UPDATE | Dutch employment related measures in light of coronavirus

Due to the corona virus the Dutch government decided to take extra economic measures to protect jobs and income and to mitigate the impact on the self-employed workers, the small and medium-sized enterprises (SMEs) and large enterprises. These measures are taken on top of the measures already taken by the Dutch government to mitigate the consequences of the corona virus for entrepreneurs. Please find below an overview of the main employment related measures. We also published on overview on the tax related measures: UPDATE | Dutch tax measures in light of corona virus

Temporary Emergency Bridging Measure for Sustained Employment (NOW)
Below you will find a brief explanation of the NOW. For more information we refer to our Alert NOW (in Dutch).

What does NOW entail?
Employers who are faced with at least 20% expected loss of turnover can - in relation to the loss of turnover - apply to the UWV (the Dutch Employee Insurance Agency) for a compensation in wage costs amounting to a maximum of 90% of the total wage costs for a period of 3 months. Employers have to continue to pay their employees in full (100%). The UWV will provide an advance payment of 80% of the expected compensation. The actual turnover loss will be determined afterwards, as a result of which a correction can be made by the UWV.

For whom can compensation be requested?
The arrangement provides for support in the form of compensation for the wage costs of permanent employees and employees with a flexible contract insofar as they remain employed during the subsidy period and receive wages. Employers could therefore also continue to employ employees with flexible contracts with the aid of the wage costs compensation. Temporary work agencies can also apply for compensation for agency workers employed by the agency.

Among others, the following conditions apply: 1) an obligation on the employer to make an effort to keep the wage bill at the same level as much as possible and 2) the employer is in principle not allowed to request permission to dismiss employees through the UWV for economic reasons during the subsidy period.

How can employers apply?
Employers can apply to the UWV as per 6 April 2020 via the application page on the UWV website (in Dutch).

What happens to wtv applications?
The short-time working arrangement (wtv) has been withdrawn. If employers have already been granted a wtv permit, this permit will remain in force. If employers have a wtv permit and want to extend it afterwards, they must apply for the NOW. Applications for wtv which have already been submitted (but have not yet been processed) are considered as claims for NOW compensation; additional information will be requested from the applicants by the UWV.

Temporary bridging measure for self-employed professionals (Tozo)

Income support and a loan for business capital
Tozo offers support for self-employed professionals (including zzp'ers) with income support and a loan for business capital. Tozo is based on the Decree on Assistance to the Self-Employed (Bbz), but is processed quicker. 

The income support supplements the income to the social minimum and does not have to be repaid. No capital or partner test applies. However, self-employed persons who earn more than the social assistance level, or next to their company receive more wages from regular employment than the social assistance level, will not receive supplements.

Self-employed professionals who experience liquidity problems as a result of the corona crisis can apply for a loan for business capital to a maximum amount of EUR 10,157, with a 2% interest rate. The maximum term of the loan is three years. Until January 2021 no redemption is required.

Tozo applies to established self-employed professionals who live and reside in the Netherlands legitimately (we note that self-employed professionals living abroad with a company in the Netherlands are, at least for the time being, excluded in both countries). Applicants must, among other things, meet the hour criterion for the self-employed deduction, meaning that they must have put a minimum of 1,225 hours per year into their company or professional activities.

Self-employed professionals can assess for themselves whether they qualify for Tozo via krijgiktozo.nl (in Dutch).

Self-employed professionals who want to make use of the Tozo can apply at the municipality where they live.

Unemployment insurance premium differentiation
As a result of the Balanced Labor Market Act (in Dutch: Wet arbeidsmarkt in balans) entering into force on 1 January 2020, employers now pay a low unemployment insurance premium for permanent contracts and a high unemployment insurance premium for flexible contracts. This scheme also stipulates that employers must pay the high unemployment insurance contributions retroactively for permanent employees who have worked overtime more than 30% in a calendar year. Because this provision may now lead to unintended effects in sectors where the coronavirus requires a lot of extra overtime, such as the healthcare sector, this will be adjusted.

Furthermore, the deadline for employers to draw up a written permanent employment contract which shows that an employee was already permanently employed on 31 December 2019, in order to meet the conditions for the low unemployment insurance premium, has been extended from 1 April 2020 to 1 July 2020. The reasoning behind this extension is that it will not be practically possible for all employers to meet this requirement in the coming weeks.

Compensation for entrepreneurs in affected sectors (TOGS)
The TOGS is for entrepreneurs who have been directly affected by the corona measures taken by the government. A detailed overview of sectors is available here (in Dutch). Eligible entrepreneurs receive a one-off payment of EUR 4,000 to cover their fixed costs. To be eligible for this compensation, among other things, a company must have a physical establishment in the Netherlands and this physical location must be registered with the Chamber of Commerce (KvK). Applications can be submitted via rvo.nl/tegemoetkomingcorona.

Key contacts

Suzan van de Kam

Partner | Lawyer
Send me an e-mail
+31 (0)70 318 4297

Christel Prevoo

Associate | Lawyer
Send me an e-mail
+31 (0)20 237 11 15

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