Last night, the Dutch government announced that the current special regulations for reduction in working hours (regeling werktijdverkorting) will be replaced by the Temporary Emergency Measure Job Security (Tijdelijke Noodmaatregel Overbrugging voor Werkbehoud - NOW) with immediate effect. The reasons for implementing this temporary measure are the following: over the past few weeks, the outbreak of the coronavirus caused a run on the earlier scheme, which proved insufficiently suitable to meet the profound consequences of the outbreak, and the government wants more employers to be able to seek financial aid.
The special regulations for reduction in working hours have been withdrawn. It is no longer possible to file applications under the scheme. All granted applications for reduction in working hours will remain in effect. Employers seeking extension of a granted application will need to file new applications under the NOW.
For a three-month period, employers expecting turnover losses of at least 20% may apply to the Employee Insurance Agency (UWV) for a wage cost allowance of up to 90% of the wage sum. The actual percentage depends on the turnover loss; a 100% turnover loss entitles the applicant to a 90% allowance, which drops to 45% at a 50% expected turnover loss and to 22.5% at a 25% turnover loss.
If necessary, the subsidy period may be extended by another three months. On the basis of the information currently available, the terms for the extended subsidy period may differ from those applicable to the initial subsidy period.
The UWV will provide an advance payment of 80% of the amount requested. The actual turnover loss will be determined retroactively and the allowance adjusted as necessary. The NOW scheme enables employers to continue to pay their employees’ wages, including employees with flexible contracts, such as zero-hour workers. Grant of the allowance is subject to the condition that throughout the subsidy period no employees may be dismissed for economic reasons. Subject to conditions yet to be determined, applicants will be required to submit an auditor's report.
Unlike the earlier scheme, the NOW scheme also provides for an allowance in the wage costs for flexible contracts. This is a key difference. The NOW subsidy does not prejudice any unemployment benefit rights accrued. All salaries and wages will continue to be paid in full. In conclusion, the NOW scheme does not require the employees concerned to stop working or to stay at home.
The NOW scheme will be implemented as soon as possible. It is no longer possible, with immediate effect, to file new applications with the Ministry of Social Affairs and Employment under the previous regulations for reduction in working hours. All applications filed but not yet processed will be processed under the new NOW scheme. Employers can apply for the allowance for a drop in turnover with retroactive effect from 1 March 2020.
As soon as more details of the scheme are made public, AKD will share these details with you.