As an employer, an employee’s absence due to an accident can have significant financial consequences. You are faced with ongoing wage costs, reintegration costs, and possibly the need to hire a replacement. However, many employers are unaware that these costs can often be recovered from the party that caused the accident. This process is called ‘wage recourse’. In this article we explain exactly what wage loss entails, which costs you can recover, and how you can 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 required to continue paying at least 70% of wages during the first two years of illness (Act on the Extension of the Obligation to Continue Paying Wages in the Event of Illness, WULBZ). Often these payments are even topped up to 100% by provisions in the collective labor agreement or employment contract.
If 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 that third party. This is laid down 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 allows 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 recover only the net wages, i.e., the amount the employee actually receives in their bank account. Costs such as employer contributions and social security contributions are not included.
- Reintegration costs: This includes all reasonable costs incurred to get your employee back to work. For example:
- Engaging a reintegration agency.
- Drawing up 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 must be modified to allow the employee to work again, these costs can also be recovered. For example:
- An adapted office chair or special software.
- Costs for adapted transportation, such as a taxi.
- Setting up a low-noise workspace.
Note: costs for a replacement or lost revenue due to your employee’s absence cannot be recovered.
Wage recourse: The importance of good record-keeping
To file a successful claim, proper record-keeping is essential. You must be able to show which costs you incurred and why. Collect your employee’s payslips, occupational health service reports, and other relevant documents. It is also important that you have your employee’s authorization to access their medical records.
It is also important that you hold the other party liable in a timely manner. The limitation period for wage recourse is five years. This means you can claim the costs from the liable party up to five years after the accident. Therefore, remember to review your records regularly to see whether any costs can still be recovered.
How do you hold a third party liable?
As an employer, you can draft a written notice of liability yourself and send it to the liable party or their insurer. In most cases, the other party is covered by third-party liability insurance, so the claim ends up with the insurer. It is important to specify in detail which costs you are recovering and on what basis.
Challenges in recovering wage loss
Recovering wage loss is often a complicated process. You will almost always be dealing with an insurer defending the interests of the person who caused the loss. These insurers employ experienced lawyers who do everything they can to keep compensation as low as possible. This can lead to disputes about liability and the scope of reimbursable costs. For this reason, it may be wise to engage a specialized lawyer or wage-loss specialist.
Examples of situations in which you can recover wage loss
It makes no difference for the possibility of wage recourse 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, rendering them unfit for work.
- Accident during leisure time: An employee sustains an injury during a sporting match, such as a hard tackle on the football field, or falls during motocross.
- Accidents due to poor road surface: Your employee trips over a poorly maintained sidewalk or falls into an uncovered hole on the public road.
In all these cases, you as the 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 worth reclaiming these costs. Make sure your records are in order, hold the other party liable in a timely manner, and consult a specialist if in doubt. That way, you can keep focusing on your company’s core activities while limiting your losses as much as possible.
Do you need help recovering wage loss? Then contact the experienced attorneys and legal experts of Arslan & Arslan Advocaten.
