• Insights

Czech Republic – Temporary work incapacity of employees

Czech Republic
Written by
Randl Partners, advokátní kancelář, s.r.o. largest boutique firm focusing on HR law.
The three-day 'waiting period' during which employees are not paid for a temporary incapacity to work is abolished from 1 July 2019.

Employers will now also pay employees for the first three days of illness

An amendment to Labour Code, which cancels the so-called ‘waiting period‘, has already been published on 7 February 2019 as an Act (No. 32/2019 Coll). The date on which it comes into effect is 1 July 2019.

The repeal of the waiting period

Currently, employers pay sick employees a salary compensation for the first 14 calendar days of a temporary incapacity to work. An exception to this is the so-called ‘waiting period’, that is, the first three working days (or first 24 hours on which work was not performed), during which the employer need not pay the employee at all. Once this waiting period is repealed from 1 July 2019, employers will have to pay employees salary compensation right from the beginning of a temporary incapacity to work, even during the first three days (and from the first working hours).

Arguments for repealing the waiting period

Individuals on low incomes have complained that even three days of lost salary is too much. This means they refuse to be absent from work and do not take the time to rest and get better. Some even take paid leave for the first three days of their incapacity to work, even though paid leave is not intended for this purpose. Moreover, the Constitutional Court has expressed its negative view of the fact that the waiting period was implemented as a recourse taken against all employees, based solely on the fear of the misuse of temporary incapacity of work by a certain proportion of employees.

Arguments against repealing the waiting period

Opponents of the repeal of the waiting period primarily fear that the repeal will result in employees exploiting the waiting period. Following the removal of the waiting period, the number of employees who extend their weekend or leave by faking illness is expected to increase. Given there was a decrease in the number of employees temporarily incapable to work after the implementation of the waiting period in 2008 and 2009, the Ministry of Labour and Social Affairs predicts that this number may rise again by 25% once the waiting period is repealed.

A quicker way to check up on a sick employee: e-sick notes

At the end of November 2018, as part of its effort to streamline checks on employees who are temporarily incapacitated to work, the government submitted an amendment to the Act on Sickness Insurance to the Chamber of Deputies. The amendment is expected to come into effect from 1 July 2019.

Currently, the attending doctor must report his or her decision on temporary incapacity to work within three days after issuing it. He or she may do so electronically or in writing by post; the latter option is preferred by 96% of physicians. This means that the district social security administration often does not find out about a sick employee until a week after the physician issues the decision. Under the proposed changes, physicians would send the necessary information electronically, within one day after issuing a decision on temporary work incapacity; the government calls this process ‘e-sick notes’. The district social security administration would then, based on the employer’s request, provide the employer with all the data necessary for verifying the employee’s temporary incapacity within 8 days. In practice, the system would be automated, and the employer would be able to receive a response almost immediately. The proposed amendment would simplify the process for employers, who need to find out whether the employee’s claim about temporary incapacity to work is accurate quickly.

The level of salary compensation

The compensation to be paid out for temporary incapacity following the entry into force of the Act is the same amount currently paid out by the employer for the remaining first 14 days of sickness (i.e. after the waiting period). This is 60% of the employee’s average earnings, which is calculated in a similar way to how sickness benefit is calculated.

Decrease in insurance premiums paid by the employer

Under the Act, the employer will only pay 2.1% of the assessment base according to the Act on Social Security Premiums towards sickness leave, compared to 2.3% previously.

Michal Peškar
Michal Peškar
Partner - Czech Republic
Randl Partners, advokátní kancelář, s.r.o.