The COVID-19 coronavirus is having an effect on businesses in the Netherlands. Your business's work or turnover may decline considerably as a result.
In recent days, numerous employers have submitted applications for short-time working. However, this scheme was never intended to be used for the unprecedented reduction in work which is now occurring. The government has therefore withdrawn the Short-time Working Scheme [Regeling Werktijdverkorting] (wtv) with immediate effect and introduced a new temporary measure on 17 March 2020 called the Employment Bridging Emergency Fund [Noodfonds Overbrugging Werkgelegenheid] (NOW). This scheme is now being worked out in more detail.
The main themes of the scheme are already known and are discussed in this alert.
NB: At the moment it is not yet possible to submit an application for compensation on the basis of the NOW to the Dutch Employee Insurance Agency [Uitvoeringsinstituut Werknemersverzekeringen] (UWV) and it is not yet known when the UWV is actually going to introduce the scheme
1. The Employment Bridging Emergency Fund
This new scheme makes it possible to provide financial compensation to more employers in order to prevent unemployment. The government also intends to provide this financial compensation faster than would have been the case within the framework of the withdrawn Short-time Working Scheme. The application procedure is to be made much simpler and the scheme will not have a negative effect on employees' rights under the Unemployment Insurance Act because the compensation scheme is entirely separate. The compensation helps with the wage costs of permanent employees and employees with a flexible contract.
2. Conditions for compensation on the basis of the Employment Bridging Emergency Fund
In order to be eligible for compensation on the basis of the Employment Bridging Emergency Fund, the following conditions must be met:
• the employer expects at least a 20% loss in turnover;
• the drop in turnover occurred during the period since 1 March 2020;
• the employer is not allowed to apply for staff redundancies on the grounds of business economic reasons during the period for which the compensation is received.
3. Term of the compensation
The compensation applies for a period of 3 months, which can be extended on a one-off basis by a further 3 months (the extension can be made subject to further conditions).
4. Amount of the compensation
The amount of the compensation for the wage costs depends on the decline in turnover and will not exceed 90% of the wage bill.
If the employer loses 100% of its turnover, the compensation will be 90% of the wage bill. In the event of 50% less turnover, the compensation will be 45% and in the event of 25% less turnover, the compensation will be 22.5%. The employer will pay the wages of the employees involved in full during the period that the compensation is provided. The UWV will issue an advance amounting to 80% of the expected compensation. An assessment will be made retroactively of the actual decrease in turnover and that will provide a basis for determining the definitive amount of the compensation. Once the compensation has been definitively determined, an adjustment will take place in the event of a decrease in the wage bill.
5.What should you do if you have already submitted an application for short-time working?
1. You had already applied for and received a short-time working permit.
Your short-time work permit will continue to apply. Although it is not possible to extend this permit, when it is time to extend it you can instead use the new NOW scheme.
2. You had already applied for a short-time working permit but the application was rejected.
You can submit a new application on the basis of the new NOW scheme.
3. You had already applied for a short-time working permit, but had not yet received a response.
Your application will be regarded as an application for the new NOW scheme. You will receive notification about the additional details you have to submit.
6. When can you submit an application for the NOW scheme?
At this point in time you cannot yet submit an application to the UWV. We are working hard on changing this as soon as possible. The exact date will be made known at the earliest opportunity. The period during which you can receive compensation does not depend on this date. The compensation is available for turnover lost from 1 March 2020 onwards.
7. Questions?
Please let us know if you have any questions about the compensation based on the Employment Bridging Emergency Fund. We would be only too pleased to help. If you have any questions, please contact us via the email address: coronavragen@nysingh.nl.
