Facultative compensation

Epitomizes a huge advantage for companies with a staff exceeding 25.

The effective wording of the Employment Act No. 435/2004 Coll., and of the executive regulation No. 518/2004 Coll., obligate any and all employers – including state institutions and budged organizations – to employ citizens with limited work capability (hereinafter only LWC individuals) within the amount of mandatory share. In case of an employer with a staff exceeding 25, the mandatory share equals 4 % of the total staff number.

The abovementioned mandatory share may be met – pursuant to Section 81 – in 3 ways:

a) Through employing citizens as per the mandatory share
b) through payments made to the state budget
c) through withdrawing products, goods and services from an employer employing more than 50 % of LWC staff.

Item a) is an ideal situation, wished for by the law
Item b) means payments of c. 45 000 CZK per one non-employed LWC member of staff (i.e. a 2,5 multiple of an average monthly salary earned in the state sector, as announced for Quarters I to Quarter III of the pertinent year).
Item c) means withdrawing services or goods from Vladimír Lederer company worth approximately 126 000 CZK, V.A.T. not included; that is c compensation of giving a job to one LWC member of staff (i.e. a septuple of the average monthly salary paid over Quarters I to III of the respective year).

Vladimír Lederer company is an employer employing 100% of LWC staff, and is – by virtue of law – eligible to provide its customers with a Declaration of word of honour on the so-called facultative compensation which replaces the obligation to employ LWC citizens. The said Declaration will be – upon request – mailed to all customers upon the end of the year.