Redefining Dependent Work: What Does This Mean for Employers and Employees?

The package of legislative changes aimed at consolidating public finances, does not only include the abolition of certain public holidays, but also an amendment to the Labor Code. The amendment concerns the modified definition of dependent work.

This update reflects the legislator’s effort to align the legal framework with the realities of the modern labor market, where remote work, hybrid models, and flexible working hours have become the norm rather than the exception. At the same time, the amendment aims to limit practices that circumvent labor law protections.

What is changing in the definition of dependent work?

Dependent work is traditionally defined as work performed in a relationship of employer superiority and employee subordination, carried out personally by the employee, according to the employer’s instructions, on the employer’s behalf, and at a time determined by the employer.

The amendment removes the last element – working time determined by the employer – from the definition. This seemingly technical change has significant practical consequences. It ensures that employees who work from home, under flexible schedules, or in hybrid arrangements continue to fall clearly within the scope of dependent work and remain fully protected by labor law. In other words, flexibility in working hours will no longer create legal uncertainty as to whether an employment relationship exists.

A clearer line between employment and self-employment

The revised definition also strengthens the distinction between employment relationships and self-employment. This distinction is crucial, as it determines not only labor law protection, but also social security contributions, health insurance, tax treatment, and entitlement to benefits.

According to the explanatory memorandum, one of the key goals of the amendment is to curb the circumvention of labor law through contractual arrangements that formally appear as business cooperation but, in substance, function as employment relationships (so-called „švarc-systém“).

Although such arrangements may appear financially attractive in the short term, they are illegal and expose both employers and individuals to significant risks, including fines, retroactive payment of contributions and loss of public subsidies or reliefs.

Why this matters beyond legal compliance

Beyond regulatory sanctions, disguised employment often disadvantages the individual performing the work. A self-employed person operating in what is effectively an employment relationship does not enjoy the same level of protection as an employee, for example in the event of termination, illness, or workplace disputes, despite performing dependent work in practice.

Practical implications

Overall, the amendment helps the Labor Code remain relevant in a rapidly changing labor environment. It provides clearer guidance for employers when structuring working arrangements, strengthens employee protection, and equips authorities with a more precise legal tool to identify unlawful subcontracting.

For companies relying on flexible working models or external contractors, the upcoming changes are a timely reminder to reassess existing arrangements and ensure they are aligned with the substance – not just the form – of labor law.

By JUDr. Valter Pieger

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