As an employer, having an employee become incapacitated due to an accident can have significant financial consequences. You are confronted 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 who caused the accident. This process is called 'wage recourse.' In this article, we explain what wage damage entails, which costs you can recover, and how to go about it.
What is wage damage and when are you eligible for recourse?
Wage damage arises when an employee becomes (temporarily) incapacitated for work due to an accident. As an employer, you are legally obligated to continue paying at least 70% of the wages during the first two years of illness (Extended Obligation for Continued Payment of Wages During Illness Act, WULBZ). Often these costs are even supplemented to 100% through provisions in the collective labor agreement or employment contract.
When your employee's incapacity for work is the result of an accident caused by a third party, you as an employer can recover your damages from this third party. This is established 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 responsible liable for your net wage damage and other reasonable costs, such as reintegration expenses.
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, meaning the amount the employee receives net in their bank account. Costs such as employer charges and social security contributions are not included.
- Reintegration costs: This includes all reasonable costs incurred to get your employee back to work. These may include:
- Engaging a reintegration agency.
- Developing a plan of action.
- Costs for additional training, coaching, and guidance.
- Costs for an outplacement agency, if return to the original position is not possible.
- Costs for workplace modifications: If the workplace needs to be modified to allow the employee to return to work, these costs can also be recovered. Examples include:
- An adapted office chair or special software.
- Costs for adapted transportation, such as a taxi.
- Setting up a soundproof workspace.
Please note: costs for a replacement worker or lost revenue due to the employee's absence cannot be recovered.
Wage recourse: The importance of good record-keeping
To file a successful claim, proper record-keeping is of essential importance. You must be able to demonstrate which costs you have incurred and the reason for them. Collect your employee's pay slips, occupational health service reports, and other relevant documents. It is also important that you have authorization from your employee to access their medical records.
Additionally, it is important that you hold the opposing party liable in a timely manner. The statute of limitations for wage recourse is five years. This means that you can claim costs from the liable party up to five years after the accident. Therefore, do not forget to regularly review your records and assess whether there are still costs that can be recovered.
How do you hold a third party liable?
As an employer, you can draft a written liability statement yourself and send it to the liable party or their insurer. In most cases, the opposing party is insured for civil liability, which means the claim is directed to the insurer. It is important to specify in detail which costs you are recovering and on what basis.
Challenges in recovering wage damage
Recovering wage damage is often a complicated process. You will almost always be dealing with an insurer that defends the interests of the party who caused the accident. 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 extent of recoverable costs. For this reason, it may be wise to engage a specialized lawyer or wage damage specialist.
Examples of situations in which you can recover wage damage
Whether or not the accident occurred during working hours does not matter for the possibility of wage recourse. Here are some examples of situations in which you as an employer can recover wage damage:
- 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, resulting in incapacity for work.
- Accident during leisure time: An employee sustains an injury during a sports match, such as a rough tackle on the football field, or falls during motocross.
- Accidents due to poor road surfaces: Your employee trips on a poorly maintained sidewalk or falls into an uncovered hole on a public road.
In all these cases, you as an employer can recover wage damage from the liable party, provided there is negligence or fault.
Conclusion: Take steps to recover your wage damage
Recovering wage damage 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. Ensure that your records are in order, hold the opposing party liable in a timely manner, and engage a specialist if in doubt. This way, you can continue to focus on your core business activities while keeping the damage you suffer to a minimum.
Do you need help recovering wage damage? Then contact the experienced attorneys and lawyers at Arslan Advocaten. We are ready to assist you and ensure that your interests are optimally represented.