This master thesis examines the regulation of compensation for temporary work incapacity due to illness or injury in Slovenia and Luxembourg, as an essential component of social security systems. The purpose of the research is a comparative analysis of the legal, financial, administrative, and supervisory aspects of both systems and their impact on employment relations and the stability of social protection. The theoretical part presents the institutional framework of both countries, based on a review of legislation, including the rights and obligations of employers and employees, mechanisms for preventing abuse, and issues of personal data protection. The empirical part is based on qualitative research through interviews with HR representatives and management from both countries, highlighting practical experiences and challenges in implementing these systems. The findings reveal key differences in the financing, duration, and amount of compensation, as well as in the scope of employee protection. The Slovenian system appears to be more focused on ensuring workers’ social security, while the Luxembourgish model distributes the financial burden more evenly between employers and the state. In Slovenia, the main challenges remain the high financial burden on employers for short-term absences and inefficient control procedures, while the Luxembourgish system is marked by administratively complex absence management that lacks alignment with modern digital practices, alongside a strong perception of supervisory strictness among employees.
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