The Netherlands: Emergency Fund Bridging Employment Replaces the Working Time Reduction Scheme

As previously discussed, the coronavirus outbreak has led to an abundance of employer applications to the Ministry of Social Affairs and Employment for permits to reduce their working hours (Werktijdverkorting, or WTV). On March 17, 2020, however, the cabinet revoked the WTV program. The new temporary measure Emergency Fund Employment Bridging (“NOW”) replaces the WTV.

NOW provides a wage cost subsidy to employers that have seen significant decreases in their revenue since March 1, 2020. Employers can submit a NOW application through the Dutch Employee Insurance Agency, the UWV. The start date will be announced as soon as possible.

What triggers NOW benefits, and how much can an employer receive?

Under NOW, employers that expect at least a 20% loss of revenue due to the coronavirus can receive a contribution towards their wage costs. An employer can recoup up to 90% of its wage costs depending on the loss in revenue. Below are some examples:

  • Employers experiencing a 100% loss of revenue can recevie a benefit equal to 90% of its wage costs.
  • Employers experiencing a 50% loss of revunue can receive a benefit equal to 45% of its wage costs.
  • Employers experiencing a 25% loss of revunue can receive a benefit equal to 22.5% of its wage costs.

UWV will provide an advance of 80% of the compensation requested in the application. Depending on the actual decrease in revenue, the UWV will determine and adjust the final compensation afterwards, in which it might require an audit to make the final assessment.

The allowance period is three months and may be extended once for an additional three months.

In the NOW application, the employer must commit to not laying off its employees for economic reasons during the compensation period.

NOW also for flex workers

Unlike the WTV, NOW applies also to flex workers such as on-call and temporary workers, provided they are not dismissed. In this way, NOW (also) protects these flex workers.

Full payment of wages

As previously explained, the obligation to continue to pay wages for employers in the event a WTV permit was granted expired under the new Regulation on Unworkable Weather that came into effect on January 1, 2020. The statement made by the government that employees “would notice little from WTV and receive their usual wages” was in conflict with this Regulation. The government seems to have closed this “loophole” with the introduction of NOW. Under NOW, employers continue to pay their employees’ wages in full. Employers are (partially) compensated for this via the aforementioned advance from the UWV.

No link to unemployment benefit and no work obligation

Contrary to WTV, NOW is not linked to the employee’s unemployment benefits. The NOW compensation is therefore not at the expense of the unemployment benefits the employee accrues.

Continuing to work, whether or not from home, is not a precondition for compensation under NOW. 

And the WTV Regulations?

Applying for WTV is no longer possible. Employers are also dependent on NOW for loss of revenue due to causes other than the coronavirus.

There are three scenarios for existing WTV applications:

  1. The WTV license has already been granted: the WTV scheme applies during the licensed period. Renewal goes through NOW.
  2. The WTV application was rejected: a NOW application is possible;
  3. The WTV application has been submitted but has not yet been processed: the application is considered a NOW application. The petitioners are asked to provide additional information.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.