Work capacity reform stage two: old sick leave system to go

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Think-tank Praxis suggests people might work while on sick leave. Also, analysts say employees might think about compensation stretched from five days to 30. 

Analysts advise that as obligations on employees grow, social tax should be lowered and benefits offered for covering health costs.

Though people with colds or slightly sick should officially not work they often still do. Therefore, they take no sick leave at all resulting in stretched out sickness; or else they take the leave but to work anyway while not paid. At any rate, falling ill for weeks spells significant financial loss, to say nothing of long-term illness potentially costing people their jobs.

Currently, for the initial three days sock an employee will get no compensation or remuneration at all. For the following five days, the employer pays partial fee of 70 percent from salary, and from there the health insurance fund for four months.

Praxis the think-tank, in its fresh analysis, finds the system to be stiff, unfavourable for people economically and physically, costly for the state, while employee’s obligations are minimal.

The analysis is part of preparation for next step in work capacity reform to follow the part one which begins in July.

The first part touches the handicapped, but part two will reach those who get sick.

-First sick day unpaid

Praxis analyst and an author of the study Vootele Veldre promotes flexibility – offering the opportunity to work while sick if allowed by doctor and feasible regarding the nature of the work. He added that while «currently people earn 70 percent of the salary beginning day four, why not consider people earning 50 percent of salary for working half time, and 70 percent compensation from the remaining 50 percent – instead of the current 70 percent, he’d earn 85 percent of salary,» suggested Mr Veldre while pointing to example in several Scandinavian nations.  

The analysts underline doctor’s permission for part-time working while sick, as otherwise employers might start forcing upon people.

«Estonia may have a six digit amount of jobs where people can answer emails, read texts, talk over the phone,» said Mr Veldre.

-Employer to pay for 30 days

According to senior Praxis analyst responsible for the study, Märt Masso, increased employer obligations might lead to them to prefer healthy people when hiring staff. on the other hand, the fear may not materialize considering the current economic environment and the labour force shortage. 

Mr Masso said employers would need to be motivated to keep hiring people in case of weaker health as obligations rise. For that, the cure would be calculated compensations of social tax, as well as a prolonged period during which insurance gets covered. For the latter, 30 calendar days is suggested.   

Mr Veldre underlined the need for discussions as simplifications may lead to people with financial burdens keeping on working while sick.

Comments and ideas

Health and work minister Jevgeni Ossinovski suggests transferring sick compensations from health insurance fund to unemployment benefit fund, while favouring work while sick if feasible – like at home in the computer.

Employers Confederation head Toomas Tamsar agrees the current system needs to be replaced, but stresses that additional obligations on employers need to come with substantially lowered social taxes, as well as benefits to entrepreneurs who invest in health of the staff.

«We totally agree that the current system has resulted in people working as sick en masse which in turn leads to colleagues getting infected and damaging own health. Thus, it makes sense to consider changes. Meanwhile, the system has an obvious limitation: money. As the purse is not inexhaustible, it should come at the expense of others including other employees,» said Mr Tamsar.

With genuine results desired in improvement of employee health, «the first thing is to stop penalising such employers as really invest in it, compensating costs of sports, massage etc. Today, these come not under business cost and are thus extra taxed as fringe benefits,» he explained while approving the idea to allow part-time work during sick leave.

Trade union federation head Peep Peterson said the Praxis study is great support in demanding compensation for initial sick days. Meanwhile, he doubted the merits of transferring compensations to unemployment insurance fund – the surplus therein the trade unionists have desired to channel into preventive training and retraining of risk groups.

Mr Peterson approves allowing partial work while sick, but cautions against misuse by employers.