The government will introduce a bill to double sick leave entitlements to 10 days.
Workplace Relations Minister Michael Wood said Covid-19 had shown how important it was for people to stay at home when sick.
"The Holidays (Increasing Sick Leave) Amendment Bill will mean more workers can stay at home if they're sick, and more sick leave will help support working parents.
"We know businesses benefit too when their staff stay at home when they're sick - it means bugs don't spread, leading to fewer absences and increased productivity", he said.
Wood said the bill would keep the maximum entitlement of any unused sick leave that could be carried over at 20 days annually.
He said the bill would go through a full Select Committee process, to ensure everyone could have their say on how best to implement the change.
"Currently the bill would not give all employees additional sick leave on the same day. Employees will receive their increased entitlement depending on when they started, allowing businesses time to prepare", he said.
Wood said the bill was expected to pass in mid-2021, with any changes coming into force two months later.