Czech sole proprietors are among Europe’s elite, at least in terms of working hours.
They work in average 2,300 hours a year, which makes them some of the most hardworking self-employed people in the EU.
Europe’s most workaholic sole proprietors are found in Austria and Germany. Austria’s self-employed work 2550 hours a year. Czechs are the fifth.
In addition, the Czech Republic has one of the smallest differences between the working hours of employees and sole proprietors.
According to the EU data, Czech employees work 1936 hours a year, which is the fifth largest number for all the EU. The only EU member state where employees work more hours than sole proprietors is Romania.
The Schwarz system
Thanks to a so-called “Schwarz system”, the Czech Republic is Europe’s entrepreneurial superpower.
The Schwarz system refers to a widespread practice of employers hiring their workers not as employees, but rather as independent contractors in order to avoid paying social security tax.
This means that tens of thousands of workers are forced to become “entrepreneurs”, because the companies they work for refuse to hire them as employees.
The number of entrepreneurs in the Czech Republic rose 59,767 last year, to the total number of 2.29 million.
The number has been growing for four years, since the start of the global crisis in 2008.
On 1 January 2012, a new law came into force that further limits the practice. Before, the Schwarz system had been formally banned, but a loose interpretation of the law permitted it nonetheless.
Czech companies can be fined as much as CZK 10mil for implementing the Schwarz system. The lowest possible fine is CZK 250,000.