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If you own a company in the Netherlands and one of your employees becomes ill, you are required to pay at least 70% of their last earned wages. You are obliged to do this for a maximum period of two years.
The amount you pay is linked to a maximum daily wage. If the amount is lower than the statutory minimum wage, you are obliged to supplement it to the minimum wage in the first year of illness. This statutory minimum wage guarantee does not apply to the second year of illness.
If you have a disabled employee who becomes ill, you can apply for a sickness benefit at the Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV). This regulation is called the no-risk policy. In this case you will continue to pay your employee's salary and offset the benefit against this.
Returning to work
You must consult with the employee about their returning to work. Within the two-year period, you have the option of temporarily discontinuing payment of wages if they do not cooperate sufficiently. Insufficient cooperation can even serve as grounds for dismissal.
Work and Income (Capacity for Work) Act (WIA)
After two years, the employee may be eligible for a benefit pursuant to the Work and Income (Capacity for Work) Act (Wet werk en inkomen naar arbeidsvermogen, WIA). You can then dissolve the employment contract. The employee can apply for a WIA benefit after one and half years. If it is absolutely evident that your employee cannot get back to work within this period, they can, after consulting you and your company doctor, apply for a WIA benefit earlier.
UWV assesses whether you and your employee have done enough to avoid a benefits claim. If not, they may reclaim the benefit from you.