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Article | Global News Briefs

Czech Republic: Day 1 sick leave and reduced social security contributions coming in July

Integrated Wellbeing|Gruppliv- & sjukvårdsförsäkring
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March 19, 2019

Effective July 1, 2019, Czech employers will be required to provide paid sick leave from the first day of absence rather than day four.

Employer action code: act

Effective July 1, 2019, employers will be required to provide paid sick leave from the first day of absence rather than day four, following passage of Act 32/2019 in February 2019. The elimination of the initial three-day waiting period is expected to have the greatest impact on low-income employees who are most affected by the three days of lost salary. Consequently, employees often refuse to be absent from work to recover from illness or use part of their paid annual leave to cover incapacity.

Key details

The existing rules remain in force until the July 1 effective date. The level or duration of pay replacement will remain at 60% of average covered earnings until day 14 of absence (after which payment of short-term disability benefits from social security commences).

The Act offsets some of the additional cost by reducing employer social security contributions for sickness benefits from 2.3% to 2.1% of covered pay with the same July 1 effective date. The Czech Chamber of Commerce estimates that it could increase wage costs nationally by as much as 5 billion Czech korunas per year.

Employer implications

Employers should review their policies and procedures to reflect the changes and ensure they can comply with the new sick pay schedule on July 1.