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Employment, employee participation & pensions

New (emergency) measures will be introduced to protect employers and employees

Renate Vink-Dijkstra

19 March 2020 - 2 minutes reading time

The Dutch government has taken further emergency measures in order to keep the economy going and to secure jobs. The short-time work reduction-regulation (WVT) is inactivated and will be replaced by the Temporary Emergency Measure to Secure Business-regulation (Noodmaatregel Overbrugging voor Werkbehoud in Dutch). This new regulation will be implemented within the next few days, but some measures have already been announced.

Who is entitled to financial compensation from the Dutch government?

All entrepreneurs who expect a turnover loss of at least 20%, will be compensated for the costs with regard to continued salary payment for their employees. This applies to fixed-term employment contracts, permanent contracts and on-call contracts (such as zero-hours contracts and temporary workers).

Conditions for financial compensation

The company is entitled to financial compensation if it continues to pay the (full) wages of the employees and if it refrains from making any employee redundant for business reasons during the period for which the compensation has been awarded.

The amount of the compensation

The compensation amount is directly linked to the expected loss of turnover. In case of an expected 100% turnover loss, the compensation is limited to a maximum of 90% of the labour costs.

  • 100% loss of turnover: compensation of 90% of the labour costs:
  • 50% loss of turnover: compensation of 45% of the labour costs;
  • 25% loss of turnover: compensation of 22,5% of the labour costs.

Duration of the Temporary Emergency Measure to Secure Business-regulation

The compensation will initially be granted for 3 months, retroactively as per 1 March 2020 to 31 May 2020. The compensation can be extended (once) for another 3 months.

How does the new regulation work?

  1. The application must be submitted to UWV (Employee Insurance Agency Netherlands). Further explanation will follow as for the precise procedure;
  2. UWV will provide an advance of 80% of the expected compensation to the employer;
  3. The employers continues to pay the (full) wages of the employees (accrued unemployment rights will not be effected by this new regulation);
  4. The (actual) decrease in turnover will be determined afterwards and may lead to an adjustment to the compensation of the labour costs.

What if the company has already applied for the short-time work reduction-permit?

As mentioned before, the short-time work reduction-regulation (WVT) is inactivated and will be replaced by the Temporary Emergency Measure to Secure Business-regulation. If an employer has already submitted an application for a short-time work reduction-permit and not received the permit yet, the application will be transposed and dealt with under the new regulation. If an employer has already applied for the short-time work reduction-permit and has already obtained the permit, this permit will remain in force.

Renate Vink-Dijkstra and Guus Wife

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