As an employer, you are obliged to continue paying the wages of a sick employee for 104 weeks. After this period, the obligation to continue paying wages ends. For a long time it was assumed that the accrual of vacation days also stops, but recent case law shows that this is not so black and white. Judges have varying opinions as to whether employees continue to accrue vacation days after two years of illness. This uncertainty can lead to an unnecessarily high final settlement for employers. This article tells you what steps you can take to avoid this.

Accrual of vacation days

In the Netherlands, the accrual of vacation days is linked to the right to wages. If there is no right to wages, the employee does not accrue any vacation days. This means that under Dutch law, a sick employee no longer accrues vacation days after the continued payment of wages obligation.

However, the Dutch regulation is not fully in line with European law. In European law, vacation accrual is linked to the performance of work, without making a distinction between employees who work and employees who cannot work due to illness. Employees therefore argue that vacation accrual continues even after 104 weeks of illness as long as the employment continues. Whether this is true in practice, however, is unclear, as subdistrict courts make different rulings on this issue.

Recent Case Law

In August 2025, the Gelderland subdistrict court ruled that European law must be followed. In this case, the salary continuation obligation ended on March 1, 2024, while the employment contract continued until August 12, 2025. Because employment continued, the employee accrued vacation days until the termination date, which were to be paid out at the end of employment. This resulted in a higher final bill and thus additional costs for the employer.

In fact, the North Netherlands subdistrict court recently ruled in favor of the employer. In this case, the salary continuation period ended on Nov. 8, 2023, and employment ended on April 30, 2025. The employee claimed to have accrued 238.35 vacation hours during this period, but the subdistrict court ruled that vacation accrual stops as soon as the wage continuation obligation ends. This judgment is consistent with an earlier ruling by the Roermond subdistrict court in 2017.

The varying case law makes it difficult for employers to determine whether vacation accrual continues after the end of the wage continuation period. Until the Supreme Court or the legislature rules on this, this uncertainty will remain.

Tips for employers

Even if the legal situation has not yet fully crystallized, as an employer you can act now to mitigate risks. By starting the termination process early, you will avoid unnecessary costs and legal problems, such as continuing to accrue vacation days after 104 weeks of illness.

To do so, follow the steps below.

Step 1: Engage with the employee in a timely manner

Schedule a meeting with the employee no later than six weeks before the end of the wage continuation period. Discuss whether the employee is willing to enter into a settlement agreement.

Does the employee agree?
If so, make sure that the end date of employment is as soon as possible after the end of the wage continuation and notice period. In the settlement agreement, lay out clear agreements on:

• the end date of employment;
• the transition allowance;
• open vacation days.

Step 2a: No agreement? Request a dismissal permit from UWV in a timely manner

Is the employee not cooperating with a settlement agreement? If so, request a termination permit from the UWV as soon as possible.

Keep the following in mind:

• The UWV usually decides within about four weeks.
• You need a statement from the company doctor showing that the employee will be unable to work within 26 weeks.
• This statement should not be older than three months when submitted.

Therefore, once it is clear that the employee does not want to enter into a settlement agreement, it is important to schedule an appointment with the company doctor immediately.

Step 2b: Terminate the employment contract

After receiving the termination permit, you can terminate the employment contract. Keep in mind:

• the statutory notice period;
• the obligation to pay the transition fee.

Don’t forget:
After termination of employment, you must request compensation for the transition allowance from the UWV in a timely manner. If you do this too late or the substantiation is incorrect, you run the risk that (part of) the severance pay will not be compensated. This is another reason why it is important to start the termination process on time. The longer the employment continues, the higher the severance pay can become, while only the severance pay as calculated as of the end of the waiting period is eligible for compensation.

Need help?

Terminating employment after 104 weeks of illness requires care. Drafting a settlement agreement or applying for a termination permit is legally complex.

The attorneys at Wessel Van der Lans support employers to properly manage the termination et contract of a sick employee. Contact us for a clear strategy and practical guidance every step of the way.