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Employee sickness now more costly for employers in the Czech Republic

The three-day waiting period for sick leave compensation has been abolished as of 1 July 2019, and ailing employees thus receive payments from the first day of sickness.

Starting 1 July 2019, incapacitated employees again receive continued pay also during the first three days of their sick leave. Such payments will be made provided that the employee met the criteria for claiming sickness benefits (within the meaning of sickness insurance provisions) on the day on which they became incapacitated (or, as the case may be, were quarantined).

The three-day waiting period, which was put into place ten years ago, and which meant that employees received no compensation for forfeited pay during the first three days of work incapacity, has thus been abolished. During the first three days of sick leave, employees are now paid 60% of their average income out of the employer’s pocket.

In order to compensate employers for this additional burden, the employer’s contribution to sickness insurance has been cut by 0.2%, bringing down the super gross wage from 34% to 33.8%.

Starting 1 July 2019, the following rates for social insurance contributions apply:

a) on the part of the employer: 24.8% (up until 30 June 2019: 25%) of the assessment base, of which 2.1% (up until 30 June 2019: 2.3%) sickness insurance, 21.5% pension insurance, and 1.2% contribution to the state employment policy,

b) on the part of the employee: 6.5% of the assessment base,

c) self-employed businesspersons: 29.2% of the assessment base within the meaning of Sec. 5b (1) and (2) of Act No. 589/1992, of which 28% pension insurance and 1.2% contribution to the state employment policy, and in addition 2.1% (up until 30 June 2019: 2.3%) of the assessment base within the meaning of Sec. 5b (3) of Act No. 589/1992, if the self-employed person participates in the sickness insurance scheme,

d) voluntary participants in the pension insurance scheme: 28% of the assessment base,

e) foreign employees: 2.1% (up until 30 June 2019: 2.3%) of the assessment base.

Source:
Amendment to the Labor Code