On 2 October 2012 the Senate [Eerste Kamer] consented to the modernisation of the Sickness Benefits Act [Ziektewet (ZW)], which has consequences both for employers and employees. As a result, the employer contribution will depend on the number of employees who start drawing sickness benefit. This means that the incapacity for work risk will largely be borne by the employer. Sick employees themselves will also have greater incentives to go back to work.
Sick employees whose employers are not subject to an obligation to continue paying their salaries (e.g. temporary and on-call workers) are entitled to sickness benefit under the current Sickness Benefits Act. Benefits under the act are also available to those who have become ill because of pregnancy or an organ donation. In addition, employees whose employment contracts end while they are ill are eligible for benefits under the act. The amendments to the act are an attempt to encourage employees to go back to work, curb long-term absence due to illness and prevent benefit payments from being made under a different incapacity benefits act. Due to enter into force on 1 January 2014, the amendments concerned are discussed below.
Differentiation of employer contributions
As of 1 January 2014, big employers (salary bill bigger or equal to € 3,020,000 ^) will pay an individual contribution for incapacity benefits. The amount of this contribution will depend on the employer's total salary bill and will be determined on the basis of the specific incapacity benefit load to be allocated to that employer. The amount of the new contribution will be based on the number of employees who started drawing sickness benefit two years previously. This means that the contribution for 2014 will be based on the number of employees who start drawing benefit now (2012). This measure is an attempt to encourage employers to be more pro-active in curbing absence due to illness.
Small employers will pay a sector-based contribution. The salary bill threshold for small employers is to be determined by secondary legislation. The contribution owed by medium employers will be partly sector-based and partly determined on an individual basis.
Because the contribution for big and medium employers is to be based on the number of employees who start drawing sickness benefit, these employers have a financial interest in reintegrating employees. After all, employees who reintegrate successfully will not have to apply for sickness benefit. This will reduce the contribution owed by their employers. Thus big and medium employers should now identify those employees who are going to leave their positions and then apply for sickness benefit. This will give the employer some control over the amount of contribution owed.
Employee medical examination after one year: reintegration obligations tightened up
The UWV (Employee Insurance Agency) currently gives employees a medical examination two years after they have become ill. With the amendments to the act, this will now be reduced to one year following the onset of illness. In the first year of illness, an employee must be "unsuited to doing the work he/she in fact carried out immediately prior to the onset of illness." At the end of the first year of illness, the UWV assesses whether an employee is capable of "earning more than 65% of his/her income with generally accepted work that healthy persons with similar training, education and experience customarily earn." If that is the case, the person in question will no longer be entitled to sickness benefit. The new criterion under the Sickness Benefits Act is in line with the Work and Income (Capacity for Work) Act [Wet Werk en Inkomen naar Arbeidsvermogen (Wet WIA)].
This change to the criterion under the Sickness Benefits Act means that reintegration obligations for sickness benefit recipients will also be tightened up. Once the act takes effect, such recipients will be required to undergo proper treatment, apply for jobs, attend training (or retraining) and tackle debt or addiction problems.
Benefit payments reduced
From 2014 the rules applicable to the duration and amount of sickness benefit payments will also come into line with the Work and Income (Capacity for Work) Act. At present, any employee who starts drawing sickness benefit is entitled to receive 70% of his/her most recent salary. However, following the amendment, the Sickness Benefit Act will also distinguish between salary-based and minimum benefit. Salary-based benefit amounts to 70% of an employee's most recent salary. The duration of this benefit will depend on the employee's employment history.
Once the period for the salary-based benefit has ended, the person in question will be eligible for minimum benefit. This minimum benefit amounts to 70% of the minimum wage. This is equivalent to social assistance benefit [bijstand]. Both forms of benefit will be paid for a maximum of 104 weeks (which is the maximum duration under the Sickness Benefits Act). Minimum benefit will be paid for 104 weeks, minus the number of weeks for which the salary-based benefit was paid.
With the bill's acceptance, employers will have greater responsibility for activating employees and keeping them at work. Sick employees themselves will have greater incentives to get back to work. For you as an employer, it is important:
to identify which employees have left or will leave their positions while being ill, and consequently claimed or will claim sickness benefit;
to keep track of these employees and provide them with support in the reintegration process.
This will give you greater control over the costs involved.
We would be pleased to advise you further on this matter.
^ Salary bill bigger or equal to100x the average salary. This year the average salary is € 30,200.