Sick pay

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.

No-risk policy

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.

Prinsjesdag (Budget Day) 2019 announcement

On Prinsjesdag (Budget Day) 2019, the government announced a raft of measures is to be introduced to make dealing with the absenteeism of sick employees cheaper and easier for small and medium-sized businesses. These measures include introducing one-stop SME absenteeism insurance to support your reintegration obligations towards sick employees and changes in the role of company doctors:

• This insurance acts as a safety net to alleviate the financial risks and helps you, as an employer, meet your financial obligations and administrative requirements when an employee goes on sick leave.
• The €450-million set aside for reimbursement towards the costs of paying wages during sick leave will mainly benefit small businesses. This insurance scheme is due to be introduced on 1 January 2020.
• The company doctor’s medical advice will play a leading role in determining whether enough is being done to reintegrate an employee. On the basis of the doctor’s recommendation, you can set up a reintegration programme with your employee. This measure is due to be introduced on 1 January 2021.

The introduction of these changes are subject to their acceptance by the upper and lower houses of parliament.