Czech Republic will hike parental leave payout

The ruling coalition agreed on increasing parental leave compensation as of 2020 but not on the level of the living wage, it became clear after a meeting was held on Monday evening (Nov 26). The lump sum provided as parental leave compensation will thus increase from CZK220,000 at present to CZK300,000 as of 2020 (a 36.4% hike). There was never disagreement that parental leave compensation should be higher, and the measure meets broad support in parliament as well, including from center-right parties, because the compensation hasn’t been updated since 2012.

We remind that in the Czech Republic, parents can choose a period up to four years during which they can receive compensation after the birth of a child. Labor ministry data show that the most frequent period ranges between two and three years. The rationale for delaying the increase to 2020 is a forthcoming EU directive, which is going to toss up the entire system for parental leave. For instance, parental leave will become available until children are 12 years old and parents will be able to work part-time and alternate between each other on taking advantage of parental leave. All this implies many more changes in the regime will need to be made, so the labor ministry itself prefers to wait for the directive before any permanent changes to parental leave compensation are made.

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