Some groups of employees have a vulnerable position on the labor market, for example because they are more likely to get sick. In order to avoid the situation where employers refrain from hiring such groups because they argue the financial risk is too large, the safety net of the ‘Ziektewet’ (Sickness Benefits Act) has been created. This safety net provides a monthly benefit to these groups of employees in the event of sickness, thereby relieving employers financially when they have to continue paying wages during sick leave.
When an employee is on long-term sick leave, your organization must continue the payment of wages to the employee for 104 weeks. The Sickness Benefits Act can give employers some financial relief here, by providing a benefit to the sick employee through the UWV (the Institute for Employees’ Insurance and Regulations).
A sickness benefit as regulated by the Sickness Benefits Act can be requested for the following employees:
- employees who are unable to work due to pregnancy or childbirth before and after having received maternity leave (during this leave, the UWV will pay a benefit to the employees in question on the basis of the ‘Wet arbeid en zorg’ (Work and Care Act), abbreviated as WAZO);
- employees who are unable to work as a result of organ donation;
- employees who are unable to work and whose employment (i.e. contract) will end during sick leave;
- employees previously unable to work who have re-entered the labor market and fall under a no-risk insurance policy (‘no-risk polis’ in Dutch);
- older, previously unemployed employees who will be on sick leave for at least 13 weeks – the so-called ‘compensatieregeling’ (compensation scheme for disadvantaged employees);
- employees on a non-regular employment contract (such as interns and homeworkers), called ‘fictieve dienstbetrekking’ in Dutch.
Ex-employees who get sick within four weeks after they left employment and who have not yet found a new job or successfully applied for an unemployment benefit can also apply for a sickness benefit (themselves). This can be regarded the aftereffect of the obligation for employers to have their employees insured.
There are two special situations. First, a work disabled employee can fall under the so-called no-risk insurance policy during sick leave regardless of whether the reason for leave is related to his/her illness or handicap. The no-risk policy is usually in effect for the first five years of employment. However, for employees receiving benefits through the ‘Wet Wajong’ (Young Disabled Persons Act) the no-risk policy is in effect for the entire duration of employment. Second, the UWV will sometimes pay a sickness benefit to older, previously unemployed employees who are on sick leave due to a long-term illness. As mentioned above, this is called the ‘compensatieregeling’ (compensation scheme for disadvantaged employees). To be eligible, the older employee must have entered into employment with your organization between January 1, 2018 and January 1, 2020 and must have been born before January 1, 1962. Furthermore, the employee in question must have previously received an unemployment benefit on the basis of the ‘Werkloosheidswet’ (Unemployment Act) for over 52 weeks before entering into employment with your organization and on the first day of sick leave (s)he had not been working for your organization for more than five years.
The duration of sickness benefits is equal to the period in which an employer must continue the payment of wages in the event of long-term sick leave: 104 weeks at most. After this period, the employee in question can apply to the UWV for a WIA benefit, a benefit regulated by the ‘Wet werk en inkomen naar arbeidsvermogen’ (Work and Income According to Labor Capacity Act), abbreviated as ‘WIA’. Sick or work disabled employees who are eligible for a state pension will only receive a sickness benefit for 13 weeks at most (and as of April 1, probably six weeks at most). Sometimes, the UWV will add multiple different periods of sick leave together to determine the duration of benefits, in order to check whether or not the maximum of 104 weeks has already been reached. This happens if the time between two periods of sick leave is less than four weeks or if it concerns a pregnant woman whose illness before and after a period of having received maternity leave benefits has the same cause. If the time between two periods of sick leave is more than four weeks or if the cause of illness after a period of having received maternity leave benefits is different, the duration of sickness benefits is renewed (i.e. different periods of sick leave are not added together).
