroll and flexible terms.
It suits genuinely independent work: a defined result, the contractor's own tools and schedule, and freedom to work for other clients.
The line you must not cross
Czech law defines dependent work — work performed personally, under the employer's instructions, in a relationship of superiority and subordination. Dependent work may only be performed in an employment relationship.
Running what is in substance employment through a trade licence is known as švarcsystém. It is treated as illegal work, and both the company and the individual face significant fines, plus back-payment of contributions. The label on the contract does not decide it; the way the work is actually done does.
Where team augmentation fits
In an augmentation engagement the engineer contracts with the provider, and the provider contracts with you. The provider is responsible for choosing the right legal form for each person and for keeping it consistent with how the work is really organised — which is why it pays to discuss working arrangements before the first day, not after.
A checklist for any engineering contract
- Intellectual property: an explicit assignment of work results to your company.
- Confidentiality: an NDA signed before access to code or data.
- Notice and termination: how quickly either side can end the engagement.
- Place and mode of work: remote, hybrid or on-site, written down.
- Access and equipment: who provides laptops and accounts, and how they are returned.
- Data protection: GDPR roles and a data processing agreement where personal data is involved.
This article is general information, not legal advice. Have a Czech employment lawyer review your specific arrangements.