Amendment to the Labour Code - abolition of the waiting period

An amendment to the Labour Code will abolish, from 1 July 2019, what is known as the “waiting period” for employees in an employment relationship and for employees working on the basis of work agreements outside an employment relationship. This waiting period is the first three days of temporary incapacity to work, during which a sick employee is not entitled to compensation for wages.

Beginning 1 July, employers must pay employees compensation for wages or remuneration from the agreement of 60 % of average earnings as of the first day of incapacity to work.

In consequence of this, there will also be changes to the legal regulation of calculating compensation for wages for the duration of incapacity to work, by returning legal regulation to the way it was before the introduction of the waiting period.

As “compensation” for employers whose HR costs will rise with the abolition of the waiting period, there will be a reduction in the size of the premium on sickness insurance of 0.2 percentage points from the current 2.3 percent to 2.1 percent. The payment that employers must make for social security will therefore fall from today’s 25 percent to 24.8 percent.

Transitional provisions thereafter stipulate that compensation for wages, or compensation for loss of earnings, at a time of temporary incapacity that arose prior to the effect of this act and continues after its effect is governed according to existing legal regulations.

There will also be changes to other associated acts, for example to the Act on Income Tax and the Act on Retirement Insurance (references to the waiting period shall be omitted).