Meanwhile, more is known about the Emergency Bridging Measure for Sustained Employment (in Dutch: Noodmaatregel Overbrugging voor Werkbehoud), which will replace the working time reduction scheme.
Emergency Bridging Measure for Sustained Employment
As was already known, the Emergency Bridging Measure for Sustained Employment should make it possible to provide financial support to more employers. It is also intended that this measure will make this possible more quickly. Furthermore, it is intended that the application procedure for the Emergency Bridging Measure for Sustained Employment will be greatly simplified compared to the application procedure for the working time reduction scheme. Contrary to the case with the working time reduction scheme, the measure is not at the expense of employees’ un employment benefits.
Under the Emergency Bridging Measure for Sustained Employment, employers who are faced with at least 20% expected loss of turnover can receive a subsidy of up to 90% of the wage bill, related to the loss of turnover, for a period of 3 months. The subsidy provides for the wage costs of permanent employees and employees with a flexible contract to the extent that they remain employed during the application period.
Expected loss of revenue
The expected loss of revenue of 20% should relate to a continuous period of three calendar months in the period from 1 March to 31 July 2020. Employers can choose whether to calculate the loss of revenue over the measurement period starting on 1 March, 1 April or 1 May 2020. This must always be a continuous period of three months.
Employers must make this choice for the measurement period with the application. It is no longer possible to adjust the measurement period with the final settlement. Irrespective of that choice, the susbsidy for labour costs will continue to relate to the labour costs between March and May 2020, regardless of which of those three-month periods (measurement period) the turnover is determined.
For comparison purposes, a quarter of the turnover in 2019 is taken into account. The expected turnover in the three-month period must therefore be at least 20% lower than a quarter of the turnover in 2019. The comparison measure of a quarter of the turnover in 2019 applies to employers whose business activities commenced no later than 1 January 2019.
If business activities are commenced thereafter, the turnover realised in the period from the first calendar month after the day on which business activities were commenced up to and including 29 February 2020 is taken into account, divided by the number of months for which turnover is taken into account, multiplied by three.
The period to which the subsidy applies may be extended once by 3 months. Other conditions may then also be attached. For example, an obligation to train.
Employers are not allowed to apply for dismissal on business economic grounds during the period for which the subsidy applies. If an employer applies for dismissal on the grounds of business economics, the employer will have to demonstrate that dismissal cannot be prevented by invoking the Emergency Bridging Measure for Sustained Employment and why not. Employers will continue to pay wages to the employees concerned.
Unlike in the case of the working time reduction scheme, most of the subsidy under the Emergency Bridging Measure for Sustained Employment will be paid in the form of an advance payment. The UWV will provide an advance payment of 80% of the requested subsidy. Contrary to the final granting, this advance payment will not be based on the wage bill for the period 1 March to 31 May 2020 inclusive, but for the month of January 2020. The UWV expects to provide this advance payment within 2 to 4 weeks after the application has been submitted.
After the scheme has ended, it will be considered whether a supplementary payment should be made to the employer or whether the employer should repay money in the form of an additional levy. An auditor’s report is required for this. If the employer has to repay money in the form of an additional levy, no fine will be imposed for this.
Wages and salaries
The subsidy relates to the full wage and salary bill in the sense that the employer’s contribution and the accrual for holiday allowance and the accrual for pension are also included as a lump sum. For this, 30% is charged. This concerns the wage and salary bill of the own employees.
The subsidy is capped at employees’ salary amounts up to € 9,538 gross. For employees who earn more than € 9,538.68 gross, no subsidy of 90% is provided over the excess above € 9,538.68 gross. It should be borne in mind that € 9,538.68 gross will still be increased by the aforementioned fixed amount of 30%.
The subsidy of 90% is applicable in case of a loss of turnover of 100%. If the loss of revenue is less than 100%, then the subsidy will be as well. Suppose the loss of revenue is 50%, then the subsidy is 90% of 50%. Being 45%. In principle, the loss of revenue is measured at group level.
The definition of revenue and the definition of group level are in line with the definitions in accordance with annual accounts law. For the definition of group level, it concerns a group of companies that existed on 1 March 2020. Foreign legal entities are only included insofar as they employ employees who are socially insured in the Netherlands.
In principle, the group is taken into account for the revenue, but the application is made per entity/payroll tax number.
Exception for individual operating company
If the loss of revenue of the group is not at least 20%, but the loss of revenue of an individual operating company of the group is at least 20%, it is under circumstances possible to disregard the loss of revenue of the group, but to reason from the loss of revenue of the individual operating company.
It is required that the individual operating company has its own legal entity. Parts of legal entities, such as an establishment or business unit are not eligible.
Furthermore, groups of companies, of which an individual operating company makes use of the Emergency Bridging Measure for Sustained Employment , must declare that they will not pay any dividend or bonuses for 2020 or repurchase their own shares until and including the date of the shareholders’ meeting at which the annual accounts for 2020 are adopted.
Condition for an individual operating company of a group to make use of the scheme is that the operating company (the employer) with 20 or more employees has an agreement with the interested associations of employees, and in the absence thereof another representation of employees, on the retention of employment with the operating company.
The possibility to invoke the scheme does not apply to an individual operating company that is part of a group, which also includes one or more staff companies. Group companies with staff companies must always reason from a reduction in revenue at group level. After all, it is at that level that the revenue (decrease) and the use of the personnel come together.
