Q&A COVID-19: Temporary emergency bridging measure to preserve employment

Due to the outbreak of the coronavirus, numerous companies have made use of the Reduction of Working Time (WTV) scheme. However, this scheme is not tailored to facilitate companies with regard to crises such as the coronavirus. Consequently, the scheme has been withdrawn and the Ministry of Social Affairs and Employment (SZW) has introduced an Emergency Fund for Employment Bridging (NOW).

With the support of the NOW, more employers can be financially compensated more quickly, by means of compensation for loss of turnover as of March 1, 2020.

SZW has published a Q&A, which contains answers to the most frequently asked questions regarding the NOW and the withdrawn of the WTV scheme. SZW will publish a policy to  explain the NOW further, hopefully in the upcoming weeks. We will keep a close eye on any and all developments and will update this document as soon as more information becomes available.

The current available information can be found here.

Can I still apply for Working Time Reduction?

No, that is no longer possible.

How long will my current Working Time Reduction remain in effect? In addition, if I have to renew, how does it work if there is another arrangement in in place?

If you already have been granted a permit for working time reduction, this permit will remain in force. However, an extension of the permit will not be possible. As soon as the term of work reduction permit lapses, the only scheme to be sought after is the NOW.

I have applied for Working Time Reduction through the dedicated website, but have not yet received an answer. Do I have to wait for an answer or do I have to take action in any other way?

You will receive a notification that your application has been received and that this application from then on will be considered an application for the NOW, instead of the Working Time Reduction scheme. If any information for the application under the NOW is missing, you will be able to supplement the request.

What does the new scheme for compensation of labour costs entail?

• A new regulation is introduced replacing the WTV scheme and not connected to the Unemployment Insurance Act (WW).
• Employers can apply for a substantial contribution towards wage costs and receive an advance from UWV.
• This allows the employers to continue paying employees with a permanent and a flexible contract.
• Initially, the contribution will be granted for a maximum period of 3 months. There will be a possibility of extension (possibly under other conditions) for another 3 months.

What are conditions to qualifying for a contribution towards labour costs?

• When applying, the employer commits to the obligation not to apply for dismissal on grounds of economic reasons for his employees during the period for which the allowance is received.
• The employer expects at least a 20% loss of turnover.

The scheme targets turnover decreases from 1 March 2020. The amount of contribution towards wage costs depends on the drop in turnover and is maximised at 90% of the wage bill. Below are some examples of how the drop in turnover and the amount of the allowance are connected:

• If 100% of the turnover is lost, the allowance amounts to 90% of the wage costs.
• If 50% of the turnover is lost, the allowance amounts to 45% of the wage costs.
• If 25% of the turnover is lost, the allowance will amount to 22.5% of the wage costs.

Based on the application, the Employee Insurance Agency (UWV) will provide an advance of 80% of the expected contribution. Afterwards it will be determined what the actual decline in turnover has been.

An audit report is required for applications exceeding a certain amount of the contribution, which is yet to be determined. After the allowance is formally determined, an adjustment could be made (ie if the employer had a higher or lower drop in turnover).

When can I apply for the NOW?

You cannot submit a request under the NOW yet. The government is working on guidelines and a webpage for the applications. The exact date when everything will be ready, will be announced as soon as possible. The period for which you can receive a contribution does not depend on this date. Loss of turnover as per 1 March 2020 will be eligible for compensation.

How do I submit an application for the new compensation scheme?

You submit the application to the UWV.

Can I also apply for a wage costs allowance for employees with a flexible contract?

Yes, that is possible. The new allowance scheme also applies to the wage costs for employees for whom the employer has no obligation to continue to pay wages (eg employees with an on-call contract). Temporary employment agencies can also apply for a contribution towards wage costs for temporary workers who work for them. This allows companies to survive during this difficult time without having to let such personnel go.

Can I submit a WTV application for circumstances other than coronavirus?

No, the WTV scheme has been withdrawn. You will also have to make use of the new scheme in the event of loss of turnover due to causes other than the outbreak of the coronavirus.

Questions and answers about the new employee benefit scheme

Will my wages continue to be paid if I fall within the scope of the NOW?

Yes, your wages are paid in full.

Do I use up my unemployment benefits if I receive a compensation under the NOW?

No, you do not use up your unemployment rights. The compensation scheme is considered a separate arrangement.

Do I have to provide data to be eligible for a compensation?

No, this is done by your employer. You do not have to do anything.

Do I have to stop working during the allowance?

This is not a to be eligible under the NOW. It is up to you and your employer if you will still have to perform work (from home or otherwise).