Introduction
The Netherlands has a unique obligation within Europe: employers must continue to pay wages for up to two years in the event of illness. This places significant financial risks on employers, especially compared to other European countries where the obligation is much shorter or lighter. This blog explains why the Netherlands differs in this respect and what the consequences are.
Netherlands leader in sick pay continuation
Many business owners think twice before hiring permanent staff. This has everything to do with the obligation to continue paying salaries for two years in case of illness. If you compare this with other European countries, it is immediately apparent that the Netherlands is way out of line in this respect.
In countries like Scandinavia, the wage payment obligation is about 14 days. In Belgium it is two to four weeks, in Germany six weeks. England differs: there, although you get 28 weeks of continued pay, it is only a small benefit of about one hundred euros per month. In the Netherlands, it is a continued payment of 70% to 100% of the last-earned salary, and that for no less than two years. No other European country has such a heavy obligation for employers.
Impact on employers
The obligation to continue paying wages for two years makes hiring risky, especially for small businesses. Employers are also responsible for reintegrating the sick employee. They have to offer suitable work, make regular evaluations and fulfill all kinds of administrative obligations.
If something goes wrong in the reintegration process, the UWV can impose a wage penalty. This means that the employer must continue to pay wages for a third year. The costs and risks then quickly pile up. And although it is possible to take out absenteeism insurance, the premiums for this are high, especially for smaller entrepreneurs.
Moreover, unfortunately, it is also abused. Not every sick call is equally justified, and employers have limited ability to take effective action against it without running legal risks.
Brake on permanent employment
The long period of salary continuation makes it understandable that many employers opt for flexible or self-employed workers rather than salaried staff. After all, the risk of an employee's long-term disability can have disastrous financial consequences for small businesses.
If legislators are serious about reducing the number of flex workers and the self-employed without staff, it makes sense to shorten the duration of the salary continuation obligation during illness. A shorter period would significantly reduce the risks for employers and make it more attractive to hire people on a permanent basis.
Conclusion
The long-term obligation to continue to pay wages during illness makes hiring risky, especially for small employers. This contributes to the popularity of flexible employment relationships. Shortening the wage payment obligation could reduce the risks and make permanent employment more attractive. A revision of the rules therefore seems necessary.
This blog was written by Mr. Stijn Blom, employment lawyer at Arbeidsadvocaat.nl B.V. Stijn has extensive experience in employment law and assists entrepreneurs daily with a wide range of employment-related matters. From dismissal cases to drafting watertight contracts and policies – with his practical and personal approach, he helps employers and employees move forward. Want to know more?Visit Stijn's page.
Arbeidsadvocaat.nl is happy to think with you if you have questions about continued salary payment during illness. Please feel free to contact us .
April 2025
