What is a wage penalty?
The wage penalty means that the employer is obliged to continue paying the employee's wages for a maximum of 52 weeks longer. Because the employer is already obliged to continue paying the employee's wages for the first 104 weeks of illness, a wage penalty imposed by the UWV extends the wage payment period to 156 weeks. A wage penalty can be issued on administrative grounds or on substantive grounds.
Self-insurer and a wage penalty
If you are self-insurer for the WGA, you remain responsible for the reintegration of your former employee even after 104 weeks. This applies for the first 10 years that this employee receives WGA benefits. Do you receive a wage penalty? Then the wage penalty will be added to the 10 years of WGA benefit. This can be very expensive.
The UWV imposes a wage penalty in about 10% of reintegration assessments. This percentage has been almost the same for several years. In the first eight months of 2020, nearly 1,800 substantive wage sanctions were imposed. Over 2015-2016, employers and/or employees objected to only 42% of substantive wage sanctions on average. Of these objections, 11% were upheld. As far as we are concerned, comparatively few objection cases are initiated (based on research from 2015 - 2017) to explore objection possibilities.
