THE WORKING TIME REDUCTION HAS BEEN WITHDRAWN BY THE DUTCH CABINET

23/03/2020

 

The Working Time Reduction (WTV= Werktijdverkorting) scheme has been withdrawn due to the "corona measure". What measure will replace it?

The Dutch Cabinet has introduced the temporary Emergency Measure Bridging for Retention of Work (NOW).

 

Why is the Working Time Reduction (WTV) scheme withdrawn as a measure?

The outbreak of the coronavirus has led in recent weeks to an unprecedented appeal for the Reduction of working hours scheme for employers. This scheme is not designed to deal with the far-reaching consequences of the corona outbreak for Dutch companies and organizations. That is why the WTV has been withdrawn.

The Cabinet would like to compensate more employers financially and wants to carry out this in a very short time through the new compensation scheme. Therefore, WTV scheme has been withdrawn.

 

Is it possible for the employer to apply for Working Time Reduction?

It is no longer possible for employers to apply for Working Time Reduction. If the employer has already been granted an allocation for working time reduction, this permit will remain in force. If the employer uses the permit for working time reduction and wants to extend it afterwards, the employer must use the temporary Emergency Measure Bridging for Retention of Work (NOW).

If the employer already applied for WTV before the NOW has entered into force, but the application has not yet been processed, in that case UWV will treat the application for the withdrawn WTV scheme as an application for NOW.

 

What is NOW?

Due to an extraordinary event such as the coronavirus, employers have less or no work for their staff. As an employer you can receive a substantial contribution towards labor costs via NOW. This allows the employer to continue to pay employees with a permanent and a flexible contract. The employer will receive an advance from UWV (social security institution).

The allowance can be applied for 3 months, with the possibility of extension by 3 months. Loss of turnover from 1 March 2020 is eligible for compensation.

The employer can also make use of the NOW scheme in the event of loss of turnover due to causes other than the coronavirus outbreak.

What are the conditions for NOW?

1. The employer can apply for NOW without applying for dismissal on grounds of economic reasons for its employees in the period for which the employer receives compensation.
2. The employer expects at least a 20% loss of turnover.
3. The application is valid for a period of 3 months, with the possibility of extention of another 3 months (additional conditions may apply for extension).
4. The employer can apply for NOW for the loss of turnover (sales declines) as of 1 March 2020.
5. An auditor's report is required for applications above a further amount to be determined.

 

How much is the contribution towards labor costs?

The amount of the wage costs allowance depends on the drop in turnover, a maximum of 90% of the wage bill.

On the basis of employers’ application, the employer will receive an advance from UWV of 80% of the expected contribution. The actual decline in turnover will be determined afterwards. When the allowance is finally determined, an adjustment will still be made if there has been a decrease in the wage bill.

 

How can the employer apply NOW?

The employer must submit its application to UWV.