Salary Insurance For Employee Illness

Author:Dr. Thomas Rihm
Profession:Rihm Attorneys


If employees become ill through no fault of their own and are therefore unable to work, they are still entitled to a wage. Employers' obligation to continue to pay wages is governed by Article 324a of the Code of Obligations. Employers may release themselves from this obligation if they offer employees health insurance for a daily allowance. The Federal Supreme Court has formulated the requirements for employee health insurance. Protection for covered employees begins earlier and lasts considerably longer in the case of long absences due to illness than employers' obligation to continue to pay wages.

Duration of employment counts

According to Article 324a of the Code of Obligations, employers' obligation to continue to pay wages does not arise until the start of the fourth month of employment, unless the employment relationship has existed for more than three months. This is the case for fixed-term employment relationships. Permanent employment relationships fulfil this requirement if they cannot be terminated until after the end of the third month of employment. The obligation to continue to pay wages is also limited in time. In the first year of employment, it is three weeks, after which it is longer dependent on the length of employment. Court practice has developed scales for this purpose.

According to all scales, employers' payment obligation increases to five to six months in the 20th year of employment. During this period, sick employees are entitled to wages as if they were working. Employers can release themselves from this payment obligation if certain formal and material conditions are fulfilled. The required agreement must be made in writing or included in a normal or collective labour agreement. In addition, a regulation deviating from Article 324a of the Code of Obligations must be at least equivalent for the employee. Equivalence is given in the case of (collective) daily sickness benefit insurance taken out by the employer for an employee if, in the event of the employee's incapacity to work, the insurance provides for daily benefits of 80% of the salary for 720 days within 900 consecutive days after a waiting period of a maximum of three days. In addition, employers must pay at least half of the insurance premium. Further, employees must have a direct right of claim against the insurer.

Contract clause is decisive

During a permissible waiting period of up to three days, an employee receives neither wages nor a...

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