Entitlement to continued payment of remuneration and prerequisite

Continued payment of remuneration – entitlement and prerequisiteAugust 2017 – Employees who are incapacitated for work are generally entitled to have their remuneration continued to be paid by the employer for six weeks. We clarify the legal basis and explain what needs to be taken into account in payroll accounting.

It was not always as self-evident as it is today that a sick or injured employee has a secure claim to continued payment of his or her wages. A uniform legal basis for this has only existed since 1994. Since then, the entitlement to continued payment of wages (continued remuneration) has been regulated in a separate law, the Continuation of Remuneration Act (EFZG).

The prerequisites

– The EFZG entitles an employee to continued payment of wages for a period of six weeks. Three conditions apply: – The employee must be prevented from working due to illness, – The employee must not be at fault. – The employment relationship must have existed for at least four weeks.

With regard to continued payment of wages, blue-collar workers, white-collar workers and trainees are treated equally. There are also no deviations for mini-jobbers. An exception exists only for home workers. Differences between the old. New federal states do not exist.

Collective bargaining agreements or employment contracts may contain provisions that deviate from the statutory requirements. However, these must be more favorable for the employee.

A question that is often decisive in practice: Is there actually an inability to work?? You can read more about this below.

The six-week period

Anyone who is ill and unable to work or is in a hospital, preventive care or rehabilitation facility is entitled to 6 weeks' continued payment of remuneration. This corresponds to 42 consecutive calendar days. The number of working days as well as Sundays and public holidays are not taken into account. The entitlement to continued payment of wages ends with the expiry of the 42nd day of incapacity for work. Calendar day, even if the incapacity for work persists.

In principle, the following applies: If the employee leaves his workplace due to illness, the time limit does not begin to run until the following day. If the employee calls in sick before starting work, this day must be included in the entitlement period.

The amount of the continued payment of remuneration

The amount of continued remuneration corresponds to what the employee would have received in wages or salary had he not become incapacitated for work. If a collective agreement increase falls within this period, then this must be taken into account. However, collective bargaining agreements often stipulate average earnings. In addition, bonuses (risk, hardship, night, Sunday or public holiday bonuses) and capital-forming benefits must be taken into account if they have been granted by the employer.

If employees regularly work overtime beyond the collectively agreed or company working hours, this must also be taken into account. This was established by a ruling of the Federal Labor Court (21.11.2001 – 5 AZR 457/00). In this case, the regular working time must be calculated on the basis of the average for a reference period of 12 months before the beginning of the incapacity for work.

On the other hand, reimbursement of expenses, travel allowances or dirty work allowances are not taken into account.

In the case of short-time work, the continued payment of wages is reduced to the short-time wage (§ 4 para. 3 EFZG).

Wage tax and social security in the case of continued payment of remuneration

Wages paid as part of continued remuneration are not treated differently from normal wages with regard to wage tax and social insurance – with one important exception:

If supplements for work on Sundays, public holidays or at night are included in the continued payment of remuneration, they may not remain tax- and contribution-free. The tax exemption only applies to work actually performed on Sundays, public holidays and at night.

Waiting period: When the claim arises

An entitlement to continued payment of wages only arises after four weeks of uninterrupted duration of the employment relationship (§ 3 para. 3 EFZG). This waiting period can be shortened in favor of the employee by collective agreement or in a company agreement.

If the employee has started his job, but then falls ill before the end of the four-week waiting period, he receives sick pay from his health insurance fund until the end of the waiting period.

The situation is different if the employee is unable to take up his new job because he falls ill or suffers an accident. In this case, the waiting period begins on the day of the agreed start of work. Thus, the entitlement to continued payment of remuneration only applies from the fifth week, provided that the employment contract had already been concluded before the beginning of the incapacity for work.

When does the entitlement end?

In the vast majority of cases, the entitlement to continued payment of wages ends on the last day of employment, irrespective of whether the employee is still on sick leave beyond this day or not.

However, there are two exceptions to this principle (Section 8 EFZG:)

– If the employee is dismissed due to incapacity for work – in the event of an – effective and justified – extraordinary dismissal by the employee

In practice, dismissal for personal reasons due to incapacity for work is often complicated anyway. In this case, the employer is also obliged to continue paying wages for up to six weeks after the end of the employment relationship.

When is incapacity for work present?

"Being sick" and "being unable to work" do not always automatically mean the same thing in every case. On closer inspection it quickly becomes clear why.

"Incapacitated for work" means that the employee is no longer able to perform his or her job due to health problems. Whether this is the case must be decided by the doctor. The basis for this is the incapacity for work guideline, which is developed by the Federal Joint Committee (AU-RL).

The medical decision depends on the type and severity of the illness and the general condition of the patient, i.e. on the individual case. Another important criterion is the type. Requirements of the occupational activity. A sprain of the little finger is no further hindrance in many professions. A violinist is temporarily incapacitated for work as a result.

Even when the employee feels fit, he or she may be unable to work – then, for example, if he or she could infect his or her colleagues or if the illness would worsen with further work load.

Work accident?

The entitlement to continued payment of wages also exists if the employee is unable to work due to an accident at work. In this case, it is the employer's responsibility to inform the relevant employers' liability insurance association without delay in order to ensure entitlement to continued payment of remuneration. If the employee fails to report the incapacity for work, he must pay the wage compensation himself, otherwise the Employer's Liability Insurance Association would step in.

No continued payment of wages in the event of self-inflicted illness

The employee is entitled to continued payment of wages only if the illness was not self-inflicted. Own fault is present, if the employee disregarded the duties of care, which a reasonable person would already follow out of his own interest.

An example would be injuries caused by a car accident in which the driver was not wearing a seat belt. If he would have avoided these injuries if he had worn a seat belt, he is not entitled to continued payment of wages during his recovery.

There is often a fine line between "self-inflicted or not" and "sick leave"?" must be taken. Two further examples:

– Particularly problematic are cases in which a drug or alcohol addict has been abstinent for a long time after withdrawal, but then relapses and becomes ill and unable to work. In such cases, social judges often find that the employee was at fault. – There is no doubt about self-infliction if the employee starts a fight in a beer tent and is injured in the process. The situation is different if the employee only defended himself in order to protect himself and others.

Continued payment of wages for accident at work during secondary employment?

In principle, the same rules apply to continued payment of remuneration after an accident at work in a secondary occupation as to other accidents at work: It depends on the individual case.

It can get complicated if the employee has a second job, is injured there and therefore cannot work in his main job. Is he then entitled to continued payment of wages against the main employer? And this also applies if the secondary activity is particularly dangerous?

In a case decided by the Hamm Regional Labor Court (08.02.2006 – 18 Sa 1083/05) an employee had cut down trees in his part-time job and was the victim of a serious accident in the process. In principle, such a particularly dangerous and injury-prone activity leads in case of doubt to the fact that there is no entitlement to continued payment of remuneration. In the specific case, the courts nevertheless affirmed the claim because the injured person was a trained forestry worker with many years of professional experience. The fact that the sideline job was not approved did not change anything.

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