Is Sick Days Included in Salary Continuation

During the state of crisis, the 26-week period of protection against dismissal in the event of incapacity for work is suspended.

An employer must continue to pay his employee in case of sick leave due to illness or an occupational accident and must do so until the end of the month during which the 77^th day of sick leave occurs, during a reference period of 18 successive months.

This is the principle of "continuation of pay" (or "Lohnfortzahlung").

As from the month following the 77^th day of sick leave, the National Health Fund (Caisse Nationale de Santé - CNS) takes over from the employer and pays sickness benefits to the employee on sick leave. From this point on, the employer no longer has to pay a salary to the employee, for as long as the employee receives benefits from the CNS.

Who is concerned

The following are involved in the continuation of pay whenever an employee is on sick leave:

• the employer;
• the employee on sick leave due to illness or accident, who at first benefits from the principle of 'continuation of pay' and then eventually receives sickness benefits if applicable.

Prerequisites

When the continuation of pay for an employee on sick leave is applied, it is assumed that:

• the employee has informed the employer of his sick leave in the necessary manner and within the appropriate deadline;
• the employer declares the periods of sick leave on a monthly basis.

How to proceed

Period of continuation of pay paid by the employer

An employer must continue to pay the salaries of an employee on sick leave until the end of the month during which the 77^th day of sick leave occurs.

The period of 77 days is counted in calendar days (and not in working days) during which the employee was declared on sick leave for the 18 calendar months prior to the month in progress (reference period).

In practice

• if the 77^th day falls during the month, the employer continues to pay the employee until the end of the month in progress;
• if the 77^th day falls on the first day of the month, the employer continues to pay the employee until the end of the month in progress;
• if the 77^th day falls on the last day of the month, the employer has fulfilled his obligations by continuing to pay the employee up until this day.

In all 3 cases, the CNS will cover payments for any subsequent periods of sick leave from the first day of the following month.

An employer therefore has to pay the salary, depending on the case, for 11 to 15 weeks.

In case of intermittent sickness, the 77-day situation is to be verified each month.

Furthermore, in the case of a change of employer, the 77-day counter goes back to 0.

The CNS calculates the cumulative record of sick leave on the basis of monthly declarations submitted by the employer as well as the medical certificates received from the employee.

It informs the employer when he must terminate or continue the payment of salaries in the case of sick leave.

However, it is useful to keep a record of the number of sick days taken each month during the previous 18 months.

This record can be produced automatically by using the Excel file for automatic calculation of the continuation of pay period:

• open and save the file;
• replace the data inserted as an example in the 'sick days' (jours d'incapacité) column by the number of days of sick leave taken by the employee;
• the periods of continuation of pay by the employer or sickness benefits by the CNS will then appear automatically.

For example: the table below illustrates the participation of the employer or the CNS regarding salary payments in case an employee is on sick leave.

Each month, the "Total" column shows the number of days which are to be borne by the employer and which must be taken into account for the calculation of the continuation of pay period.

Continuation in accordance with the type of sick leave

The continuation of pay by the employer only applies to certain types of sick leave:

• illness;
• accident;
• leave for family reasons;
• family hospice leave.

Other types of sick leave are covered at 100 % by the CNS from the first day of sick leave:

• sick leave during the first 3 months of the trial period;
• maternity leave;
• leave for pregnant or breastfeeding women;
• adoption leave.

All periods of sick leave due to illness, occupational illness or work-related accident are included in the 77 days of continuation of pay (Lohnfortzahlung - LFZ) calculation.

Key

* Periods not accounted for in the 77 days of LFZ

** Periods accounted for in the 77 days of LFZ

Paying salaries during sick leave

Period of continuation of pay

The salary paid to the employee by the employer during the period of continuation of pay consists of:

• the employee's complete salary;
• all other elements of remuneration:
  • that are stated as elements of the salary in the employment contract, the collective agreement or internal regulations;
  • that are paid on a regular basis;
  • or that are linked to activities planned in the scope of the organisation of work (e.g. work planned on a Sunday, a public holiday or at night).
    In the event of a dispute, only the employee must prove that he would normally have been scheduled for work paid at a higher rate if it hadn't been for his sick leave.

