Statutory sickness benefits should cover all employees, regardless of sector, firm size, type of contract and working hours. The same applies to employer-provided sick pay, should Korea ever consider introducing statutory sick pay. None of the OECD countries with a statutory sickness benefit or sick pay system excludes employees working in particular firms (e.g. small firms) or sectors. Unpaid statutory sick leave in the United States is restricted to employees in firms with at least 50 employees employed within 75 miles (about 120 km) (Table A A.1). The temporary sickness benefits for COVID-19 symptoms in the United States are also restricted to public sector employees and private sector employees working in firms with up to 500 employees, leaving an estimated 11% of private-sector employees in firms with more than 500 employees unprotected (BLS, 2019[49]; OECD, 2020[24]). Some countries, such as Belgium, France and Italy, have (slightly) different regulations and systems for the public and private sector.
Korea should ensure that employees of all firm sizes would be entitled to statutory sickness benefits. Firm size is an important dimension of labour market duality in Korea. Workers in small firms with fewer than five employees are not entitled to statutory annual paid leave, which in the current system without statutory sickness benefits acts as a key substitute for sick workers. Workers in these mini firms are exempt from employment protection legislation, except for prior notice or notice allowance. Maximum working hour legislation also does not apply. However, and partly exactly because of these special disadvantages, 18% of Koreans work in mini firms – about two-thirds higher than the OECD average. Productivity and job quality tend to be low in those mini firms (OECD, 2020[2]; OECD, 2018[1]; OECD, 2021[60]; Hijzen and Thewissen, 2020[51]). Rightly, Korea’s 2022 Pilot Project for Sickness Benefits does not exclude workers in small firms. The Pilot Plan only covers private sector employees, as public sector employees already are eligible to paid sick leave (Box 2.2). The Pilot Plan offers low sickness benefits, however, and no employer-provided sick pay – in stark contrast to the very generous sickness protection for public employees, which includes sick pay. Such differences in entitlements will reduce labour market mobility. Ideally, Korea would aim for a system that offers similar protection to all.
OECD countries with statutory sickness benefits generally grant access to temporary and part-time employees alike, although there may be certain exceptions and conditions (Panels A and B and for details Table A C.1). It is very important to grant access to both groups of employees given their size. Across OECD countries, on average, 14% of employees work part-time and 11% of employees are on temporary contracts in 2020. In Korea, the part-time employment rate is similar (15%) and the share of employees on temporary contracts (26%) is the highest in the OECD, only after Colombia.2
Minimum income requirements for eligibility may exclude certain part-time employees who work very few hours, though the requirements are low across OECD countries. Austria, Czech Republic, Germany, Ireland, Japan, Luxembourg, Norway, Slovak Republic, Spain, Sweden and the United Kingdom exclude employees with very low earnings. Whilst this may affect certain part-time workers, it will not affect many given that the minimum income thresholds are all below EUR 500 per month.3
Several OECD countries have minimum tenure restrictions that disproportionally affect employees on temporary contracts. New Zealand has the most stringent requirement: employees need six months of tenure with an employer before they can access sickness benefits. Austria demands three months of tenure, Iceland two months, Germany, and Norway one month, Greece 10 days and Denmark 240 hours within the past six months and 74 hours within the past eight weeks. In Finland, employer-provided sick pay is 50% rather than 100% of salaries for employees with less than one-month tenure.
A few OECD countries provide benefits that are more generous to employees with long tenure. Maximum benefit duration of benefit payment is longer for employees with long tenure in Austria, France, Iceland, New Zealand, and Switzerland.4 More generally, maximum sickness benefit payment durations for temporary workers may de facto also be shorter than for those on permanent contracts where benefit duration is limited by the end of the employment contract.
Many countries with social insurance systems demand minimum contribution periods. However, since employees can contribute under different employers, this does not necessarily put employees on a temporary contract at a disadvantage. The ILO sickness benefit convention requires ratifying countries to prevent depriving persons from sickness benefit by demanding long contribution periods.
Certain other groups of workers in non-standard dependent employment can be excluded from sickness benefits or employer-provided sick pay. For instance, workers in the Netherlands with a zero-hour contract (about 7% of all employees) are only eligible to paid sick leave for those hours they were called upon by their employer.5 In Australia, temporary migrant workers are not entitled to sickness benefits or paid sick leave (OECD, 2018[61]; OECD, 2019[62]; Spasova et al., 2017[63]).