Contractor, employee or agency worker?

For an IT role in Czechia there are three main options: an employment contract, working with a self-employed contractor on a trade licence (invoicing under their own business ID, the IČO), and agency employment. Each suits a different situation and each has its own rules. This article is based on the Labour Code and the Employment Act as worded on 31 October 2026.

How do the three forms differ at a glance?

	Employee	Contractor (self-employed)	Agency worker
Who is the employer	your company	nobody, the contractor runs their own business	the employment agency
Who directs the work	you	the contractor, according to the agreed brief	you, for the duration of the assignment
How long	usually long term	for the agreed scope or period	temporarily, no more than 12 consecutive months at the same user company, with some exceptions
Who pays wages and contributions	you	the contractor pays their own; you pay an invoice	the agency
What to watch out for	length and cost of recruitment	the arrangement must not have the features of dependent work	the agency's licence and comparable conditions

Sources: Labour Code, Act No. 262/2006 Coll. (in Czech), Employment Act, Act No. 435/2004 Coll. (in Czech)

When does an employee make sense?

An employment contract is the natural choice for roles the company needs long term and that should be part of its team: development leadership, key developers, running its own systems. An employee works under your instructions, during your working hours and in your name. The know-how stays in the company.

The drawback is the time and cost of recruitment. Finding an experienced specialist can take longer than a project can wait. If you need someone for only a few months of a project, another form may be more practical.

When does a contractor make sense?

A contractor is a self-employed professional who delivers work to an agreed brief. This suits defined work that needs specific expertise: architecture design, a migration, an integration, or strengthening a team in a particular technology.

Here the Labour Code draws an important line. Under Section 2(1), dependent work has four features: a relationship of superiority and subordination, work performed in the employer's name, according to the employer's instructions, and in person. Under Section 3, dependent work may only be performed in a basic employment relationship, meaning an employment contract or an agreement to complete a job or to perform work.

So if a contractor in fact works as your employee, under your instructions, during your working hours and under your management, it may be what Czech practice calls švarcsystém, disguised employment through self-employment. The Employment Act classifies such work as illegal work (Section 5(e)(1)). A company that enables it faces a fine from CZK 50,000 up to CZK 10,000,000 (Section 140(4)(f)), and the individual doing the work faces up to CZK 100,000 (Section 139(3)(c)). These offences are dealt with by the State Labour Inspection Office and the regional labour inspectorates (Section 141(2)).

In practice, a contractor should have a brief and be responsible for their output, not receive daily instructions like an employee. In any specific case it is the actual working arrangement that is assessed, not the name of the contract.

Sources: Labour Code, Act No. 262/2006 Coll. (in Czech), Employment Act, Act No. 435/2004 Coll. (in Czech)

When does agency employment make sense?

Agency employment sits between the two previous forms. The worker is employed by an employment agency and temporarily assigned to you (Labour Code, Section 307a). During the assignment you give them tasks, direct their work and are responsible for health and safety at work (Section 309(1)). The agency handles wages, the contract and the employment paperwork.

It suits situations where you need someone in your team and want to manage them yourself, but only for a limited time: cover for a long-term absence, a project with a clear end, or a temporary rise in workload.

The law sets several rules worth knowing:

Licence. Only an employment agency licensed by the Ministry of Labour and Social Affairs may provide agency employment (Employment Act, Sections 14 and 60). You can check whether an agency holds a licence in the public MPSV register (linked in the list of sources).
Written temporary assignment agreement. The agency concludes it with you, and it must include, among other things, the type of work, the duration of the assignment, the place of work and the working and pay conditions of a comparable employee at your company (Section 308).
Comparable conditions. The working and pay conditions of the assigned worker must not be worse than those of your comparable employee (Section 309(5)). That is why the agency needs to know your conditions before the agreement is concluded.
Length of assignment. The same worker cannot be assigned to the same user company for more than 12 consecutive calendar months, except when the worker asks for it or when the assignment covers maternity, paternity or parental leave (Section 309(6)).

We describe agency employment in more detail in the article Agency employment in IT: how it works and what the law requires.

Watch out for the opposite situation too. Under the Employment Act, hiring out workers outside the regime of a licensed employment agency is disguised employment mediation (Section 5(g)). A fine of up to CZK 10,000,000 applies to the party hiring out the workers and also to the company that allows it (Section 140(1)(f) and (4)(f)).

Sources: Labour Code, Act No. 262/2006 Coll. (in Czech), Employment Act, Act No. 435/2004 Coll. (in Czech), Ministry of Labour and Social Affairs, Employment agency search (in Czech)

How do you decide?

Three questions help:

How long do you need the person? Permanently: more likely an employee. For a few months: more likely a contractor or an agency worker.
Who will direct the work? If you want to assign and direct the work every day, an employee or an agency worker fits. If a brief and acceptance of the output are enough, a contractor fits.
Do you need an individual or a result? If you need a finished piece of work rather than a filled role, consider project delivery. We explain the difference in the article IT project delivery or hourly capacity?.

Summary

An employee is for long-term roles you manage yourself. A contractor is for defined work with a brief and responsibility for the output. An agency worker is for a temporary boost to a team you manage.
With a contractor, make sure the arrangement does not have the features of dependent work under Section 2 of the Labour Code. The actual arrangement counts, not the name of the contract.
With agency employment, check the agency's licence in the MPSV register and plan for comparable conditions and the 12-month limit at the same user company.

AZ EXPERTUM offers all three routes: contracting of specialists and teams, agency employment (we hold a licence for agency employment) and IT recruitment for permanent employment. If you are unsure which form fits, write to us about what you need. We will suggest a form based on the role and the length of the engagement.

This article is general information based on legislation as worded on 31 October 2026, not legal advice. Have a specific arrangement reviewed by a lawyer.