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Workers in the Netherlands facing long-term illness could lose part of an important financial cushion, as the government explores limiting the sick pay that employers must provide. The idea is only at the exploratory stage, but it has already drawn sharp opposition from trade unions.
How Dutch sick pay works now
The Netherlands has an unusually generous system by international standards. Under Dutch law, an employer must continue to pay at least 70 percent of the salary of an ill employee for up to 104 weeks, two full years. That is far longer than in most countries, where the state typically takes over much sooner. In practice, most collective labour agreements (caos) extend benefits even further, covering up to 100 percent of salary during the first year of illness.
For employees, that means a serious illness usually does not immediately affect the pay packet. For employers, it means carrying the cost of a sick worker’s wages for a long time, which is why, according to a study for the Ministry of Social Affairs and Employment (SZW), around 60 to 70 per cent of small and medium-sized businesses take out private insurance to cover the risk.
What the government is proposing
The Minister for Work and Participation, Thierry Aartsen, of the VVD, has submitted an “options paper” to the House of Representatives setting out possible ways to reform the rules. The central scenario would legally restrict the extra top-up payments after six months of illness, meaning that from that point an employee would receive 70 percent of their salary rather than the full amount.
The minister’s argument is about incentives. When someone continues to receive their full salary while off sick, he contends, the “intended financial incentive to quickly return to work” is missing. According to the ministry’s own calculations, capping top-ups at 70 percent after half a year would save employers an estimated 1.4 billion euros a year, and the cabinet claims it would increase the labour supply by encouraging people to return to work sooner, at least partially.
A second rationale targets a long-standing problem in the Dutch labour market. Government documents show that 45 percent of employers regard the two years of sick pay liability as a major barrier to offering permanent contracts. Because a permanent employee who falls ill can be so costly, many employers prefer temporary or flexible arrangements. By exploring statutory limits, the cabinet hopes to make employers more willing to offer permanent contracts (vast contracten) that so many workers want.
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The unions push back
The response from the unions was swift and hostile. The trade union CNV called the plans “very harmful”. Its chairman, Hans van den Heuvel, argued that the government was overstepping: “the cabinet has no business at the collective bargaining table,” he said. Because the 100 percent top-up is agreed through collective bargaining between unions and employers, unions see a statutory cap as interference in free negotiations, and warn it could clash with international labour treaties that protect contractual freedom. The minister himself acknowledged that intervening in collective agreements is legally contentious, while arguing that the public interest in curbing absenteeism could justify it.
The unions also make a practical objection. Capping pay, they warn, will drive “presenteeism”, people who are unwell returning to work too early out of fear of losing income, which risks deeper burnout and greater long-term harm, both to the worker and to productivity.
That warning is backed by data on what actually drives long-term absence. Figures from the occupational health service ArboNed indicate that lengthy sick leave is caused by genuine health crises rather than a lack of motivation. Long-term illness accounts for only 8 percent of sick notes, but 75 percent of all lost working days in the Netherlands, and much of it is down to work stress and burnout, the kind of conditions unlikely to be solved by cutting someone’s pay.
The alternatives, and their problems
The government’s paper also floats other options, such as shortening the mandatory sick pay period from two years to 18 or even 12 months. But the ministry’s own assessments show this would simply shift high costs onto the public disability benefit system (WIA), adding between 1.9 and 4.6 billion euros to public spending. On top of that, the benefits agency UWV does not currently have the administrative and medical capacity to handle the surge in disability assessments that would follow, making a shorter timeline unworkable in the near term.
What happens next, and what workers can do
For now, nothing has changed. The minister’s paper is explicitly an inventory of options to guide discussion in parliament and in upcoming talks with unions and employers’ groups, not a decided policy. Any actual change would have to survive those negotiations, the legal questions, and the political process.
In the meantime, the practical advice for employees, particularly those less familiar with the Dutch system, is to check their own collective labour agreement. It is worth knowing what percentage of your salary is guaranteed during the first and second years of illness, and whether the top-up payments depend on taking part in a workplace reintegration programme.