Permits to mediate employment complicate employment of foreign nationals
Last year’s amendment to the Act on the Residence of Foreign Nationals forbids foreigners with employee cards to change their employers if these are employment agencies, i.e. entities holding a licence for the mediation of employment. These involve “true” employment agencies, entities mediating employment only exceptionally, and also recruitment agencies. This is a significant complication for both foreigners and potential employers.
To provide employment agency services, i.e. the temporary lease of employees to clients for consideration, but also to provide recruitment-related services, it is necessary to obtain a valid permit for the mediation of employment. Permits are issued by the General Directorate of the Czech Labour Office. In the Czech Republic, to date, almost 2,200 entities have been authorised to mediate employment. The majority of them carry out this activity as their principal business, representing employment agencies in the true sense of the word.
However, licences are also held by entities mediating employment only as a secondary or supplemental business or those who have kept their licence should they need to use it in the future. The legal definition of an employment agency is also met by entities engaged in recruitment, or advisory and consulting on job opportunities.
For all the above licence holders, the recruitment of new foreign personnel has become much harder since the end of July 2019. From this date, the amendment to the Act on the Residence of Foreign Nationals forbids the holders of employee cards (i.e. the permits necessary to perform work as a foreigner in the territory of the Czech Republic) to change employers and start a new position if their future employer is to be an employment agency. While this change of regulation was probably intended to only target true employment agencies, it does not distinguish between a situation where the mediation of employment is an entity’s primary or secondary activity and one where an entity is only engaged in recruitment. The foreigner’s option to change employers is generally forbidden to all employment agencies, i.e. all licence holders under the act.
Legislators are not currently contemplating the cancellation or at least a mitigation of the above strict ban. We therefore recommend examining whether your entity is the holder of a licence for employment mediation, and if you are planning to obtain this licence, you should consider whether it is really necessary, as you may be exposed to the risk that you will not be allowed to recruit a potential candidate holding an employee card.