PLEASE NOTE: this article has been superseded by the new measures introduced on 17 March 2020. The scheme for reduced working hours has consequently been suspended.
If, as an employer, you notice that business activity within your company is declining due to the coronavirus and has fallen to an ‘abnormally’ low level, you may wish to consider applying for reduced working hours. Below is a brief summary of the conditions and procedure currently in place for claiming reduced working hours.
At present, business organisations are also in discussions with the government regarding a package of additional measures to help businesses maintain their liquidity should the situation regarding the coronavirus require it. However, there is as yet no clarity on this matter.
Period of reduced working hours
First and foremost, as an employer, you must apply for the reduced working hours scheme in good time, as it is not granted with retroactive effect. Consequently, reduced working hours cannot be applied to periods prior to the date on which the application was received by the UWV.
Conditions
In principle, it is not permitted to reduce employees’ working hours. This is only possible if, as an employer, you have obtained a licence to do so from the Ministry of Social Affairs and Employment.
The condition for applying for the licence is that the level of activity within the company is (expected to) fall to an abnormally low level.
This means:
- that it is expected that, over a period of between a minimum of 2 and a maximum of 24 weeks, there will be at least 20% less work available as a direct result of the exceptional circumstances (in this case, the coronavirus);
- the causes of which do not form part of normal business risk;
- the decline is temporary (i.e. not structural).
The rules set out above are set out in the Policy Rules on Exemptions from the Ban on Reduced Working Hours 2004.
As an employer, you may only invoke reduced working hours for employees whom you are required by law to continue paying if the inability to work cannot reasonably be attributed to the employee. In other words, reduced working hours do not, in principle, apply to on-call workers, agency workers and the self-employed.
Request
You can only apply for reduced working hours digital submit to the Ministry of Social Affairs and Employment.
If the conditions mentioned above are met, the Ministry of Social Affairs and Employment will grant a permit valid for a maximum of 6 weeks. If the permit needs to remain valid beyond these 6 weeks, you must submit a second application for an extension of up to 24 weeks.
Once you have obtained the licence, you must do so immediately notification to be submitted to the UWV.
Once the six-week period covered by the permit has expired, you must then submit your application for unemployment benefit to the UWV. It is not known how long it will then take for the UWV to process the payment.
Per employee
A form must be completed for each employee, stating the number of hours each employee has worked during the six-week period covered by the permit. This form must be signed by each employee individually.
The UWV will then pay the unemployment benefit to the employer (not directly to the employee) on the basis of the forms submitted. You must therefore continue to pay your employees’ wages, but you will be reimbursed by the UWV: 75% of the wage for the first two months and 70% thereafter. The UWV therefore only reimburses, retrospectively, the hours that employees did not work during the authorised period. In most cases, employees therefore notice little financial impact from the reduced working hours: in principle, they simply continue to receive their wages.
Incidentally, the above does not apply to employees who are off sick. In such cases, you are simply required to continue paying their wages yourself (if you have taken out sick pay insurance, this will cover the costs). This also applies to employees who are off sick for just one or two days, for example.
Holiday leave does not count towards the reduction in working hours either.
Dismissal
As previously indicated, the reduction in working hours does not apply in the event of a structural reduction in work. After all, this must involve a temporary decline. Should there nevertheless be a structural reduction in work, this may constitute grounds for applying to the UWV for redundancy (for example, on the basis of commercial reasons, a reduction in work, a poor financial situation or, in the worst-case scenario, the closure of the business). Of course, you can always try to reach an agreement with the employees to terminate their employment by mutual consent.