If you are planning to employ a foreign national from outside the European Union, you have probably come across the term Labour Market Test (LMT). Although this term does not appear explicitly in Czech legislation, it has long been one of the key steps in the process of employing third-country nationals.
What exactly is the Labour Market Test? Does it still apply today? And what rules do employers need to follow?
What Is the Labour Market Test?
The Labour Market Test is a procedure used to determine whether a vacant position can be filled by a foreign national or whether there is a suitable candidate available among Czech citizens, EU citizens, or individuals registered with the Czech Labour Office as job seekers.
In other words, the Czech Labour Office assesses whether it is genuinely necessary to fill the position with a foreign worker or whether the vacancy can be filled by someone already available on the Czech labour market.
How Does the Labour Market Test Work?
The principle is relatively straightforward.
If a Czech employer intends to hire a third-country national (i.e. a citizen of a country outside the European Union), the employer must first report the vacant position to the Czech Labour Office and consent to its publication in the central register of vacant job positions.
Only then does the Labour Office assess whether there is a suitable candidate registered in the Czech Republic. If no suitable candidate is available, the position may be filled by a foreign national.
This process is referred to as the Labour Market Test.
Why Is the Labour Market Test Important?
The purpose of the Labour Market Test is to protect the local labour market.
Imagine a situation where a major employer closes its operations in a particular region and hundreds of people lose their jobs such as welders, production workers, administrative staff, IT specialists, or engineers.
If another employer wishes to recruit foreign workers for similar positions, the regional branch of the Czech Labour Office first verifies whether those vacancies could instead be offered to people who have recently become unemployed.
The objective is to ensure that local job seekers are given priority before employers recruit workers from abroad.
Does the Labour Market Test Still Apply?
The good news for employers is that the Labour Market Test was abolished on 1 July 2024.
The reason is the long-term shortage of workers and historically low unemployment in the Czech Republic. As a result, employers no longer need to wait for the Labour Office to verify whether suitable candidates are available. Vacant positions can now be designated for foreign nationals immediately.
Before 1 July 2024, however, vacancies generally had to remain published for 10 to 30 days (depending on the region and the type of position) before the employment process for a foreign national could begin.
Can the Labour Market Test Be Reintroduced?
Yes.
Although the Labour Market Test is currently abolished, Czech legislation still allows it to be reintroduced if labour market conditions change significantly. For example, if unemployment rises sharply in a particular region, the Labour Office may decide to reinstate the Labour Market Test.
In such cases, employers would once again be required to allow the Labour Office to verify whether a suitable local candidate is available before hiring a foreign national.
Summary
The Labour Market Test is a mechanism designed to protect the Czech labour market by giving priority to local job seekers before positions are filled by foreign nationals. Since 1 July 2024, the Labour Market Test has been abolished due to favourable labour market conditions, making it easier for employers to hire third-country nationals. Nevertheless, employers should continue to monitor legislative developments, as the Labour Market Test may be reintroduced if labour market conditions deteriorate in the future.
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