Czech Republic: A Compliance Overview

In the Czech business environment, compliance is a significant element of business conduct for organisations striving for sustainable success, resilience and strong ethical values. The regulatory landscape is subject to heightened governmental scrutiny, upcoming EU legal regulation, employee input, and customers who demand a values-driven business culture. The general public is sensitive to businesses becoming embroiled in corruption, data breaches and discrimination, which often leads to negative media coverage or enforcement from government bodies. This article summarises key compliance areas in the Czech Republic, focusing on:

• whistleblowing legislation;
• criminal liability of legal entities, including investigation;
• the gender pay gap, equality and anti-discrimination measures; and
• General Data Protection Regulation (GDPR) enforcement.

Ethical Compliance

Organisations in the Czech Republic face challenges in the compliance landscape, including integrating compliance functions into overall corporate strategy and fostering a culture that prioritises ethical conduct. While the cost of non-compliance – both financial and reputational – is rising, so, too, are the costs related to operating compliance teams. To address challenges effectively, companies are adopting training initiatives that cover all employees to ensure overall compliance improves and compliance teams are not overburdened. This includes implementing AI and digital solutions for compliance management systems, from compliance AI assistants and chatbots to automated, AI-powered monitoring tools, which are extremely effective thanks to the very high level of digitalisation introduced to companies in recent years.

Such systems usually incorporate robust monitoring and reporting capabilities, complemented by ongoing training and education of all levels of employees. While adopting advanced technologies, including detailed analytics and AI, it is equally important to communicate value-driven business concepts and promote a trust and enterprise mindset among the workforce.

Whistleblowing Legislation and Enforcement

The Czech Republic has implemented the EU Directive on Whistleblowing, which mandates that entities with 50 or more employees must establish internal reporting systems and designate impartial individuals to handle reports. The primary objective is to protect individuals who report unlawful conduct from those who might retaliate, thereby fostering a culture of integrity within organisations.

The legislation provides very strong protection against retaliation in the broadest sense – from harsher treatment at work to termination – and this protection could even extend to people associated with the whistleblowers.

For confidentiality and continuity purposes, legal entities have often outsourced whistleblowing officer functions to specialised persons to maintain confidentiality across the internal organisation. When appointing the whistleblowing officer internally, it is highly recommended to appoint at least two individuals to ensure operational capacity without interruption, as there are mandatory deadlines that must be met and sanctions may apply to the appointed individuals if they are not.

Criminal Liability of Legal Entities

With the year-on-year increase in the number of legal entities being prosecuted in the Czech Republic, criminal liability is proving to be an important legal tool to increase corporate accountability. Under Act No 418/2011 Coll., on the Criminal Liability of Legal Entities, companies can be held criminally liable for offences committed by their representatives, employees, or even third parties acting on their behalf if the conduct benefits or is intended to benefit the entity. The scope of criminal offences includes corruption, tax evasion, money laundering, fraud, environmental crimes, and cybercrimes.

Investigations typically involve specialised units of the Czech Police, including the National Centre against Organised Crime (NCOZ), which cooperate closely with public prosecutors specialising in corporate criminal liability. Recent high-profile cases underline the severity of potential consequences. For example, in 2025, the police began investigating corruption at one of the largest state hospitals and at one of the major healthcare payers (a state health insurance company). Generally, public procurement criminal compliance is the key focus of authorities.

Under the Act on Criminal Liability of Legal Entities, entities can be exempted from criminal liability if they can demonstrate that they have established robust compliance programmes with clear internal policies, regular risk assessments, internal audits, and training programmes tailored to specific risks. The main challenge in criminal proceedings is demonstrating that the compliance programme was not only established “on paper”, but also implemented to reflect the practical realities of the company’s business environment.

GDPR Compliance

Data protection remains a critical compliance area in the Czech Republic, governed by the GDPR and the national Personal Data Processing Act, with the Office for Personal Data Protection (UOOU) as the authority responsible for enforcing data-protection regulations.

The UOOU has demonstrated over time its commitment to enforcing GDPR compliance through significant measures. In 2024, it imposed a substantial fine of approximately EUR13.9 million (CZK351 million) on a prominent cybersecurity company. In 2025, it focused on:

• marketing programs, especially in retail, and conditioning marketing consent upon the provision of discounts;
• marketing communication to the general public (spam regulation) and compliance with GDPR legal titles and processing conditions; and
• pay-or-consent practices of various online businesses.

Gender Pay Gap, Equality, and Anti-Discrimination Measures

Gender equality and addressing the gender pay gap are pressing issues in the Czech Republic. Despite legislative efforts, disparities persist. The Czech government has acknowledged these challenges and published a Gender Pay Gap Action Plan for 2023–2026. This comprehensive plan aims to address existing gender pay gaps and signifies a commitment to tackling the issue.

In alignment with the European Union’s directive on pay transparency, the Czech Ministry of Labour and Social Affairs is drafting legislation to enhance transparency in remuneration. The Czech Republic has yet to implement these measures, which will require companies to provide average earnings broken down by gender for the same or comparable job roles. This initiative aims to reduce pay disparities and promote equality in the workplace.

The legal risks remain high, particularly in business undertakings, where disparities are ignored and it is unable to prove that discrimination did not take place – the obligation to prove that the discrimination did not exist is the responsibility of the employers. Based on currently available data from the Czech Labour Inspection, in 2024, the Czech authorities conducted 157 inspections and imposed 93 fines for discriminatory treatment and discriminatory remuneration. Additionally, some of these cases resulted in court disputes in which the individual claimed discrimination and sought compensation.