As an employer, if an employee is unable to work due to an accident, it can have significant financial consequences. You are faced with ongoing wage costs, rehabilitation costs, and possibly the need to hire a replacement. However, many employers are not aware that these costs can often be claimed from the person responsible for the accident. This process is called ‘wage recovery’. In this article we explain what wage damage entails, which costs you can claim and how you can approach this.
What is wage damage and when are you eligible for recovery?
Wage damage occurs when an employee becomes (temporarily) incapacitated due to an accident. As an employer, you are legally obliged to pay at least 70% of the wage during the first two years of illness (Extension of Wage Payment Obligation in Case of Illness Act, WULBZ). Often these costs are supplemented up to 100% by provisions in the collective labor agreement or employment contract.
If your employee’s incapacity to work is the result of an accident caused by a third party, you as an employer can claim your damage from this third party. This is stated in article 6:107a paragraph 2 of the Dutch Civil Code. This means that you as an employer have an independent right of recovery and can hold the perpetrator liable for your net wage damage and other reasonable costs, such as those for rehabilitation.
Which costs can be claimed in wage recovery?
Your right of recovery enables you as an employer to claim a number of costs back from the liable party. The following costs are eligible:
- Net salary of the employee: You can only claim the net salary, i.e., the wage amount that the employee receives net on his account. Costs such as employer’s charges and social premiums are not included.
- Rehabilitation costs: This includes all reasonable costs that are made to get your employee back to work. This includes:
- Engaging a rehabilitation agency.
- Creating a plan of action.
- Costs for additional education, coaching, and guidance.
- Costs for an outplacement agency if a return to the employee’s previous position is not possible.
- Costs for workplace adjustments: If the workplace needs to be adjusted to allow the employee to return to work, these costs can also be claimed. This includes:
- An adapted office chair or special software.
- Costs for adapted transport such as a taxi.
- Setting up a noise-reduced workplace.
Please note: costs for a replacement or lost sales due to your employee’s incapacity cannot be claimed.
Wage recovery: The importance of good administration
To file a successful claim, good administration is essential. You need to be able to demonstrate which costs you have incurred and the reason for this. Collect your employee’s pay slips, reports from the occupational health service and other relevant documents. It is also important that you have permission from your employee to access his medical records.
Furthermore, it is important to hold the other party liable in time. The statute of limitations for wage recovery is five years. This means that you can claim the costs from the liable party up to five years after the accident. Therefore, remember to regularly check your administration and see if any costs can still be claimed.
How do you hold a third party liable?
As an employer, you can prepare a written liability claim yourself and send this to the liable party or their insurer. In most cases, the other party is insured for legal liability, which means that the claim is directed to the insurer. It is important to detail which costs you are claiming and on what basis this is done.
Challenges in claiming wage damages
Claiming wage damages is often a complicated process. You almost always have to deal with an insurer that represents the interests of the perpetrator. These insurers have experienced lawyers who do everything they can to keep the compensation as low as possible. This can lead to discussions about liability and the extent of reimbursable costs. For this reason, it can be wise to engage a specialized lawyer or wage damage specialist.
Examples of situations in which you can claim wage damages
For the possibility of wage recovery, it doesn’t matter whether the accident occurred during work hours or outside of it. Here are some examples of situations in which you as an employer can claim wage damage:
- Traffic accident: Your employee gets involved in an accident on the way home, caused by another car driver.
- Accident with animals: Your employee gets bitten by the dog of a third party leading to incapacity for work.
- Accident during spare time: An employee gets injured during a sports match, such as a heavy tackle on the football field, or falls during a motocross.
- Accidents due to poor road surface: Your employee trips over a badly maintained sidewalk or falls into an uncovered hole on the public road.
In all these cases, you as an employer can claim the wage damage from the liable party, provided there is negligence or fault.
Conclusion: Take steps to recover your wage damages
Claiming wage damages can help you as an employer to limit the financial consequences of an employee’s accident. Although the process is often complex and requires legal advice, it is worth recovering these costs. Make sure your administration is in order, hold the opposing party liable in time, and enlist a specialist if in doubt. In this way, you can continue to focus on your company’s core activities while the damage you suffer is kept to a minimum.
Do you need help with claiming wage damages? Contact the experienced lawyers and jurists at Arslan & Arslan Lawyers. We are ready to assist you and ensure that your interests are optimally represented.
