Czech Republic: 10% of Employment Agencies are Illegal

Approximately a tenth of employment agencies working in the Czech labor market are called "grey agencies", who use temporary gaps in employment to employ temporary workers, robbing both the employees themselves and the state, according to estimates from Grafton Recruitment.

Grafton added that there are approximately 103,000 workers who are working through such ‘grey’ agencies Most of them work for manufacturing companies, logistics centres and warehouses.

These illegal agencies bypass a number of regulations when hiring temps such as not paying them bonuses and benefits.

“The legal agency fulfills all the obligations of an employment relationship with the employee, according to the law,” Grafton Recruitment manager Miroslava Chvojková, said. “It carries out social and health insurance and taxes, and ensures that it has comparable wage and working conditions with the assigned employer.”

Chvojková said that a common practice involving illegal ‘grey’ agencies is when they pay a temporary employee a minimum wage and then pay the rest of their wages in travel compensation, which are not taxed and reduces the amount of tax that the agency has to pay.

According to Grafton, illegal agencies also take advantage of employees who may not know the legislation and do not know what they are entitled to as agency workers, or the rules surrounding commissions and wage bonuses.

“For those who want to work through the agency, they should always check to see whether they are a legal agency with a valid license,” Grafton said.


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