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Employee leaving sick: what about premium differentiation?

maandag 26 april 2021

Are you familiar with the financial consequences of a sick employee leaving your company? 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. You are a large employer if you have a total wage bill of more than 100 times the average premium due per employee (more than € 3,460,000), calculated over all employees in the Netherlands. If your total wage bill is between 10 and 100 times the average wage for employees (between € 340,6000 and € 3,460,000), you are classified as a medium-sized employer. A small employer is an employer with a total wage bill not exceeding 10 times the average compulsory wage per employee in the Netherlands (not exceeding € 346,000).

Average wage liable for premiums

For the determination of the premium in a certain year, the average compulsory wage of two years before is always taken into account. For 2021, therefore, we look back to the year 2019. The average compulsory wage was € 34,600.

Small employers sector premium

For small employers, the differentiated contributions for the WGA and the ZW are determined on the basis of the sector in which the employer is active. For medium-sized employers, the WGA and ZW premiums are a combination of sector-based premiums and an individual premium. For large employers, the differentiated premiums are fully individually determined.

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 dismissal date.

Report employee reinstatement to UWV?

For an employer, it may therefore be advantageous that the employee does not leave the company sick. However, a sick employee cannot simply be reported back to work. After all, the employee is not available for the labour 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.

Lisa Kloot

employees

+31(0)10 209 27 61 kloot@lvh-advocaten.nl
Peter Verheijden

enterprise and business, employees

+31 (0)10 209 27 55 verheijden@lvh-advocaten.nl

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