go to the original language article
Prague – Six out of ten companies are exposing themselves to the risk of lawsuits and penalties because they will not be able to prove that they compensate employees fairly and according to objective criteria. This follows from a survey by the Comp&Ben Association, which brings together key employers in the Czech market. From June 2026, all employers must be able to demonstrate that employees in comparable positions have comparable salaries, including bonuses and other rewards. Companies with more than 100 employees will also have to regularly report differences in the compensation of women and men. This is required by the European directive on transparent remuneration.
“Six out of ten companies are not prepared; either they completely lack a compensation system, or they need to fundamentally redesign it. Almost one-fifth of companies do not even have any compensation system that would objectively explain and justify differences in salaries,” summarized the survey results the director of the Comp&Ben Association Tomáš Jurčík. In practice, implementing or adjusting a compensation system can take several months of intensive work.
The survey further revealed that the challenge for employers is not only the setup of the compensation system itself but also how to explain the differences in salaries to employees. The required transparency encounters internal barriers, such as insufficient employee education, confusion in terminology, distrust, and ingrained habits.
Companies are also concerned about legal risks, especially disputes with employees. While in companies with up to 1,000 employees, 16 percent of respondents consider potential lawsuits a problem, in large companies, it is more than double, at 36 percent. “Partly due to the larger number of employees, and partly because it is more complicated to set up compensation in a large company so that it is equitable to all employees. Moreover, the rules must not only be well set but also understandable and clearly communicated to employees,” explained a member of the association and partner at the law firm Borovec Legal David Borovec.
Sixty-two percent of employers lack sufficient information, 56 percent would need more, and six percent have none at all. It is not just about minor adjustments to the payroll agenda. “For many companies, this means completely redesigning job descriptions, compensation policies, and the way compensation is communicated. And this is at a time when the details of the transposition of the EU directive on transparent remuneration into Czech legislation are still unknown,” stated the vice president of the Comp&Ben Association Radka Motlová. (November 11)