Employment law update

1. What is your government's response to protecting workers as a result of Coronavirus?

• There is no general lockdown. The Dutch government has introduced social distancing measures and employees are supposed to work from home where possible. Bars, restaurants, schools, day-nurseries and gyms have been ordered to close through 28 April 2020. Other businesses may remain open, but many have closed voluntarily. Rules are expected to be relaxed after 28 April 2020, but details are yet unclear.

• In addition, the government has introduced various financial measures to support businesses during the crisis. Most importantly from an employment perspective, employers who suffer a 20+ percent drop in turnover are entitled to compensation under the Salary Subsidy Scheme.

2. How does the Dutch Salary Subsidy Scheme work?

• The Salary Subsidy Scheme was introduced on 17 March 2020. The scheme is locally known as "NOW" (after the Dutch acronym).

• Employers who suffer a drop in revenue of 20 percent or more qualify for compensation. The employer does not have to prove any causal link with the coronavirus.

• Compensation covers the employer’s salary costs in March, April and May 2020. Compensation is up to 90% of total salary costs in this period, depending on the drop in revenue. For example:

  •  100% drop in revenue: 90% of salary costs compensated.

  • 50% drop in revenue: 45% of salary costs compensated;

  • 25% drop in revenue: 22.5% of salary costs compensated.

• The drop in revenue is calculated on the basis of the difference between:

  • Revenue of the entire group in the Netherlands during a consecutive 3 calendar month period starting on 1 March, 1 April or 1 May 2020 (to be selected by the employer); and

  • 25% of revenue of the entire group in the Netherlands in 2019.

• Compensation extends to all employees, regardless of whether they are furloughed (or are actually very busy). This includes employees on permanent, fixed term and other flexible contacts (such as on-call, ‘min-max’ and zero hours contacts). Salary costs for temporary workers are also covered, but compensation must be claimed by the temporary employment agency.

• Compensation is capped at EUR 9,538 gross per employee per month. This amount is increased with a fixed 30 percent allowance for holiday allowance, as well as pension and social security contributions borne by the employer. Consequently, total compensation is effectively capped at (almost) EUR 14,200 gross per employee per month.

• The employer must comply with the following obligations:

  • The employer uses compensation for the payment of salaries only and maintains salary costs "as much as possible" at the same level. This (vaguely worded) requirement most likely implies that employees should remain entitled to 100% of their salary from March through May 2020. We expect that voluntary temporary paycuts are permitted however (it being understood that compensation will be reduced accordingly).

  • From 18 March through 31 May 2020, the employer cannot make employees redundant. If the employer does make employees redundant, compensation for the redundant employees must be paid back plus a 50 percent penalty. The employer remains permitted to terminate employees for other reasons than redundancy (performance, misconduct, long-term illness etc.).

  • The employer informs the works council, staff representation committee or employees about the application for compensation under the Salary Subsidy Scheme. This is an information requirement only, not a formal consultation process.

• Applications for compensation can be filed until 31 May 2020. Compensation is paid out to the employer (and not as a benefit to employees). Compensation is initially paid as an 80 percent advance payment based on salary costs in January 2020 and the expected drop in turnover in the relevant period (see § 5 above). The definitive amount of compensation will be determined later based on the actual salary costs and the actual drop in turnover.

• As mentioned, compensation covers the employer’s salary costs from March through May 2020. After that, the government will re-assess the situation and may opt to extend the scheme.

3. Working from home – Are employers continuing to pay employees who work from home?

• Yes, employees continue to be entitled to their normal salary and perquisites.

4. What other considerations should employers take into account when allowing employees to work from home?

• Depending on the nature of the work, it may be advisable to implement policies specifically aimed at working from home for matters such as IT, data protection, occupational health and safety and working time. Monitoring of employees must comply with data protection and privacy laws and is usually subject to prior works council consent.

5. What are employers doing when employees cannot work from home and their place of work may have to be temporarily closed?

• Employees are normally put on leave in this situation. Most likely employees continue to be entitled to their normal salary and perquisites, but up to 90 percent of salaries may be recoverable under the Salary Subsidy Scheme (see above). 

6. What rights do employees have if they need to stay at home to look after children or dependents because schools or care homes have been closed?

• There are no specific rules for this situation. As a general rule, employers will be required to accommodate employees as much as reasonably possible, e.g. by allowing them to work from home. If working from home is not feasible, the employer will normally be required to grant leave. Whether this is paid or unpaid leave will depend on the circumstances. In case the employee is ill, normal rules regarding continued payment of salary during sick leave apply (up to 24 months). Again, up to 90 percent of salaries may be recoverable under the Salary Subsidy Scheme (see above).