Government will reimburse up to 90% of your labour costs in the coming months

Developments and measures to deal with the corona crisis are occurring at a rapid pace. The reduced working times (WTV) scheme has been discontinued as a “coronavirus measure”. Instead, the cabinet is introducing the Temporary Emergency Bridging Measure for Sustained Employment (NOW) as a replacement.

The government will consult the Employee Insurance Agency (UWV) about the exact content and implementation of the NOW scheme, the main features of which are known. Below I will discuss the reason for cancelling the WTV scheme and answer key questions about the new emergency measure.

Why has the WTV scheme been discontinued?

The coronavirus outbreak has led to an unprecedented appeal to the WTV scheme by employers. To put it simply, the scheme is not geared to the consequences of the coronavirus outbreak. The government is keen to provide more employers with financial support and to do so more quickly than under the withdrawn WTV scheme. The cabinet is doing this through the new NOW compensation scheme.

Can I still apply for WTV?

Applying for (a permit for) WTV is no longer possible. If you have already been granted a permit for reduced working times, that permit will remain in force. If you use this permit, and then want to request an extension afterwards, you must use the new NOW scheme.

I already applied for WTV, but no permit has yet been obtained. What now?

The government will further inform each applicant about the further course of events. Your application for the now withdrawn WTV scheme will be considered an application for the new NOW scheme.

What is the new NOW scheme?

A new regulation will be introduced, apart from the exemption from reduced working times and the Unemployment Insurance Act (WW). An employer can submit an application for an allowance for salary costs and receive an advance from UWV. Employers can apply for the allowance for 3 months, with the possibility of extension (possibly under other conditions).

What conditions apply to a compensation for wages costs under the NOW scheme?

With the application, you undertake not to apply for dismissal for its employees for business reasons during the period for which the allowance is received. In addition, you should expect a turnover loss of at least 20%. The application is valid for a period of 3 months, which can be extended once by another 3 months. Different conditions may apply to an extension. They are not (yet) known at the time of writing this blog.

How much is the contribution towards wages costs?

The amount of the wages costs allowance depends on the actual loss of turnover. The government provides a maximum allowance of 90% of the wage bill. Based on your application, the UWV will provide an advance of 80% of the expected contribution. The actual decline in turnover will be determined afterwards.

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

At the time of writing, it is only known that your application must be submitted to the UWV. However, it is not yet possible to submit an application. The period for which you can receive a subsidy does not depend on when the submission of an application becomes possible. Loss of turnover from 1 March 2020 is eligible for compensation.

Can wages costs also be claimed for employees with a flexible contract?

The new allowance scheme also applies to the wages costs of employees for whom the employer has no obligation to continue to pay wages. Examples include employees with an on-call or zero-hours contract. Temporary employment agencies can also apply for compensation for temporary workers.

Do you have any questions or about the new scheme?

Both employers and employees are confronted with the consequences of the coronavirus and far-reaching measures by the government. After reading this blog, do you have any questions about the new emergency measure or other questions about the coronavirus and your company or your staff? Our employment and corporate lawyers are happy to help you!

This weblog was written in close collaboration with Seliz Demirci.