Waiting period system is to be cancelled on 1 July 2019

From 1 July 2019, employees will once again be entitled to compensation for temporary incapacity for work also for the first three days of their illness.

How does it work now and what is going to change in July?

The current system of wage compensation during incapacity for work was introduced in 2009. The compensation is paid in the first 14 calendar days of the incapacity for work (i.e. no more than 10 business days). The compensation is however not paid for the first three business days (3 business days = no more than 24 hours). The compensation is paid by the employer. Starting from the fifteenth calendar day of the illness, the employee is entitled to a sickness benefit from the Czech Social Security Administration. The compensation paid by the employer during the first 14 days of the illness is for missed shifts and for holidays during which the employee would have been entitled to a wage compensation or their full wage. The compensation is not paid for the first three business days (missed shifts) of the illness; the maximum time is 24 hours not worked. The average hourly earnings used to determine the wage compensation are calculated the same way as earnings for labour law purposes, i.e. from the previous calendar quarter. If the employee had not worked at least 21 days in the previous period, an estimate of earnings is used instead. In accordance with Act No. 32/2019 Coll. of 22 January 2019, published in Part 13 of the Collection of Laws on 7 February 2019, the waiting period will be abolished on 1 July 2019, meaning the first three days of illness will no longer be unpaid. If the temporary incapacity for work arises before the law comes into force, the compensation, wage or other income will comply with the current legislation, i.e. the waiting time system will be applied. For employers, abolition of the waiting period will mean increased costs and presumably also a higher incidence of short-term incapacity for work which may be in many cases faked. This means that employers will have to worry about substituting for missing employees more often.

Change in sickness insurance rates

On the same date, the amended Act on Social Security Insurance Premiums and Contributions to State Employment Policy will come into force, reducing the premium rate for employers. To partially compensate for the negative consequences to employers, mandatory contributions to sickness insurance paid by employers will be reduced by 0.2 percentage points. Specifically, from the current 25% of the assessment base to 24.8% of the assessment base, because the part of the premium paid to sickness insurance is reduced from 2.3% to 2.1%.

Inspections of incapacity for work

The employer may check whether the employee who has been deemed temporarily incapable of work is complying with their physician’s orders during the first 14 calendar days. Specifically, the employer may check only two things: whether the person is in their place of residence and does not exceed the allowed times for moving outside. The employer may not however check whether the employee continues with treatments, because the employer has no right to know the employee’s diagnosis. The only thing the employee’s attending physician will disclose to the employer is where the employee will stay and in which times they may go outside. You can leave all your wage-related worries to us. We can advise and help you with everything. Just get in touch.