Is your company being affected by the Coronavirus outbreak? The probability that the virus will affect the availability of your staff is increasing. The virus is spreading, as are its effects and consequences. There is less work due to the virus, production has slowed down or has stopped completely due to goods and parts not being delivered, bookings have slowed down, and orders have been delayed or cancelled. And you can add to this any consequences you may be facing or you may foresee. The ability to absorb and bridge the financial consequences (personnel wage costs will continue but revenues are down) will often be related to how long this period lasts.
The government has a vaccine for companies
As an entrepreneur, you will be looking for solutions and alternatives if the availability of your personnel is affected. The government has determined that the consequences of the virus outbreak are not to be considered as a normal business risk. So if, as a result of the virus, you temporarily have insufficient work for all your staff, you may be eligible for the Reduction of Working Hours (RWH) scheme for employees, provided that certain conditions are fulfilled. RWH may offer a full or partial solution and reduce the financial burden without the need for you to make any personnel redundant.
What is the Reduction of Working Hours (RWH) scheme?
In concrete terms, the Reduction of Working Hours (RWH) scheme provides for you continuing to employ any employees for whom there is temporarily no work or less work. The hours that they are not working are paid for as unemployment benefits. This will save you, the employer, wage costs. The aim is to prevent any hasty dismissal of workers who you will probably need again in your company once things have normalised.
The conditions
In order to become eligible for RWH, a number of conditions must be met:
- The exceptional circumstances should not reasonably be able to be considered part of the normal business risk.
- It must be demonstrated that at least 20% of the labour capacity that you have available will probably not be able to be utilised for a minimum of 2 weeks and a maximum of 24 weeks.
- The reduction in work should be temporary. Standby workers with a zero-hours contract and temporary workers are not eligible for application of the RWH scheme, since there is no obligation to continue to pay them wages.
Permit application/renewal
The permit for RWH can be applied for from the Dutch Ministry of Social Affairs and Employment (SZW) and is valid for a maximum of 6 weeks. What if the situation in your company has not improved when the permit expires? Then you can apply for a renewal of the permit, for consecutive periods of a maximum of six weeks. The maximum total duration is 24 weeks.
Unemployment benefit
If you have been granted the permit, you must immediately report this to the UWV (the Dutch Employee Insurance Agency). When the permit has expired, you can apply for unemployment benefit from the UWV. If the employees meet the conditions, the UWV will transfer their unemployment benefits to you as the employer.
What next?
The RWH scheme has been used in the past to deal with other adverse situations, such as the credit crisis. Our firm then successfully advised clients about this scheme, coordinated/filed applications and, where desired, jointly shaped communications about this in respect of personnel with the employers. It is important that your staff are aware of you choosing this solution and what the consequences will be for them. Involving your staff even enables you to create opportunities that will benefit both you, as an employer, and your employees in the future. We can also actively help you think about this and advise you on this.
Do you have any questions? Would you like us to brainstorm with you, give you advice, file an application, or assist you in communicating with your staff? Then please contact us in good time!
