Coronavirus - Most important questions and answers about people and work

1. What measures are expected proactively from an employer regarding the coronavirus?

An employer has a legal duty of care to ensure a safe and healthy working environment for its employees and must prevent illness as much as possible. An employer must inform employees, e.g. about taking hygiene measures and precautions and what to do if they are infected with the coronavirus. A precautionary measure is, for example, promoting to work (remotely) from home or postponing/canceling a business trip. We advise employers to set up a policy regarding the coronavirus in consultation with the company doctor. Meeting the duty of care and acting as a good employer can help ensuring the peace of mind and avoid liability for non-compliance damages. 

2. What can an employer reasonably require from its employees?

An employer has a right of instruction towards its employees. This means, for example, that an employer may oblige its employees to follow certain hygiene measures, to work remotely from home or postpone/cancel a business trip. Employees are required to follow such instructions. Employees are in principle obliged to (proactively) inform their employer if, for example, they have visited the affected areas or have a sick child that might be contaminated with the coronavirus. This information enables the employer to ensure a safe and healthy working environment. The employer's right of instruction is limited. For example, an employer should not require from an employee that he/she cancels a holiday as going on holiday is a private matter. Some collective labour agreements contain exceptions for situations where it is no longer possible to operate properly due to the holiday of the employee.

3. Does the employee have a right on (paid) leave when e.g. a family member of the employee is contaminated with the coronavirus or the schools are closing?

An employee may, in principle, not be obliged to take up holiday days. The employee is in these cases entitled to emergency leave or short-term care leave. Emergency leave is meant for short leave due to immediate private emergencies (with full pay). For example, the first day when a family member is admitted to a hospital or summoned to quarantine. Short-term care leave is meant for employees that have to take care of relatives. This short-term care leave is available for a short period and the length of such leave depends on the circumstances (with a maximum of two times the weekly working hours during twelve months). During this short-term care leave the employee can remain entitled to seventy percent of the normal salary, but additional rules can apply (e.g. pursuant to an employee handbook and/or CLA). If an employee wants/must stay at home longer than is permitted by law, the employer and employee will have to make agreements about this, including e.g. taking unpaid leave or holiday days. If all employees are obliged to work remotely from home (i.e. and have the right to full payment of wages), employees can, in principle, not be forced to use emergency leave/short-term care leave.

4. Can the employer oblige the employee to take his or her holiday days?

Most employees are now required to work from home because of the coronavirus. However, not all employees can work from home, for example shop and catering staff. In this situation, an employer might want to oblige employees to take their holiday days. As explained briefly under question 3, the employer can in principle not oblige the employee to take his or her holiday days. This is only possible if this has been agreed in writing in the employment agreement or collective labour agreement (“CLA”) and  the employer has determined the holiday in time so that the employee can actually make plans to enjoy his or her holiday. The latter condition applies as holiday has a so-called recuperation function, which means that the employee must be able to recover and/or rest during the holiday.

A different regime applies to so-called working time reduction (atv or adv) days, because these days do not have the same purpose as holiday days. The purpose of the right to vacation is to enable the employee to rest and have a period of relaxation and free time. Atv and adv days have been created to combat job losses and create new jobs and are therefore not aimed at 'relaxation' and 'free time'. This means that the strict conditions as described above do not apply to atv and adv days. The employer can therefore oblige the employee to take these days, unless this option is prevented in the employment agreement or CLA.

5. What about the continued payment of the salary of employees?

If the employee is ill due to the coronavirus, the employee will receive the salary as agreed upon in the employment agreement or CLA. If the employee is not ill, but is unable to work due to, for example, a mandatory quarantine or travel ban, the employer must continue paying the full salary. If the employer decides to send employees home (preventively), the full salary must continue to be paid. The employee is not entitled to stay home out of fear for infection on his/her own initiative. If the employee refuses to resume his/her duties, the employer can use a suspension of wages as a pressure medium, but only after he has given an official warning to the employee. In principle, employees who are kept in quarantine during their holidays due to a corona outbreak are also entitled to payment of full salary.

6. When can an employer apply for the temporary Emergency Measure Bridging for Retention of Work (NOW)?

On 31 March 2020, more was announced about the new scheme, the temporary Emergency Measure Bridging for Retention of Work (NOW). Currently, the following information is known about the emergency measure:

  • If you, as an employer, are confronted with at least a twenty percent expected loss of turnover you can apply to the Employee Insurance Agency (“UWV”) for a period of three months. The size of the compensation depends on the extent of your turnover decrease.
  • You need to estimate your possible loss of turnover. To this end, you divide your total turnover in 2019 by four. You compare this turnover with the expected turnover of three months in 2020. You can choose from three periods: March-April-May 2020, April-May-June 2020 or May-June-July 2020. You can use these three periods to calculate the decline in turnover as a percentage.
  • The basis of the NOW is the salary sum from the wage bill of January 2020 with a fixed surcharge of thirty percent for employer's costs (holiday pay, pension contributions and employer's contributions). There is, however, a maximum wage that is compensated, namely 9,538 euros per month per employee.
  • For the application of the scheme, the UWV looks at the decrease in turnover of the entire group of which your company is part, often the group for which your consolidated annual accounts are drawn up. You may not include the turnover of foreign subsidiaries without Dutch wage for purposes of national insurance contributions, in the calculation of the decrease in turnover.
  • On the basis of the application the UWV will provide an advance payment of eighty percent of the amount, in no more than three instalments.
  • When applying, you commit in advance to the obligation not to apply for a dismissal permit based on economic reasons for your employees during the period in which you receive the allowance. 

