Continued Payment of Wages During Sickness and Employer Sanctions

The Principle (The First Two Years of Sickness)

An employee who becomes (temporarily) incapacitated for work due to illness is generally protected from losing their income. Pursuant to Article 7:629(1) of the Dutch Civil Code (BW), employees are entitled to 70% of their regular wages for a maximum of 104 weeks (2 years), subject to certain exceptions. This calculation may include income components such as holiday pay, a 13th-month bonus, overtime compensation, and shift allowances. For the first 52 weeks of this period, employees are entitled to at least the statutory minimum wage. Accordingly, an employer is obligated to partially continue paying the salary of a sick employee.

In practice, employment contracts or collective labor agreements (CAOs) often include provisions that are more favorable to the employee, such as full wage continuation (100%) during the first year of sickness and, in some cases, the second year as well.

Fixed-Term Employment Contracts

For employees on fixed-term contracts, the employer's obligation to continue paying wages ends when the employment contract expires. In such cases, the employee may qualify for benefits under the Dutch Sickness Benefits Act (Ziektewet), typically amounting to 70% of their daily wage.

Employer Sanction for Non-Compliance

(The Third Year of Sickness)The general principle is that an employee is entitled to continued wage payment for 104 weeks (2 years) in the event of sickness-related incapacity. However, there are specific circumstances under which this period can be extended, including:

• A delay in applying for WIA (Work and Income According to Labor Capacity Act) benefits, attributable to the employer.

• Mutual agreement between the employer and employee to extend the waiting period.

• A sanction imposed by the Employee Insurance Agency (UWV) due to the employer's insufficient efforts in fulfilling reintegration obligations under Article 25(9) WIA.

  
  

Duration of the Sanction

The UWV may impose an additional wage payment obligation of up to 52 weeks (beyond the initial 104 weeks). Employers can shorten this period by promptly addressing deficiencies in their reintegration efforts.

Wage Obligations During the Third Year of Sickness

The law does not explicitly specify the wage level that must be paid during the third year if a sanction is imposed. However, case law has provided guidance. For instance, in a 2020 judgment by the Amsterdam District Court, it was ruled that employers are not required to maintain the same level of supplemental payments during the extended period as they did during the first 104 weeks. In the absence of specific agreements to the contrary, employers can comply with the obligation by paying 70% of the statutory maximum daily wage.

The court also recognized that special circumstances, such as financial disadvantages caused to the employee by the sanction, could require the employer to pay a higher amount. For example, if the absence of a sanction would have entitled the employee to a WIA benefit and supplemental disability insurance yielding a higher income, the employer may be obligated to cover the difference.

Conclusion

Employees incapacitated by illness are generally entitled to 70% of their statutory maximum daily wage during the first 104 weeks, with the first 52 weeks subject to at least the statutory minimum wage unless a more favorable agreement exists. If the employer's wage payment obligation is extended due to a sanction, the default rate is 70% of the statutory maximum daily wage, although exceptional circumstances may lead to higher payments to prevent the employee from being disadvantaged by the sanction.

For legal advice or questions about wage continuation during sickness, feel free to contact one of our employment law attorneys.