What financial entitlements does an employee have during illness? How long does the obligation to continue to pay wages apply? And does the cause of the incapacity for work, for example if illness is due to perhaps irresponsible choices, still affect the wage payment obligation? We are happy to answer these questions.
FINANCIAL ENTITLEMENTS DURING ILLNESS
The main rule is that as an employer, you must continue to pay at least 70% of the gross monthly salary during illness for a maximum of 104 weeks. This period can be extended by up to 52 weeks if the UWV imposes a wage sanction.
The lower limit during the first year of illness is the minimum wage, and the upper limit is the maximum daily wage. In the second year of illness, there is no lower limit (apart from the minimum percentage of 70%). Deviating in favour of the employee is allowed by law. This possibility is regularly used in practice (especially for the first year of illness).
Wages mean the remuneration that the employer owes the employee for the stipulated work. This includes in any case the monthly salary including holiday allowance. We discuss some specific wage components in more detail below:
• Bonus: a distinction should be made here between a bonus dependent on an employee’s performance versus the company’s own performance:
o of the bonus dependent on individual performance, the average should be paid during illness.
o the bonus dependent on employer performance does not have to be paid during illness. Consider, for example, a profit distribution.
o a combined bonus should be paid on average.
• Overtime pay or shift bonuses should also be paid on an average basis at the time the employee received them on a structural basis.
• A thirteenth month should also be paid in full.
• The lease car may continue to be driven by the employee if this is a condition of employment and therefore not merely linked to the position.
• Expenses/travel allowances do not have to be paid if the employee no longer incurs these expenses during illness. However, if an employee is partially incapacitated, this may affect these allowances.
It is possible that an applicable collective agreement contains provisions on how to calculate the average. If this is not the case, a reference period of, in principle, three months can be used to calculate the average.
Tips:
It is possible to contractually agree that certain terms and conditions of employment do not apply during illness. Consider a provision whereby the right to a lease car lapses after a period of inactivity. As an employer, you can also make such agreements in the case of expense allowances and travel costs. Think carefully about this when drawing up terms of employment and seek legal advice if necessary.
Do not default to the last three months when calculating the average. Look carefully at a representative reference period that takes into account, for example: peaks and troughs during a specific period or project.
Note:
In case of consistent use and/or if there is justified reliance on the part of the employee, the employee could still claim certain wage components.
ROLE CAUSE OF DISABILITY
In principle, the cause of the incapacity for work does not play a role in whether there is an entitlement to continued wage payment. However, no salary is due the moment the employee deliberately caused the illness himself. The requirement is then that the employee’s actions were also intended to make him sick. Risky behaviour is thus insufficient to assume intent. This is therefore a strict and severe criterion, which means that such a situation will not easily arise. And if there is, the question is whether the employee is not suffering from a mental disorder because in that case, again, there is no question of intent.
This means that both the employee who is injured during his skiing holiday and the indoor footballer who continues to play football with various injuries are entitled to continued payment of wages. This also applies to the employee who struggles with addiction problems and thereby continues to drink alcohol against his better judgment.
In case of a necessary cosmetic surgery, as an employer you are also obliged to continue paying wages. If the cosmetic surgery is not medically necessary, there may be intent. This is the case the moment the employee is sure that he will not be able to work for a certain period of time after the operation. During that period, therefore, the employee is then not entitled to wages. This becomes different again the moment a complication occurs during recovery that the employee could not know could occur.
IN SHORT
An employee is entitled to payment of 70% of the wage components whereby not only the gross monthly wage has to be continued. This period lasts for a maximum of 104 weeks if no wage sanction is imposed. In principle, the cause of the occupational disability does not play a role in the question of whether wages should continue to be paid. However, this becomes different the moment the employee became ill intentionally.
Would you like advice on whether certain wage claims of an employee should continue to be paid during illness, or help formulating conditions of employment or designating a representation reference period? Or are you an employee, and feel that your employer is underpaying you during sickness? Contact us and we will be happy to advise you further!
