As an employer, an employee’s absence due to an accident can have significant financial consequences. You are confronted with ongoing wage costs, costs for reintegration, and possibly the need to hire a replacement. Many employers, however, do not know that these costs can often be recovered from the party who caused the accident. This process is called ‘wage recourse’. In this article we explain what wage loss entails, which costs you can recover, and how to approach this.
What is wage loss and when are you eligible for recourse?
Wage loss arises when an employee becomes (temporarily) unfit for work due to an accident. As an employer, you are legally obliged to continue paying at least 70% of wages during the first two years of illness (Act on the Expansion of Obligation to Continue Payment of Wages in the Event of Illness, WULBZ). Often these costs are even supplemented to 100% by provisions in the collective labour agreement or employment contract.
When your employee’s incapacity for work is the result of an accident caused by a third party, you as the employer can recover your losses from this third party. This is set out in Article 6:107a paragraph 2 of the Dutch Civil Code. This means that as an employer you have an independent right of recourse and can hold the party at fault liable for your net wage loss and other reasonable costs, such as those for reintegration.
Which costs can be recovered through wage recourse?
The right of recourse enables you as an employer to recover a number of costs from the liable party. The following costs are eligible:
- Net wages of the employee: You can only recover the net wages, i.e., the amount the employee receives net in their account. Costs such as employer contributions and social security premiums are not included.
- Reintegration costs: This includes all reasonable costs incurred to get your employee back to work. Examples include:
- Engaging a reintegration agency.
- Creating an action plan.
- Costs for additional training, coaching, and guidance.
- Costs for an outplacement agency, if returning to the original position is not possible.
- Costs for workplace adjustments: If the workplace needs to be adjusted to enable the employee to return to work, these costs can also be recovered. Examples include:
- Adapted office chair or special software.
- Costs for adapted transportation, such as a taxi.
- Setting up a low-noise workplace.
Note: costs for a replacement or lost revenue due to your employee being unable to work cannot be recovered.
Wage recourse: The importance of proper record-keeping
To file a successful claim, proper record-keeping is essential. You must be able to show which costs you have incurred and why. Collect your employee’s payslips, reports from the occupational health service, and other relevant documents. It is also important that you have your employee’s authorization to access their medical data.
In addition, it is important that you hold the other party liable in time. The limitation period for a wage recourse claim 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 review your records regularly and check whether any costs can still be recovered.
How do you hold a third party liable?
As an employer, you can draw up a written notice of liability yourself and send it to the liable party or their insurer. In most cases, the other party is insured for legal liability, so the claim ends up with the insurer. It is important to specify in detail which costs you are recovering and on what basis this is done.
Challenges in recovering wage costs
Recovering wage costs is often a complicated process. You will almost always be dealing with an insurer that defends the interests of the party at fault. These insurers employ experienced lawyers who do everything possible to keep the compensation as low as possible. This can lead to disputes about liability and the scope of the costs that can be reimbursed. For this reason, it may be wise to engage a specialized lawyer or a wage-cost recovery specialist.
Examples of situations in which you can recover wage costs
For the possibility of wage recourse, it does not matter whether the accident occurred during working hours or outside them. Here are some examples of situations in which you as an employer can recover wage damages:
- Traffic accident: Your employee is involved in an accident on the way home, caused by another motorist.
- Accident involving animals: Your employee is bitten by a third party’s dog, making them unable to work.
- Accident during leisure time: An employee sustains an injury during a sports match, such as a hard tackle on the football field, or falls during a motocross.
- Accidents due to poor road surfaces: Your employee trips over a poorly maintained sidewalk or falls into an uncovered hole on the public road.
In all these cases, you as an employer can recover the wage damages from the liable party, provided there is negligence or fault.
Conclusion: Take steps to recover your wage loss
Recovering wage loss can help you as an employer limit the financial consequences of an employee’s accident. Although the process is often complex and requires legal advice, it is worthwhile to reclaim these costs. Make sure your records are in order, hold the other party liable in a timely manner, and engage a specialist if in doubt. That way, you can continue to focus on the core activities of your company while keeping the losses you incur as limited as possible.
Do you need help recovering wage loss? Then contact the experienced attorneys and legal experts at Arslan & Arslan Advocaten. We are ready to assist you and will ensure that your interests are optimally protected.
