employment

News Update Employment

Update of 5 May 2020 to package of emergency measures for employers
07 May 2020
6 May 2020

In a parliamentary letter dated 22 April 2020, Minister Koolmees announced a number of changes to bring the scheme for the Temporary Emergency Bridging Measure for Sustained Employment ("NOW") more in line with practice.

Application of the NOW scheme to groups of companies

Under the current NOW scheme, the starting point for calculating the NOW subsidy for a group is the decline in turnover of the group as a whole.

In practice, however, it may be the case that the turnover of a particular operating company within a given group falls by more than 20%, while the activities of the other operating companies in the group continue (or even improve) and thus no fall in turnover of at least 20% appears at the group level. The operating companies in a group are not permitted to apply for the scheme on an individual basis. In the absence of internal solidarity between the operating companies and/or units within the group, this may still lead to redundancies at the individual operating company.

At the request of, among others, the Labour Foundation (a national consultative body comprising trade unions and employers' associations), the business community and trade unions, Minister Koolmees has decided to make it possible for individual operating companies within groups that suffer less than 20% loss of turnover to apply for the NOW subsidy based on the loss of turnover at the operating company in question. The operating company must have its own legal personality. Parts of legal entities, such as an autonomous participating interest, an establishment or a business unit do not qualify.

This loosening of the criterion is subject to additional conditions:
  • Groups that have an operating company making use of the scheme must declare that they will not pay any dividends or bonuses for 2020 or repurchase their own shares up to and including the date of the shareholders' meeting at which the financial statements for 2020 are adopted;
  • An operating company with 20 or more employees must conclude an agreement with trade unions on job retention at the operating company. In cases of operating companies with fewer than 20 employees, agreement by an employee representation body is sufficient. This ensures that there are guarantees in place that use of this exception is actually necessary for job retention within the groups of companies.
  • There must be no personnel company within the group. For such groups, the decrease in turnover at group level will always be taken as a starting point. After all, that is the level at which the drop in turnover and the deployment of personnel come together.

Additional audit safeguards will be worked out in more detail in the standards for auditors.

The amendment to the NOW scheme will be published during the course of next week. Once the amendment enters into force, applicants will be able to apply to the UWV Employee Insurance Agency on the basis of this special possibility.

Flexible workers and seasonal work

Minister Koolmees indicates in his letter that his ministry is exploring the possibilities for an additional safety net for flexible workers and a separate scheme for seasonal work.

In a number of urgent cases that are specifically linked to the season, such as flower cultivation and the cultural sector, a number of specific measures have already been taken by linking up with existing data or subsidy flows.

Overtime and contribution differentiation

Since 1 January, employers have been paying a low unemployment insurance (WW) contribution for permanent contracts and a high WW unemployment insurance contribution for flexible contracts under the Balanced Labour Market Act (Wab). In line with this, the Social Insurance (Funding) Act (Wfsv Decree) stipulates that employers must pay the high WW unemployment insurance contribution retroactively for permanent employees who have worked more than 30% overtime in a calendar year. The provision that the high unemployment insurance premium must be paid for permanent employees who have worked more than 30% overtime in a calendar year will be suspended for all employers for 2020.

Reduction in working hours and work permits

In connection with the coronavirus measures, a group of employers have been granted a reduction in working hours under the (since expired) Reduction in Working Hours (WTV) scheme. This may pose a problem if the minimum salary is a condition under which a third country national may work in the Netherlands without a work permit or combined permit, for example, for a highly skilled migrant. The Social Affairs and Employment Inspectorate has indicated that in these situations the law will temporarily not be enforced.

Update of 5 May 2020

Amendments to the NOW scheme entered into force on 5 May 2020.

These include an amendment to the condition that no personnel company may be present within the group, which was contained in the letter to the House of Representatives of 22 April 2020.

A legal entity or company must not have more than half of its business activities consist of making workers available within the group. This clarifies that a personnel company may not apply for a NOW subsidy for the benefit of the management. Other operating companies within the group may, however, apply at operating company level if they meet the other conditions.

The other amendments are:
  • The NOW applicant automatically agrees to the disclosure of data relating to the NOW application within the framework of the Government Information (Public Access) Act (Wet Openbaarheid van Bestuur, WOB).
  • Employers with a non-Dutch SEPA bank account number no longer need to provide a Dutch bank account number.
  • The obligation to notify the wage cost subsidy has been dropped.
Written by:

Key Contact

Amsterdam
Advocaat | Managing Partner
+31 20 605 61 86
+31 6 5373 9632
Rixt de Vries

Key Contact

Amsterdam
Advocaat | Partner
+31 20 605 69 00
+31 6 2248 0662