The Dutch government has implemented some necessary but drastic measures to prevent the spread of Covid-19. These measures have inevitable consequences for everyone, also for employers and employees. Although the legal consequences of the measures introduced can be significant, there are several options available for you, on which we wish to inform you by means of this alert.
Within our global Baker McKenzie network we in the meantime gained significant experience and had the chance to establish thorough work products in respect of the above, not only relating to the Netherlands but all countries globally. Please do not hesitate to contact us if you would like to receive more information about the employment aspects of the consequence of Covid-19. For instance, if you would like to know whether there are possibilities to discontinue salary payment? Or if you would like assistance with an application based on the Temporary Emergency Measure for Work Retention (in Dutch: Tijdelijke noodmaatregel overbrugging voor werkbehoud (NOW)), on the basis of which your company could be entitled to a compensation of the wage sum up to 90%.
What does the Temporary Emergency Measure for Work Retention scheme (in Dutch: Tijdelijke noodmaatregel overbrugging voor werkbehoud (NOW)) entail?
In the government's new package of measures, the working time reduction scheme has been replaced by the NOW. Employers can apply for a substantial compensation towards the wage costs, up to 90% if the wage sum. The compensation also applies to employees with a permanent, flexible and on-call contract.
Which conditions must be met in order to qualify for the NOW?
There are two conditions:
- The employer commits not to apply for dismissal on business-economic grounds for its employees during the period for which the compensation is being received.
- The employer expects at least 20% loss of turnover as of 1 March 2020.
For how long does the compensation on the basis of the NOW apply?
The compensation is applicable for a period of three months. This period can be extended once for three months (other conditions may be imposed for this extension).
What is the level of the compensation?
The amount of compensation depends on the percentage of decrease in turnover, but in any event is no more than 90% of the wage sum. Please find some examples below of correlations between the decrease in turnover and the amount of the compensation for wage costs:
- in case of a loss in turnover of 100%, the compensation amounts to 90% of the employer's wage sum;
- in case of a loss in turnover of 50%, the compensation amounts to 45% of the employer's wage sum;
- in case of a loss in turnover of 25%, the contribution is 22.5% of the employer's wage sum.
On the basis of the application, the Dutch Labour Authority (in Dutch abbreviated as: UWV) will provide an advance payment equal to 80% of the expected compensation. The actual loss in turnover will only be determined in retrospect.
What can I do if my employee cannot work because daycares and schools are closed?
The employee could be asked to take up emergency leave, which is limited to a number of days. If the employee is unable to arrange childcare within a number of days and cannot work from home, the employee could take up parental leave. The latter amounts to 26 times the weekly working hours and is unpaid. If the employee's child is ill, the employee has the option of taking short-term care leave. Also, it is possible to enter into a discussion with the employee about (partly) taking days' holiday. A reasonable solution will also depend on whether the employee can actually work from home in a productive manner.
As an employer, should I take care of a workplace from home?
Due to the Covid-19 outbreak in the Netherlands, employees have to work from home as much as possible. This results in several questions, for instance if employees can take home office equipment or whether the employer is required to compensation the costs for a home workplace.
What consequences does it have for the unemployment insurance-premium differentiation if I fail to arrange for a signed addendum or employment contract before 1 April 2020?
On 9 December 2019, the Minister of Social Affairs and Employment reported that employers were given until 1 April 2020 to draw up a permanent employment contract in writing, in order to meet the conditions for the low unemployment insurance contribution. Because it will not be practically possible for all employers to meet that condition in the coming weeks, this period will be extended until 1 July 2020. The leniency regime, which applies to employees who were employed for an indefinite period of time no later than 31 December 2019, will therefore apply until 30 June 2020.
We are happy to assist you in these turbulent times. Do you need help with a NOW application, for example? Or would you like to know how to deal with an employee who indicates that he is unable to work because there is no childcare? We are happy to assist and identify any alternatives for you.