News Update Employment

18 March 2020

On 16 March, we updated you on the Reduction of Working Hours Scheme. On 17 March, the government cancelled the Reduction of Working Hours Scheme and announced the temporary Emergency Bridging Measure to Preserve Employment (Noodmaatregel Overbrugging voor Werkbehoud or NOW).

The NOW is better tailored to the far-reaching consequences of the coronavirus outbreak for Dutch companies and organisations. The NOW can give employers faster and more suitable financial help than the cancelled Reduction of Working Hours Scheme. What’s more, a larger group of employers have recourse to the NOW.

What does the NOW entail?

Currently, the implementation and drafting of the NOW is being worked on, but the main elements are known:

• The NOW has been detached from the Unemployment Insurance Act, which makes an application easier and means that no employee rights under the Unemployment Insurance Act are used.
• Employers continue to pay 100% of wages to the employees concerned.
• Employers can apply for an allowance towards the wage costs. The amount of the allowance is not more than 90% of the wage bill and depends on the extent of the employer’s decline in sales.
• Based on the application, the Dutch Employee Insurance Agency (the UWV) will pay an advance on the allowance (in any event 80% of the amount). Afterwards, it will be determined what the real decline in sales has been. An audit report is required for applications exceeding a certain amount of the allowance. This amount still has to be decided.
• With the allowance for wage costs, employers can also continue to pay employees with a flexible contract (including stand-by contracts).

What are the criteria to qualify for the NOW?

• When employers apply for an allowance under the NOW, they undertake not to apply to dismiss employees for commercial reasons during the period that they receive the allowance.
• The employer expects a loss of sales of at least 20% as from 1 March 2020.
• The allowance can be applied for a period of three months, with the possibility to extend this period by another three months. The extension may be subject to further conditions.

What happens to my current permit under the Reduction of Working Hours Scheme or my application for this permit?

Issued permits for a reduction of working hours remain valid. If an employer wishes to extend the permit after its expiry, the NOW must be used. Current applications for a reduction of working hours will be changed to applications for the NOW. In those cases, additional information will be requested.

Where and when can I apply for the NOW?

An application must be submitted to the UWV. This is not yet possible. It will be announced when the measure becomes effective and when applications can be submitted. Loss of sales suffered as of 1 March 2020 will qualify for compensation under the NOW.

All other and most recent information currently available, can be found in a Q&A on the government’s website.

Other news: differentiation in contributions

As a result of the differentiation in contributions which was introduced this year, employers must not only pay a high unemployment insurance contribution for employees on flexitime, but also for permanent staff who worked more than 30% overtime in a calendar year. This has an undesirable effect in sectors where a lot of extra overtime work is required due to the coronavirus. The minister of social affairs and employment has announced that some adjustments will be made.

The minister announced in December 2019 that employers must agree on an addendum before 1 April 2020 to qualify for the lower unemployment insurance contribution for permanent staff who at some point tacitly secured a contract for an indefinite period of time. This addendum must be signed by the employer and the employee, and included in the employer's payroll accounts.

Because it will not be possible for all employers to meet this condition in the coming weeks, the deadline has been extended to 1 July 2020.