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The Czech Republic: changes in the payment of sick leave and consequences for the employer

Background
In the Czech Republic, as of 01/07/2019, employees should already be entitled to sick leave from the first day of their inability to work. The present amendment to the Labour Code is currently in the House of Representatives of the Czech Republic, but it has already won the support of the government coalition.

Current status
In the Czech Republic, the rule is that for the first three working days of the inability to work (however, a maximum of 24 hours of the already arranged shifts) the employee has no right to sick pay and therefore receives no remuneration at all. This system was introduced in 2008 as part of the savings measures during the economic crisis. The Constitutional Court has since repealed this as unconstitutional, but it was again adopted by Parliament in a modified form and has been valid since the year 2009.

For the first 14 calendar days of the inability to work (except for the first three working days), the employer pays the sick pay. From the 15th calendar day of inability to work, the employee receives the sick pay from his/her insurance company.

The previous regulation was often criticised due to the fact that it forces sick employees to work despite being ill, in order to not lose three days of wages; it was especially criticised as such employees also risk passing on infection to their colleagues. On the other hand, the believers in this regulation argued that it has statistically led to a reduction in the inability to work and the misuse of the sick fund, which means savings for the employer.

In practice, numerous companies have introduced so-called "sick days" during which the employee can stay at home for a short period of time without a reduction in wages without having to submit a certificate of inability to work.

Draft of the new legal regulation
According to the draft of the amendment to the employment law, employees should once again have the right to sick pay already from the first day of the incapacity for work, namely in the amount of 60% of the "reduced" hourly wage (the amount of the hourly wage is used as a basis for calculation of the sick pay and is reduced gradually, the higher the wage). This calculation of the sick leave is already valid.

According to the assessment by the Ministry of Occupational and Social Affairs, the change in the health insurance system means a direct increase in wage costs for the employer by CZK 2.9 billion in 2019 and possibly an additional CZK 5.1 billion in relation to the expected increase in the cases of incapacity for work. The increased costs of the employer should be compensated by the reduction of the taxes paid on health insurance, which the employer must pay, by 0.2% of the gross salary.

Author: Jan Hubálek