Absences due to illness or accident are considered as being effective working days.

Expenses reimbursed to employees are not considered as part of the salary. They are therefore not paid during the illness.

Period of pay covered by the National Health Fund (Caisse Nationale de Santé - CNS)

The National Health Fund (Caisse Nationale de Santé - CNS) covers:

• the employee's highest basic salary during the 3 months before the CNS started paying sickness benefits, i.e.:
  • the salary established in the employment contract or the applicable collective agreement;
  • any supplements that are granted once certain conditions have been fulfilled or unexpected events have taken place, but for which the amount remains fixed from one month to the next (e.g. head of family allowance for married partners);
• the average of premiums and fringe benefits related to salaries which are part of the 18-month base prior to the month of the beginning of the sick leave.
  'Premiums and fringe benefits' are payments in cash which are payable on a monthly basis but where the amount is likely to vary from one month to the next (i.e. productivity bonus).

Compensatory benefits for cyclical and bad-weather related layoffs are also covered.

For apprentices, the calculation is based on the apprenticeship pay.

Sickness benefits are linked to the trend of the cost of living. They cannot be lower than the minimum social wage or higher than five times the amount of the minimum social wage.

The CNS does not cover:

• overtime, even if regularly carried out before the period of sick leave and initially planned for the period during which the employee is on sick leave;
• one-off benefits ('bonuses');
• payments in kind (company accommodation, company car, luncheon vouchers, etc.), which, in principle, the employee continues to benefit from during his sick leave.

The employer who maintains the working relationship with the employee after 26 weeks of sick leave must make up the sickness benefit received by the employee and pay him the difference between the benefit and his net pay during the first 12 months of sick leave.

The CNS may suspend payment of the benefit:

• if the employee refuses to undergo a medical check without a valid reason;
• if, without a valid reason, the employee does not respond to the summons from the occupational health practitioner in the context of a redeployment procedure;
• if the employee is abroad without authorisation from the medical inspection department;
• if the employee is remanded in custody.

Reimbursement by the employers' mutual insurance scheme

To get the refund of the remuneration paid to the employee, the employer must declare, separately and for each period of sick leave, the number of hours claimed during which the employee would have worked.

If the employee did not fulfill his obligation to declare his incapacity for work to the National Health Fund, the employer must send the original copy of the employee's medical certificate to the CCSS upon their request.

The mutual insurance scheme automatically reimburses the employer 80 % of the overall salary costs (gross pay + employer's contributions) paid during the period of continuation of pay in the case of sick leave due to illness or accident, or more precisely 80 % of the contribution base.

The mutual insurance scheme reimburses up to 100 % of sick leave payments:

• which arose during the first 3 months of the trial period;
• corresponding to leave of absence for family reasons;
• corresponding to family hospice leave.

On the basis of monthly declarations regarding periods of sick leave and gross payments, the Joint Social Security Centre (CCSS) automatically calculates the amounts to be reimbursed to the employer by the mutual insurance scheme and/or the CNS as well as the date on which the continuation of pay ends or recommences.

The amount to be reimbursed to the employer by the mutual insurance scheme is:

• credited to the business on the monthly statement of account of the CCSS;
• compensated with the contributions due for the different risks.

Any potential disputes must be brought before the board of directors of the mutual insurance scheme.

Self-employed workers are paid 80 % of the contribution base applicable at the time of the start of the sick leave. Any period of sick leave must be justified by a medical certificate.

Who to contact

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Source: https://guichet.public.lu/en/entreprises/sante-securite/accident-maladie/incapacite-travail/continuation-salaire.html

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