If an employer receives a wage sanction (loonsanctie), continued wage payment during sickness does not stop after two years but runs on into a third year. UWV then requires the employer to keep paying wages for up to 52 weeks (one year) longer, because the reintegration efforts were considered insufficient. As a result, the cost of a wage sanction for employers quickly runs into tens of thousands of euros, and that is before the indirect burdens. This article explains exactly what those costs consist of, how to calculate them, and above all how to prevent them.
What is a wage sanction for the employer?
After 104 weeks of sickness, your employee can apply for a WIA benefit. At that point UWV reviews the reintegration file through the RIV assessment of the reintegration report. If UWV concludes that the employer did too little on recovery or return to work without a valid reason, a wage sanction follows: a mandatory extension of wage payment by up to 52 weeks.
A wage sanction is therefore not a fine in the classic sense, but an extended obligation. During that extra period a dismissal ban also applies: you cannot end the employment contract while the sanction runs. The reintegration duty continues as well, because UWV expects you to repair the shortcomings. You can read exactly what UWV checks in the article on the UWV wage sanction and the Gatekeeper Act. The rules around this assessment stem from the Gatekeeper Improvement Act.
What does a wage sanction cost? (worked example)
The largest cost item is the wage payment itself. In the third sick year you usually continue to pay at least 70 percent of the wage, unless your collective labour agreement (cao) prescribes a higher percentage. A worked example makes the scale concrete.
Suppose an employee has a gross monthly salary of 3,500 euros. At 70 percent continued payment, you keep paying roughly 2,450 euros gross per month. Over the maximum sanction period of twelve months, that adds up to around 29,400 euros in gross wage alone. If the salary is higher or your cao prescribes a higher percentage, the bill rises accordingly. This amount still excludes all the additional costs covered below.
These figures are illustrative: the actual cost of a wage sanction depends on the salary, the cao arrangements and the length of the sanction. What is clear is that a single misstep in the file can quickly mean a full year’s salary in extra charges.
Additional costs of a wage sanction
Wage payment is not the only bill. Around the salary, several items run on that significantly raise the total cost of a wage sanction for employers:
- Accrual of holiday allowance and pension. The employee keeps accruing holiday allowance over the continued wage, and the employer’s share of the pension premium also continues.
- Employer charges. Social security premiums and other employer charges remain due over the continued wage, so the real burden is higher than the gross amount alone.
- Ongoing reintegration duty. You must keep investing in support, for example in a second-track trajectory, including the costs of a reintegration agency, assessments and interventions.
- No dismissal during the sanction. Because of the dismissal ban, you cannot end the employment contract while the wage sanction runs, even if return is unlikely.
- Delayed WIA inflow. The WIA assessment is postponed, so the financial settlement also takes longer to arrive.
Added together, these additional costs of a wage sanction often exceed the bare wage sum. A sanction therefore hits not only the cash position, but also planning and staffing.
How do you prevent the costs of a wage sanction?
The best way to avoid the costs of a wage sanction is a timely, well-substantiated reintegration trajectory. UWV expects you to switch as soon as it is clear that return to your own or adapted work is not feasible. Wait too long and a timely start of second-track reintegration often can no longer be repaired in time, which is exactly where sanctions originate.
Equally important is the quality of your file. UWV does not test whether reintegration succeeded, but whether you demonstrably did everything reasonable. So make sure you have a UWV-proof reintegration file in which every step is traceable: problem analysis, plan of action, evaluations and adjustments. A consistent file with substantiated choices is the most effective insurance against a wage sanction and the associated costs.
More information at the UWV
The official rules and current amounts or deadlines are available at UWV about the assessment of the reintegration report. These can change, so always check them at the source itself for a concrete situation.
Received a wage sanction? How to limit the costs
If UWV has imposed a wage sanction, the damage is not yet set in stone. Start by translating the exact reason for the sanction into concrete corrective actions. If UWV blames a late or thin track 2 effort, the trajectory must demonstrably intensify. If it concerns missing substantiation, you add it after the fact.
Once you have demonstrably repaired the shortcoming, you can ask UWV to shorten the wage sanction. Fix the error quickly and properly and you will not have to pay out the full 52 weeks, which limits the costs. Speed and file quality make the difference here: the sooner the repair is demonstrable, the shorter the sanction and the lower the bill. A well-organised second-track trajectory helps you carry out those corrective actions in a professional and defensible way.
For employers: a timely, UWV-proof trajectory prevents these costs in the first place. Care4Careers runs the complete second-track reintegration for employers, from file build-up to UWV-proof reporting and placement. That keeps you in control and prevents a wage sanction from costing you an expensive third sick year.