Coronacrisis: Reduce working hours? (REPLACED BY ‘NOW’)13-3-2020
(PLEASE NOTE: the option to apply for a permit to reduce working hours has been replaced by a temporary emergency measure to compensate salary costs. Check our LinkedIn post and the Update below.
In exceptional circumstances, on the website of the Ministry of Social Affairs and Employment (SZW), employers may request for permission to apply the regulations on reduction of working hours when they are temporarily unable to provide their employees with work or in case of a temporary reduction of work. The circumstances surrounding COVID-19, the new coronavirus, can be a reason to request for a permit to apply this regulation. If the permit has been granted, an employer may temporarily reduce its employees’ working hours. The employer does not have to pay the employees for the lost working hours.
Wat does reduction of working hours mean?
To compensate for the employees’ loss of income, an employer can apply for unemployment benefits (WW-uitkering) for the hours employees are not working anymore due to the reduction. However, employees will likely experience a loss of income anyway: the unemployment benefits are based on a percentage of their salary (first 75% and later 70%) and are maximized to the maximum monthly wage (€ 4,769.34 gross excl. 8% holiday allowance in 2020). Not all employees will be eligible for unemployment benefits, for instance in case they have only recently started working.
Employers can opt to supplement the employees’ salary to 100%. Sometimes, mandatory collective labor agreements or other company regulations oblige employers to supplement the salaries up to 100%.
In principle, the permit applies to all employees who are entitled to continued salary payments. Sick employees however are excluded; they are unable to work and because of this, they are not eligible for unemployment benefits. The regular obligation for the employer to pay salary during sickness remains to apply. On-call workers with a zero-hour contract are also excluded from application of the permit.
What are the conditions?
First, employers have to apply for a permit at the Ministry of SZW. Employers will receive such permit if:
- their business has to deal with exceptional circumstances, which cannot be seen as normal business risk such as the coronacrisis; and
- they expect to have at least 20% less work for a period of 2 to 24 weeks.
If the employer receives the permit, he must inform the UWV by submitting the form ‘Melding werktijdverkorting’. Subsequently, the employer can apply for the unemployment benefits by submitting the form ‘Aanvraag WW-uitkering bij Werktijdverkorting’. A permit is valid for 6 weeks from the day of application. If the situation in their company does not improve, employers can apply for an extension of the permission after this initial period up to a maximum of 24 weeks.
The permit is in any case not granted:
- over the period prior to the date the ministry of SZW has received the application;
- if more employees are employed than necessary to maintain the company’s expected requirements;
- if there is less work due to a strike.
Update: On 17 March 2020, the Dutch government has introduced a temporary measure called Tijdelijke noodmaatregel overbrugging werkgelegenheid (NOW). Simultaneously, the regulation regarding reducing working hours has been revoked with immediate effect. Employers who qualify for the measures laid down in the NOW measure can apply for compensation of up to 90% of their salary costs over a period of 3 months. Flex workers are also covered by the NOW measure. The Ministry of SZW will automatically convert all applications regarding reducing working hours to an application for the NOW measure. New applications for the NOW measure can be made with the UWV shortly.
We will keep you informed on our LinkedIn page (mostly Dutch) as well as our website. On Business.gov.nl (English) you can find more general information on this topic.