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Czechia

6 December 2018

Czechia: amendments to the Labour Code guarantee compensation during sick leave

The parliament approved a change of the mandatory sickness insurance system that is enshrined in the Labour Code. The amendment abolishes a three-day waiting period before sickness compensation is paid. In the summer of 2018, a new benefit on long-term sick leave and the right to return to the office after a period of caretaking were approved. Employers have argued against both measures and complain they will increase labour costs.

The members of parliament have voted in favour of an amendment to the Labour Code that will guarantee workers wage compensation for the entire duration of sick leave. The Labour Code (Act No. 262/2006 Coll., as amended by Act No. 585/2006 Coll.) is the fundamental regulation in the area of labour law, with a section on sick leave that refers to the application of the Sickness Insurance Act (187/2006 Coll.) if an employee is unfit for work (i.e. on sickness leave) for a period longer than three days. In principle, sickness insurance is paid to provide for situations when a worker is temporarily incapable of work. In the four situations, a worker receives benefits: sickness benefits; assistance in taking care of a family member; compensation benefits during pregnancy and maternity; and monetary aid during maternity. The current sickness regulation applies a three-day waiting period when no compensation has to be paid. The abolition of this waiting period is handed over to the Senate, and has later to be approved by the country’s presidency. The intention is that it will come into effect from 1 July 2019.

The current legislation providing for the first three days of unpaid sick leave has been controversial since its inception in 2008. After the three days, they receive 60% of their salary for additional time missed. From July 2019, the new law guarantees workers the right to receive 60% of their salary from the first day of sick leave.

Already in June 2018, the Sickness Insurance Act was amended with a new benefit - the long-term care benefit. The purpose was to provide persons with healthcare insurance with adequate compensation for the loss of income from employment, which had to be interrupted due to long-term care for a relative. The employer of a caring person has to accept the absence of an employee at work during the period of long-term care (maximum of 90 days) and is obliged to provide the same job upon return of the employee.

Employer’s organisations have protested against both plans with the argument that the changes will increase the cost of labour. The Confederation of Industry estimated that the measure will cost employers 8 billion CZK annually. However, the costs are not borne entirely by the employer, with an estimated 3.5 billion CZK that will be reallocated in the state’s budget.

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