News flash! Emergency Fund Bridging Employment replaces the Working Time Reduction Scheme

The cabinet revoked the Working time reduction scheme (“WTV”) last night. The coronavirus outbreak has led to an abundance of WTV applications. The new temporary measure Emergency Fund Employment Bridging (“NOW”) replaces the WTV.

NOW targets decreases in employer revenu (in Dutch: omzet) as from March 1, 2020. Employers can submit a NOW applicatino through the Dutch Employee Insurance Agency, the UWV. The start date will be announced as soon as possible.

three (3) months maximum 90% compensation for wages and at least 20% loss of revenue

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

  • 100% loss of revenue → 90% compensation;
  • 50% loss of revenue → 45% compensation;
  • 25% loss of revenue → 22.5% compensation.

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 (3) months and may be extended once for an additional three (3) months.

In the NOW application, the employer must commit to not laying off its employees for business economic reasons (in Dutch: bedrijfseconomische omstandigheden) during the compensation period.

NOW also for flex workers

Unlike the WTV, NOW also applies 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 explained in our previous blog, 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 1 January 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 the NOW for loss of revenue due to causes other than the corona virus.

There are three (3) 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.

Eric van Dam & Wouter Engelsman