With a view to limiting strategic behaviour, a number of conditions and safeguards are proposed. These will be defined in more detail in the standards of accountants that are yet to be elaborated.
First of all, the other operating companies may not carry out assignments or projects at the expense of the entity requesting the subsidy, which would normally carry them out and which are different for that other entity. No assignments may be transferred from the entity requesting the subsidy to another entity within the operating company at a late or later stage in or over the measurement period.
In addition, if employees of the operating company undertake activities with another entity during the application period, the loss of revenue of the operating company should be reduced by the resulting (theoretical) revenue when determining the subsidy.
The Transfer-pricing system used in the 2019 financial statements or the most recently adopted financial statements is leading for the measurement period 2020 and may not be adjusted.
Changes in inventories of finished products are allocated to revenue.
Calculation of subsidy
The subsidy is therefore calculated as follows.
The advance payment relates to 80% of the estimated % decrease in revenue, provided that this is at least 20%, multiplied by the wage bill for January 2020, multiplied by 3, multiplied by 1.3, multiplied by 90%.
The subsidy relates to 90% of the actual % decrease in revenue, insofar as this amounts to at least 20%, multiplied by the wage bill for the months March through May 2020 multiplied by 1.3.
If the wage bill for the months March to May 2020 inclusive is lower than the wage bill for January 2020, the subsidy may be reduced. If the wage bill for the months March to May 2020 inclusive is higher than the wage bill for January 2020 inclusive, the subsidy will not increase.
If an employer applies for a subsidy and fails to comply with the condition that no employees are dismissed for economic reasons during the period covered by the subsidy, the wage calculation shall be adjusted by the wage bill of the employee(s) for whom dismissal for economic reasons has been applied for plus a 50 % increase. That 50% is the penalty.
This correction is applied to all dismissal applications submitted in the period from 18 March to 31 May 2020 on the basis of business economic reasons and which have not been withdrawn within the set period. Irrelevant is whether the UWV grants or rejects the application. The correction will also follow if the dismissal application is rejected.
Dismissal for reasons other than business economic reasons is simply possible during the period covered by the subsidy. Dismissal during the probationary period is also possible. The same applies to dismissal by mutual consent. Fixed-term employment contracts may also expire by operation of law.
All types of companies
The Emergency Bridging Measure for Sustained Employment covers all types of businesses and – unlike the Entrepreneurs Affected Sectors Measure – is not limited to certain sectors. Payroll companies, temporary employment agencies, sports clubs and church associations can also make use of the emergency measure.
The Ministry of Health Welfare and Sport has made agreements with health insurers and municipalities about the support of health care providers during the corona crisis. In the first instance, healthcare providers must turn to the purchasers (of healthcare insurers and municipalities) for support and check with them whether they can receive support. If this is not the case, employers in the care sector can, provided they meet the conditions, invoke the Emergency Bridging Measure for Sustained Employment.
Emergency Bridging Measure for Sustained Employment as from 6 April
The Emergency Bridging Measure for Sustained Employment can be applied for as of Monday 6 April 2020. The application can be submitted no later than 31 May 2020. The measure will – as explained above – involve a reduction in revenue as from 1 March 2020. The working time reduction scheme was implemented by the Ministry of Social Affairs and Employment. The Emergency Bridging Measure for Sustained Employment will be implemented by the UWV.
Since 17 March 2020, no new applications for the working time reduction scheme can be submitted to the Ministry of Social Affairs and Employment. Applications that have already been made, but have not yet been processed, will be processed on the basis of the Emergency Bridging Measure for Sustained Employment. These applications will not be given priority, but will simply be included in the process. Employers who have already applied forthe working time reduction scheme, which will be dealt with under the emergency measure, will receive a request for additional information.
Working time reduction schemes, which were granted prior to or on 17 March 2020, cannot be renewed. However, it is possible to apply for the emergency measure after the end of the period for which the working time reduction scheme has been granted. Paying twice is prevented. In the event of overlapping of the subsidy based on the emergency measure and the payment of unemployment beneftis under the working time reduction scheme, the unemployment benefits will be deducted from the wage bill for March to May 2020 for the determination of the subsidy.
Data to be provided
The application can be made using the application form which will be available on the UWV website from 6 April 2020. The following information is important for this purpose:
- company details: name, address (this must be a Dutch address), telephone number, email, contact details;
- if an application has been filed for the workint time reduction scheme, the case number. This number can be found on the confirmation of receipt from the Ministry of Social Affairs and Employment and consists of 5 or 6 digits;
- the payroll tax number. A separate application must be submitted for each wage tax number;
- a choice has to be made from the following 3 months periods, for which at least 20% loss of revenue is expected: 1 March to 31 May 2020, 1 April to 30 June 2020 or 1 May to 31 July 2020;
- the expected percentage of revenue in that period;
- the account number and name. This must be the account number used by the Tax and Customs Administration to repay overpaid payroll taxes. Furthermore, this must be a Dutch account number.
Want to stay informed?
If you want to be kept informed about changes in the field of employment law, including dismissal law, you can regularly visit this website, but you can also choose to sign up as a follower via twitter, link with me via LinkedIn and/or subscribe to the newsletter. Then you will automatically be informed of the latest blog posts, which are distributed via this website.
Employment law attorney Rotterdam
Would you like personal assistance with your application for the emergency measure or any other employment law issue? Are you looking for an employment law attorney in Rotterdam?
Call me for a free intake interview on 010-2600088 or fill in your contact details in the contact form below, so I can contact you for a free intake interview.