Employee leaving sick: what about premium differentiation?
Are you familiar with the financial consequences of an employee leaving your company sick? The Sickness Benefits Act and WGA premiums are differentiated. This means that the premiums depend on the inflow of employees who became ill on the last day of their employment or within 4 weeks after the dismissal date. In this article we discuss the premium differentiation and the calculation of this premium.
Premium Differentiation
Since the introduction of the Sickness Absence and Disability of Employees Act, the ZW benefit and WGA benefit are attributed to the last employer. This is done via a differentiated premium. If an employee leaves sick or becomes sick within 4 weeks after the end date and can claim a ZW or WGA benefit, this may have consequences for the premiums to be paid by the employer.
Note: An employee who leaves employment, receives unemployment benefits and then becomes ill, is not attributed to the employer. The UWV is then regarded as the “last employer”.
Calculation of premiums Sickness Benefits Act and WGA
Each year the UWV calculates the premiums based on the data from two years earlier. As an employer, you are informed by the tax authorities of the level of these premiums in the autumn of each calendar year in the so-called ‘Besluit gedifferentieerde premie Whk’ (Differentiated Contribution Decision).
Distinction between small, medium-sized and large employers
When calculating the differentiated ZW and WGA premiums, a distinction is made between small, medium-sized and large employers. For small employers, a sector-based premium applies. For medium-sized employers, the weighted average of the sectoral premium and individual premium applies. For large employers, the premium is based on an average premium level with a surcharge or discount depending on the individual and average employer risk.
From a financial point of view, it is therefore in the interest of medium-sized and large employers that an employee does not leave sick or falls ill within four weeks of the date of dismissal.
Average wage due for contributions
To determine the contribution rate in a particular year, the average compulsory wage in the preceding two years is always taken into account. For 2022 the year 2020 has been taken into account.
Report employee’s recovery to UWV?
For an employer it may therefore be advantageous that the employee does not leave sick. However, a sick employee cannot simply be reported back to work. After all, the employee is not available for the labor market and there is a chance that the ex-employee will still report sick after leaving employment, with all its consequences.
If recovery is expected in the short term, it may be advantageous to retain the employee in service until recovery has taken place. This prevents the employee from leaving the company sick. In the latter case, a termination agreement may already be agreed upon. After recovery and leaving the company, the employee can apply for unemployment benefits and the employer will not be affected by the premium differentiation.
Become self-insurer for the ZW or WGA?
For some employers, it may be attractive to become self-insurer for the ZW or WGA. In the case of the ZW, an own-risk carrier pays a lower differentiated premium, because no premium needs to be paid for the ZW flex. In the case of the WGA, the excess carrier only pays the basic premium.
Note: as an excess carrier you do have other costs. You pay the benefits and in addition, as an excess carrier, you are responsible for the reintegration of the (ex-)worker. As an own-risk carrier, you must therefore have sufficient knowledge of the ZW and/or WIA.
Employment Lawyers Rotterdam
Do you have any questions about the sick leave of employees, premium differentiation or self-risk bearing? Please feel free to contact our employment lawyers Peter Verheijden and Lisa Kloot of LVH Advocaten.
