As part of the Covid-19 emergency measures the Dutch government has decided to (i) extend the period for complying with new requirements  for employment contracts for an indefinite period until 1 July 2020, and (ii) make changes to the 30percent working hours rule.

Extension of period for compliance

The Dutch employment act WAB that came into force on 1 January 2020 imposes a higher Unemployment  Act (“WW”) premium on employers for each employee that does not have a written  employment agreement for an indefinite period. The lower WW premium can only be applied when the employer has a signed written employment agreement for an indefinite period from the employee. This was considered a problem in respect of, for example, older employees whose employment agreements were either never drawn up or had been lost over time, and in respect of fixed term employment agreements that were converted into employment agreements for an indefinite period by way of a simple extension/conversion letter (which does not meet the requirements of a signed employment agreement).  For more information please refer to our article WAB Checklist : New Year’s refresher .

Originally employers were given until 1 April 2020 to comply with these new rules, but, due to the Covid-19 outbreak this period will be extended until 1 July 2020.

Amending the working hours rule

Under the WAB the higher WW premium can be retroactively applied where an employee with an employment agreement for an indefinite period has in one calendar year worked over 30percent more hours than contractually agreed. This rule is aimed at preventing employers from bypassing the higher WW premium by entering into indefinite term employment agreements that include lower working hours while consistently using overtime to increase  the actual working hours of the employee.

In light of the Covid-19 outbreak the Dutch government recognised that some industries, such as hospitals and grocery stores, have significantly more work for employees  and so may reach the 30 percent threshold.  According to the Dutch government this is an adverse effect that should be prevented and the rule will therefore be amended.  More information is not yet available but we will keep you up to date.

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