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INTRODUCTION OF TEMPORARY EMERGENCY BRIDGING MEASURE FOR JOB RETENTION: A SIGNIFICANT REDUCTION IN LABOUR COSTS OF DUTCH EMPLOYERS AFFECTED BY CORONA

crisis

As mentioned earlier, Dutch companies coping with financial problems as a result of the spread of the coronavirus may apply for a permit as to a reduction in working hours at the Ministry of Social Affairs and Employment. By means of a reduction in working hours, non-worked hours are paid by the UWV (“Uitvoeringsinstituut Werknemersverzekeringen”) as unemployment benefit (“WW-uitkering”). Last night, the Dutch Government announced an even more comprehensive compensation regulation. As a result, it is no longer possible to apply for the reduction of working hours permit. Applications that have already been submitted will be dealt with under the new scheme.

The Temporary Emergency Bridging Measure for Job Retention
The Government announced the introduction of a modified reduction in working hours regulation, the so-called ‘Temporary Emergency Bridging Measure for Job Retention’. The regulation will be introduced with retrospective effect from 1 March 2020. The new regulation is part of the measures in the support package for companies affected by the corona-crisis. The new regulation differs from the existing reduction in working hours scheme in the following respects:  

  1. The possibilities for employers to apply for the fund will be considerably broadened.
  2. In order to qualify for the compensation, the employer must expect a loss of turnover of at least 20%.
  3. Employers will not be compensated up to a maximum of 75% of the maximum daily wage, but up to a maximum of 90%. The final percentage depends on the loss of turnover.
  4. The compensation will also apply to employees with a 0-hour contract and on-call employees.
  5. The compensation is granted for 3 months, which period may be extended with another 3 months.
  6. Employees may not be dismissed for economic reasons during the subsidy period.

Supplementing unemployment benefit up to 100% of the salary
There is lack of clarity as to whether the unemployment benefit should be supplemented up to the full salary level in case of a reduction in working hours.[1] However, as a result of the introduction of the new regulation and the increase of the maximum percentage of compensation, this discussion has lost some of it importance. Be that as it may, the Minister of Social Affairs and Employment indicated during an interview that was broadcasted by the television programme ‘Nieuwsuur’ that employers are obliged to continue to pay the full salary in the event that they appeal to the emergency fund.  

[1] The recent Unworkable Weather Regulation states that the employer is exempted from the obligation to continue to pay wages, while the Ministry of Social Affairs and Employment has so far given the impression that the employer must continue to pay wages in full during the term of the reduced working hours permit.

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