If you do submit a dismissal application to the UWV for economic reasons on or after the date of entry into force of the NOW (2 April 2020), the UWV will take the NOW into account. This means that you must demonstrate that dismissal cannot be prevented by appealing to the NOW and why not. The NOW is not taken into account in respect of dismissal applications submitted before April 2, 2020. Failure to comply with the condition not to apply for dismissal results in a fine (discount on the compensation): the wages of the employees made redundant are increased by fifty percent for the calculation, and this wage plus the fifty percent increase is deducted from the total wage bill on which the final amount of the subsidy is based. You must also pay this fine if the UWV rejects the application for dismissal.

  • If you have nevertheless submitted a request for dismissal in the period from March 18 up to and including the date of entry into force of the NOW (2 April 2020), you can withdraw this request for dismissal within five working days after the NOW enters into force. If the application for dismissal has been submitted after the NOW entered into force, you must withdraw it within five working days after submission of that application for dismissal. The condition does not apply to dismissal applications that are submitted to the UWV in the period from 1 March to 17 March.
  • The following types of dismissal do not lead to a penalty:

- not extending a fixed-term employment contract;

- dismissal during the probation period;

- termination by mutual consent;

- request for termination before the sub-district court for reasons other than economic reasons;

- application for dismissal at the UWV due to long-term incapacity for work (more than two years).

  • You must keep the wage bill equal as much as possible. If there has been a decrease in the wage bill when the subsidy is definitively established, an adjustment shall be made.
  • You can request this wage costs allowance both for employees with an indefinite term contract and employees with a flexible contract (such as employees with a zero-hours contract), but only insofar as they remain employed during the application period. Temporary employment agencies can also apply for the wage costs allowance for their temporary employment workers.
  • The actual loss in turnover is determined retrospectively and the final compensation is determined on that basis.
  • An auditor's report is only required as part of the final application. The conditions for this are still to be announced. An auditor's report is not yet required when applying for an advance payment.
  • Employees do not use their unemployment rights under the scheme because the scheme is separate from the unemployment benefit scheme. Employees and employers can decide themselves whether employees should perform work.
  • You must inform your works council or staff representation about the subsidy. In the absence of such a body, you must inform your employees directly.

The application desk of the UWV  is open since Monday 6 April 2020. You can apply for the wage costs from 1 March 2020. The office will remain open until 31 May 2020. The UWV aims to pay an initial advance of the allowance within two to four weeks after application.

The scheme applies to the wage bill for the period March to May 2020. However, the possibility of extending the scheme by three months is kept open. Further conditions may be imposed if the scheme is extended.

As per 17 March 2020, no new applications can be submitted for the reduction of working hours scheme. Applications for reduction of working hours that have already been submitted are considered as applications submitted for the new scheme; additional information will be requested from the applicants. Applications for the working hours scheme that were already granted will no longer be extended. These employers must submit an application under the new scheme.

More information about the NOW scheme can be found in this PwC Tax News article.

7. Can an employer have an employee medically tested for the coronavirus?

In principle, it is forbidden to process specific medical data. This may be different in exceptional cases. This may be the case when the processing of the data is necessary to prevent further spreading of the coronavirus, for example if there is a serious threat of an outbreak of the virus in the workplace. However, a serious threat is not easily assumed. If, for example, an employee has been in a risk area but does not yet show any symptoms, there might be no serious threat. In that case, the employee cannot be obliged to undergo a medical test. However, the employee may be advised to consult a general practitioner. This may be different if the coronavirus spreads further and the government advises on this topic. An employer is then expected to follow the government's instructions on carrying out health checks. 

8. Are companies required to pay self-employed workers who are sick or on mandatory quarantine?

Self-employed workers are individuals who work under a contract for services. Self-employed workers do not have the same level of rights and protection as regular employees. For self-employed workers in the Netherlands it is not (yet), in contrast to regular employees, compulsory to have insurances for illness, invalidity or unemployment. Therefore, they must make arrangements for these kinds of insurance themselves if they want to receive any benefit in the event of illness or disability.

9. Are there any benefits for self-employed workers without (temporary) income? 

On 17 March 2020, the Dutch government announced that it will introduce a temporary, more relaxed scheme to support self-employed people, including self employed persons without personnel, so that they can continue their businesses. The scheme is being implemented by the municipalities. Self-employed people can receive extra income support for their living expenses for a period of three months via an accelerated procedure. This support will supplement their income up to the social minimum and does not need to be paid back. This temporary support scheme for self-employed people is not subject to a means test, partner test, or even a viability test. Under this temporary scheme, support is also possible in the form of a loan for operating capital up to a maximum of 10,157 euros, against a reduced interest percentage.

