a. How to Properly Document the Relationship
Employment law regulations that ensure the increased level of protection of employee´s status (such as obligatory written form of the contract and termination, obligatory written form of records stating the beginning and end of working hours etc.) do not apply to self-employed individuals / independent contractors.
Under Czech law, it is not mandatory to conclude a civil law contract with an independent contractor (most frequently mandate-type or innominate contract) in writing but in practice it is highly recommended to do so in order to prevent unnecessary litigation. If there is a service agreement with an independent contractor, it should include typical provisions of an independent contractor’s contract (see below) as well as being free of any provisions typical of an employment relationship.
The basic limitation period in the Czech Republic is three years and so it is highly recommended for individual independent contractors that are within the three year limitation period to keep the following documentation; outputs of the services provided, all invoices, documents certifying that that the independent contractor organised himself the working hours, further the declarations from the independent contractor, the contractor’s business card as well as any references on the contractor’s marketing activities etc.
b. Day-to-Day Management of the Relationship
Regarding the day-to-day management of the relationship with the independent contractor, it is crucial to observe, among others, that the independent contractor:
• provides its services, if possible, irregularly, i.e. not in precisely the same amount every week/month;
• shall be given a deadline when a concrete project must be finished rather than being obliged to follow the beginning and end of the “shirs” as determined by the client;
• shall be relatively free regarding the choice of place where the activity is carried out, i.e. has no regular workplace at the customer ́s premises;
• is entitled to remuneration, which relates to the factual provision of the services (amount, flexibility,… etc.) and may be modified with respect to outputs;
• the activity is carried out at the independent contractor’s own expense (the independent contractor has his/ her own equipment necessary for the provision of the services such as his/her own laptop, sorware, mobile phone … etc.);
• is not an integral part of an organisational chart of the client;
• the professional development is carried out at the independent contractor’s own expense and within his/her
• bears the burden of objective responsibility for damages, e.g. with regard to third parties, and is eventually insured against these risks; and
• is not regarded by third parties as clients’ employee, i.e. is distinguishable from employees of the client (e.g. does not wear clothes with the logo of the customer, does not use business cards and email addresses of the client / customer etc.).