Continued pay during sickness by the employer, how it works

When your employee falls ill, you as the employer continue to pay their wages for a maximum of two years. In most cases that means at least 70% of the wage, and in the first year at least the minimum wage. You must also work together with your employee towards a return to work, known as reintegration. This article explains in plain language whom you do and do not have to pay, how much and for how long, and what happens in special situations such as an on-call worker or an employee who has reached state pension age.

Whom do you have to pay?

You continue to pay wages during illness to everyone with an employment contract. That means:

• employees on a permanent contract
• employees on a fixed-term contract
• on-call employees with an employment contract

The type of contract does not change the duty itself: as long as there is an employment relationship and the employee is ill, continued pay applies. What does differ per situation is how long you keep paying. More on that below.

For which employees do you not have to pay yourself?

In some cases you continue to pay the wage, but you get it back through a sickness benefit (Ziektewetuitkering) from the UWV. The UWV then pays 100% of the daily wage, which you offset against your employee’s wage. This is called the safety net. You can apply for such a benefit if your employee is ill because of, for example:

• pregnancy or childbirth
• organ donation

Or if your employee:

• is covered by the no-risk policy, for example with a work-limiting disability or a WIA, WAO, WAZ or Wajong benefit
• falls under the compensation scheme for older employees
• works flexibly, such as on an agency contract, on-call contract or zero-hours contract, or as a trainee or freelancer
• has reached state pension (AOW) age

The no-risk policy is useful for employers, because it covers a large part of the financial risk when you employ someone with a work-limiting disability. When exactly you can apply for a sickness benefit is explained in a separate article.

How much do you have to pay?

You pay for a maximum of two years (104 weeks), but the rules for year one and year two differ on one important point:

That difference is the most common misunderstanding. In the first year you top up to the minimum wage if 70% falls below it. In the second year that is no longer required; your employee then requests a supplement from the UWV under the Supplementary Benefits Act themselves.

Pay attention to what you count as well. The 70% applies to the whole wage your employee would earn if they were not ill. That is more than just the monthly salary. Think of a thirteenth month, structural overtime pay, a shift allowance or a fixed personal allowance: those count. A one-off bonus usually does not. If you are unsure whether a wage component is structural, check with your payroll department before you pay out the first amount, because a wrong start causes unnecessary disputes later.

In two cases you pay 100% instead of 70%: illness due to organ donation and pregnancy or childbirth. For those you apply for a sickness benefit, so you do not have to carry that amount yourself.

Many collective labour agreements also stipulate that you pay more than 70% in the first year, often 100% or 90%. So always check your collective agreement or employment contract first: it can be more generous than the statutory minimum, but never lower.

Paying an on-call worker

A sick on-call worker is also entitled to pay, as long as there is an employment contract. With a zero-hours contract or an on-call contract with a preliminary agreement, you continue to pay if your on-call worker falls ill during a call-up period. You then pay until that call-up period ends. Outside a call-up period it is more complex, because often no wage has been agreed; the legal presumption of working hours plays a role there. Have that checked if in doubt.

What if the contract ends during illness?

Does your employee’s contract end while they are still ill, and have they not yet been ill for two years? Then you report the employee sick to the UWV on the last day of the contract. As soon as the contract ends, you no longer have to continue paying. Your employee then falls back on a sickness benefit from the UWV.

This is an important difference from a permanent contract. With a fixed-term contract that ends, the UWV takes over the guidance and the benefit, whereas with a permanent contract you remain responsible for the full two years of continued pay and reintegration.

Sick employee at state pension age

Lighter rules apply to employees who have reached state pension (AOW) age. Does your sick employee at pension age have an employment contract? Then you continue to pay for a maximum of six weeks. After that you may dismiss the employee, but you may also keep them on and continue to pay voluntarily.

Does your sick employee at pension age have no employment contract, or does the contract end? Then you apply for a sickness benefit from the UWV and do not have to pay anything yourself.

Continued pay after two years of illness

Is your employee still ill after two years? Then your obligation to continue paying ends in principle. You may then dismiss the employee due to long-term incapacity for work, provided the conditions are met: a return is not expected within 26 weeks and there is no longer any suitable work. When that dismissal of a sick employee is allowed is explained separately.

After two years your employee can apply for an incapacity benefit: the WIA benefit from the UWV. Whether it is granted depends on how much someone is still able to earn.

Why reintegration is directly connected to this

Continued pay is not only about money, but also about effort. You are obliged to work together with your employee towards a return to work. Those steps are set out in the Gatekeeper Improvement Act: drawing up an action plan on time, evaluating, and involving the company doctor.

If a return to the original or adapted role is not possible, the second track starts: looking together for suitable work with another employer, while the employment and the continued pay keep running. What such a second-track reintegration programme involves is set out on our main page.

If you do too little, it can cost you dearly. If the UWV finds at the WIA application that you have done too little, a wage sanction follows: you then pay a third year of wages. That makes good file-building not a formality, but a way to save a substantial amount. You can read more about what a sick employee costs an organisation in the related article.

The official rules at a glance

Care4Careers is happy to explain the rules in plain language, but it is wise to know the source as well. The government publishes the current rules through the Netherlands Enterprise Agency at Ondernemersplein: continued pay during sickness. An English version is available at business.gov.nl: sick pay. Amounts such as the minimum wage and the maximum daily wage change every six months, so check those there for a specific case.

In short

• You continue to pay wages during illness for a maximum of two years, to everyone with an employment contract.
• Usually at least 70%, topped up to the minimum wage in the first year, no longer in the second year.
• For pregnancy, childbirth or organ donation you pay 100%, with a sickness benefit as a safety net.
• An employee at state pension age with a contract is paid for a maximum of six weeks.
• If a fixed-term contract ends during illness, report the sickness to the UWV on the last day.
• Work demonstrably on reintegration, or you risk a wage sanction of an extra year.

If you want to postpone the WIA application for a while, that is possible with voluntary extended continued pay. If a contract ends while the employee is still ill, read what you do when an employee leaves employment while sick.

Advice on continued pay and reintegration?

Are you dealing with an employee on long-term sick leave and do you want to be sure your file is in order and your risk of a wage sanction is limited? Care4Careers guides employers through the entire process, from the first year of illness to the second track. See what second-track reintegration for employers can mean for your organisation, or request a no-obligation advisory conversation.