The Czech state appears to be pushing people towards a notorious system known as ‘švarcsystém’, where individuals work exclusively for one boss despite not having a conventional contract. Instead, they operate under a trade license. Notably, this system is illegal, and economists have reported a significant increase in the number of people involved this year.
According to the Czech Statistical Office, the number of entrepreneurs and self-employed individuals who do not employ workers increased year-on-year. In the first quarter, their number was 726.1 thousand, which is 44.2 thousand or 6.5% more than in the same period last year. Economists believe that changes in work agreements are primarily behind this trend. Some contract workers have switched to the ‘švarcsystém’, continuing to work for the same companies but with a trade license. Employers face a fine or a two-year business ban for such practices.
Economist Miroslav Novák from Akcenta points to a possible link, suggesting that trade renewal, which regularly occurs with the arrival of warm weather, could have played a role. However, he considers this impact minimal since the first quarter ended in March.
Interestingly, the rise in self-employment could result from changes in agreement contracts. According to Petra Dufka, the chief economist of Creditas Bank, this was a popular method among IT professionals who had several such contracts. Planned changes in insurance payments forced them to switch to a trade license.
Finally, the boom in parcel and delivery services has also influenced changes in employment. People are automatically placed in the position of self-employed person (OSVČ). Data from the CRIF—Czech Credit Bureau confirm this growth in self-employment, particularly in information and communication activities and construction.