Small businesses breach recruitment and sickness benefit legislation

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Research published in autumn 1998 indicates that 50% of smaller businesses in the Netherlands have not yet taken measures relating to sick employees which are required by law. Furthermore, many small businesses are breaching the Employee Appointment Act by questioning job candidates about the state of their health.

Since March 1996, small businesses (defined as those with fewer than 20 employees) have been required to play a greater role in the health of employees, having been made responsible for their sick pay (70% of pay for the first year of sickness). Furthermore, the premiums paid by businesses under the Occupational Disability Insurance Act have been made dependent on the number of disability cases in the company - a measure which affects small businesses disproportionately. Another legal change in this area affecting small businesses is that since January 1998, the Employee Appointment Act (Keuringswet) prohibits questioning job applicants about the state of their health. Research results published in autumn 1998 reveal that some 50% of businesses have not yet taken measures to deal with sick employees. Furthermore, many question applicants about their health. It appears that by asking job candidates about the state of their health, small businesses now try to keep sickness risks outside the company. In addition, more temporary employment contracts are being used to limit these risks still further, though the present tight labour market is undermining this strategy.

It was the employers' organisation for small and medium-sized businesses, MKB Nederland, which sounded the alarm on these issues in September 1998, . A survey conducted by MKB amongst 130 businesses revealed that the costs of absence due to illness are skyrocketing and that long-term absence is also increasing. MKB blames this on the poor functioning of the occupational health and safety services (Arbodiensten), whose task is to examine sick employees. If an illness lasts longer than 13 weeks, they should prepare a return-to-work plan, but this is often not done. MKB believes that this is due to the poor level of contact between the occupational health services, the Occupational Disability Insurance Act administrators and insurance officers. In addition, the occupational health services are themselves becoming more expensive: costs are already higher than before privatisation of this area of insurance (NL9807188F), so that many small businesses do not take out any insurance whatsoever to cover the costs of sick employees. At present, one-third of businesses employing fewer than five employees have no sickness insurance at all. MKB fears that if the economic tide turns, a flood of bankruptcies will ensue.

Apart from insuring sick employees, businesses are obliged to enter into a contract with the occupational health services. Small businesses may themselves also make an inventory of the risks to their employees. Research reveals that of the small businesses which do not have a contract with an occupational health service, almost half have made no such inventory and have no intention of doing so. Only a quarter have a contract and most of them have no idea of the costs entailed. In addition, only a third of businesses know about the contract for sickness risks that their sectoral organisation has concluded on their behalf. These results - obtained from a survey of 3,000 companies - appear to belie MKB's cry of distress: costs in many small businesses cannot have skyrocketed for the reasons claimed, because they have not yet complied with their legal obligations