10. What rules apply to employees with a 0-hour contract?

Since the Balanced Labour Market Act (WAB) came into force in January 2020, the use of 0-hours contracts has become less flexible. An employee working under a 0-hour contract is in principle not entitled to payment of wages if he/she does not work. The WAB provides that specific rules apply for 0-hours contracts. The employer must summon the employee at least four days in advance (this term can be shortened in a CLA to 24 hours). If the employer withdraws the summon within four days before the start of the work activities, the employer is obliged to pay the salary for the (initial) summoned period. This main rule also applies if there is less work due to the coronavirus. If the employer no longer calls the zero-hour employee, the employee is in principle no longer entitled to wages.

11. Does the Working Conditions Act also apply to homeworkers?

Yes, the Working Conditions Act also applies to employees who work at home. However, more flexible working conditions apply than to the workplace in your company.

12. How do I reach my employees who currently work abroad or intend to work abroad on short notice?

Contact a central point in your organisation; the mobility team or another central point. This will ensure consistent communication to employees. Also, when iSOS is used, this appears a reliable source to obtain insight in which employees currently working abroad for your organisation.

13. Do I need to cancel the assignments of my employees?

We recommend all organisations to adhere to the guidelines of the RIVM in this respect and also to address this to their foreign entities. The measures taken with regards to international assignments should be in line with the further policy and guidelines of crisis teams and/or task forces within your organisation.

14. An employee will have another travel pattern as a result of the Corona-measures, for example working from home more often. Will this impact taxes and social security?

Indeed, the tax and social security position of a cross-border employee is determined based on where the employment activities are (physically) performed (183-days rule, etc). Potentially, thresholds may be reached as a result of the changed workpattern. It is therefore of much importance that the employee keeps track of his workdays to ensure that potential tax and social security consequences can be reported (f.e. by means of the personal income tax return 2020).

We expect the social security authorities not to apply the existing thresholds very strictly, when only caused by the Corona-measures certain thresholds are exceeded resulting in a change of the social security position of an employee. Preferably, the social security scheme of the initial country will continue, also during the Corona-crisis. The authorities are requested to confirm such an approach.

Finally, it should not be forgotten to review and assess whether work- or residence permits require extension when employees need to remain longer at a certain (work)place.

15. Where are employees recruited from abroad taxable when they relocate to the Netherlands at a later stage?

Irrespective of the fact that the employee started his/her work for the Dutch company, the salary of the employee will be taxable in the employee’s home country. It is important that the employer investigates what requirements this will lead to in the employee’s home country.

16. What is the impact on the 30% ruling when an employee starts his/her employment for a Dutch company, but is not able to relocate to the Netherlands as a result of the Corona virus?

The employee will not lose his/her entitlement to the 30% ruling as a result of this. Please note however that, when the 30% ruling is already applied for or issued by the Dutch tax authorities, it needs consideration whether the start date of the ruling needs to be amended.

17. Do I need to cancel applicable social security statements (A1-statement, Certificate of Coverage, or voluntary insurance)?

No, initially this is not necessary. Only when assignments are officially ended or when the interruption of the assignment exceeds 2 months, action is needed in this respect.

For assignments that have not yet started, it is advisable to postpone the start date of the statements to ensure that (potentially) the maximum duration of the statement can be used.

18. Will the authorities act less strict concerning deadlines related to certain types of work- and residence permits?

No, the authorities have not announced any more relaxed policies concerning Corona related to the deadlines of several work- and residence permits. Though, this is currently under discussion with the authorities. 

19. What are the implications when employees have an overstay due to Corona (i.e. employees who cannot travel)?

An overstay will not have any consequences as long as there is a grounded reason for (for example quarantine). This needs to be substantiated by proof however.

20.  Can the employer decide to pay the holiday allowance later because of the Coronavirus?

The law states that employees are entitled annually to a percentage of 8% of their gross annual salary as a holiday allowance. Most companies pay this amount with the salary round in May. In our opinion it is possible to spread the payment of holiday pay over a number of months or to postpone it. The conditions for this are that employees must give their consent in writing and that the employer must pay the holiday allowance ultimately in December 2020 (i.e. this calendar year). It is advisable to properly motivate a request for postponement of the holiday allowance and to use it only as an ‘ultimum remedium’. We recommend the employer to explain the reasons for the measurement in the letter, e.g. that he wants to prevent liquidity problems and possible layoffs in the long term. With good motivation, employees are expected to be more willing to grant their consent.

Contact us

Bastiaan Starink

Bastiaan Starink

Partner, PwC Netherlands

Tel: +31 (0)88 792 64 06

Nicolien Borggreve

Nicolien Borggreve

Partner, PwC Netherlands

Tel: +31 (0)88 792 50 68

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