Petra Silovská: Foreigners Have Become Essential to the Czech Labour Market

The Czech labour market is undergoing a fundamental transformation. Foreign workers are no longer merely a supplement to the domestic workforce; they are becoming one of the key pillars of the Czech economy. We discussed the future of labour migration, recruitment of third-country nationals, the risks of illegal employment, unfair practices of employment agencies, and the upcoming European pay transparency directive with Petra Silovská, former diplomat and former Head of the Foreign Employment Department at the Ministry of Labour and Social Affairs.

From Public Administration to Legal Practice: Twenty Years of Turbulence

Spending two decades in public administration may evoke an image of routine and bureaucracy. However, this was certainly not the case for Petra Silovská. During her career, she experienced some of the key moments of modern Czech history - from the Czech Republic’s first Presidency of the Council of the European Union and the fall of the government in 2009 to the police raid at the Government Office in 2013.

"It was a major shock. Paradoxically, however, during periods of caretaker governments, public institutions gained more space to focus on their work. Professional managers took over, and decision-making became much more logical and expertise-driven", recalls Silovská.

At the same time, she openly criticises a recurring phenomenon in Czech politics - "from one extreme to another" approach, where each new political leadership tends to dismantle the work of its predecessors and introduce popular but insufficiently developed measures.

The Labour Market in Transition: Foreign Workers Have Become a Key Pillar of the Economy

According to Silovská, the transformation over the past decade has been dramatic. Around 2016, the main concerns were Brexit and the uncertainty faced by Czech citizens working in the United Kingdom. The employment of foreign workers in the Czech Republic was barely discussed. The domestic workforce was still able to meet market demand, and government labour migration programmes did not yet exist.

Today, there are approximately one million employment relationships held by foreign nationals in the Czech Republic.

"This is no longer a supplementary solution. It is an absolutely essential pillar without which the Czech labour market could not function. I do not know any major company today that could operate without foreign workers," she emphasises.

Ukraine, the Philippines and the Global Competition for Workers

One of the major challenges ahead is the future of nearly 400,000 Ukrainian refugees currently living in the Czech Republic. At the governmental level, different approaches are being debated - the Ministry of Industry and Trade warns about a potential loss of workforce, while the Ministry of the Interior advocates stricter rules for those who have not integrated.

The situation is further complicated by discussions with Ukraine itself, which will need its citizens for post-war reconstruction and is concerned about losing part of its skilled population.

Especially in manufacturing and industrial sectors, recruitment of workers from the Philippines has therefore become a major trend. The annual quota has increased from 3,000 to the current 10,500 Filipino workers.

Why the Philippines?

Language skills:
Due to the historical influence of the United States, English is widely spoken, including among people from remote islands.

Cultural proximity:
The Philippines is a predominantly Christian country with a reputation for a friendly and cooperative approach.

Government support:
The Philippine government has a specialised institution responsible for overseas employment and actively supports sending workers abroad. The country benefits from administrative fees and remittances sent by workers to their families.

The Risks of Illegal Employment: Where Are the Biggest Threats?

With the arrival of thousands of foreign workers, the risk of exploitation has also increased. One of the most serious challenges in the Czech labour market is the presence of so-called “ready-made” employment agencies and disguised labour intermediation.

Unethical actors resell licences, misuse disguised service agreements in logistics centres, and when inspections by the State Labour Inspection Office occur, they disappear or transfer companies to "front men".

The state is responding with stricter measures, including the introduction of the concept of undeclared work and the obligation to report employees into the Unified Monthly Employer Reporting System (JMHZ) before they physically start working.

Pay Transparency Directive: Unnecessary Fear or a Revolution?

A major topic currently discussed across the HR community is the European Pay Transparency Directive. According to Petra Silovská, however, the issue is surrounded by unnecessary concern.

Key Insights on the Pay Transparency Directive

Equal pay obligations already exist in Czech law
The Czech Labour Code has long established the obligation to provide equal remuneration for equal work or work of equal value. The issue is not only about gender equality but about fairness in general.

Companies should move away from individual salary negotiations
Employers already generally have structured budgets and systematic evaluation of positions based on complexity, responsibility, and required skills. Negotiating salaries based solely on a candidate’s previous pay should become a thing of the past.

Warning against minimalist implementation
Silovská warns against an approach where the Czech government attempts to weaken the new rules. Insufficient implementation of obligations may lead to infringement proceedings initiated by the European Commission.

What Does This Mean for Employers?

Czech companies are entering a period where careful HR administration and digitalisation will become essential.

Whether it concerns recruitment of third-country nationals through systems such as the planned EU Talent Pool, reporting obligations under the "JMHZ" system, or preparation for pay transparency audits, success will depend on transparency, compliance, and timely preparation.