Taking care of employees unable to work yourself
As employer, you have the option to pay lower or no employer’s contributions at all for the ‘Ziektewet’ (Sickness Benefits Act). In that case, you will become self-insured for sickness benefits. The ‘Belastingdienst’ (Dutch Revenue Service) must give its consent for this self-insurance. In most cases, self-insurance will initially prove to be financially advantageous. You yourself are now responsible for sickness benefits. Once the UWV has paid the benefits to ill employees, you must pay back the amount given in benefits to the UWV. Alternatively, you can also opt to pay sickness benefits directly to employees yourself, without the UWV as intermediary. Furthermore, you must also take care of absenteeism management and reintegration. You must be assisted by a certified ‘arbodienst’ (Health and Safety Service) or registered occupational health physician and record any agreements made in writing. As self-insured for the Sickness Benefits Act, you bear the costs for this yourself. Moreover, an absenteeism register must be kept and all employees calling in sick and returning to work must be reported to the UWV. The duration of sickness benefits is two years at most. If an ill employee applies for a WIA benefit after those two years, the UWV will check if you – the employer – has put in enough effort for reintegration. If not, the UWV can decide that you must continue to pay sickness benefits to the ill employee for a longer period of time. As self-insured for the Sickness Benefits Act, you can call in the help of a (private) insurance company to pay the continued sickness benefits. For this, you will then pay extra (insurance) premiums.
Twice a year – on January 1 and July 1 – you can opt to become self-insured for the Sickness Benefits Act or to cancel your self-insurance. The application for self-insurance (or cancellation thereof) must be filed to the ‘Belastingdienst’ 13 weeks before the start (or end) date. The next deadline is therefore March 31, 2021. In your application, you must include the agreements made pertaining to absenteeism management. You can also use the model document ‘Arboverklaring eigenrisicodragerschaps ZW’ (Declaration of Self-Insurance for the Sickness Benefits Act) published by the ‘Belastingdienst’.
Maximum daily wages
The height of the sickness benefit depends on the (maximum) daily wages of the employee in question. Twice a year, the maximum daily wages are set. For the first half of 2021, it equals € 223,40. An employee unable to work will be paid a benefit equal to a percentage of this amount depending on the situation:
- if the employee is unable to work due to pregnancy or childbirth before and after having received maternity leave or due to organ donation, the employee will be paid a benefit equal to 100% the maximum daily wages;
- employees who are unable to work and whose employment (i.e. contract) will end during sick leave, employees on a non-regular employment contract (such as interns and homeworkers) and/or ex-employees receiving a sickness benefit as a result of the aforementioned aftereffect will be paid a benefit of at least 70% the daily wages;
- if the employee falls under the no-risk insurance policy and/or is eligible for the aforementioned compensation scheme, (s)he will receive a benefit of between 70% and 100% the maximum daily wages during the first year of sick leave. In the second year of sick leave, the benefit will equal 70% the maximum daily wages.
The sickness benefit paid by the UWV will include vacation allowance. If an ill employee is eligible for a benefit on the basis of the Sickness Benefits Act, you must apply to the UWV in time. If not, your organization may be imposed a fine of max. € 455.
The moment on which you must apply to the UWV for a sickness benefit for an ill employee depends on the situation:
- for employees who are unable to work due to pregnancy or childbirth (in some situation both before and after maternity leave): at the latest on the fourth day of sick leave;
- for employees who are unable to work due to pregnancy (before maternity leave): within six weeks after the first day of sick leave;
- for employees whose employment (i.e. contract) ends during sick leave: on the last day of employment;
- for employees previously unable to work who have re-entered the labor market and fall under the no-risk insurance policy: within six weeks after the first day of six leave;
- for employees who are eligible for the compensation scheme: within four days after a 13 week sick leave;
- for employees on a non-regular employment contract: at the latest on the fourth day of sick leave;
- for employees eligible for a state pension: at the latest on the second day after the employee called in sick;
In the case of a temporary worker on sick leave, the employment agency must apply to the UWV for a sickness benefit at the latest on the fourth day of sick leave. However, this is only necessary if there is an agency clause in the temporary worker’s contact, which makes him/her subject to the Sickness Benefits Act.
Applications filed too early may not be processed by the UWV at all. Applying for a sickness benefit can be done through the online ‘verzuimmelder’, an digital application located in the ‘werkgeversportaal’ (employer’s portal) on the UWV’s website. You must use the online authentication and authorization system ‘eHerkenning’ to log in. Alternatively, you can use ‘Digipoort’. The latter will allow you to connect your own payroll administration to the systems of the UWV.