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Legal aspects of COVID-19

Jan van Ederen Jan van Ederen

COVID-19 has major consequences for entrepreneurs and their business operations and personnel. Many of these consequences also raise legal questions. We have compiled an overview of the most important legal questions for you.

The reduction in working hours has been stopped with immediate effect

The reduction in working hours (wtv / werktijd verkorting) has been stopped with immediate effect.

  • If a permit has been granted, it will remain in force.
  • In the event of an extension, the new regulation must be used.
  • When you filed for wtv but have not received an answer yet: you will be notified. Your application for the withdrawn wtv will be considered as an application for ‘temporary arrangement compensation labor costs’  (NOW / noodmaatregel overbrugging voor werkbehoud).

Introduction new temporary measure (NOW)

Outline NOW:

  • Employers can file an application for substantial reimbursement in wage cost and receive an advance by the UWV.
  • This allows employers to pay employees with a fixed and flexible contract (the employer can also file applications for on-call employees; the employment agency for temporary workers)
  • The reimbursement can be filed for a period of 3 months.
  • With the possibility of an extension of 3 months (possible different conditions).

Conditions NOW:

When applying for wage costs compensation, the employer commits not to dismiss employees for budget reasons, at least for the period that the employer is receiving the wage compensation.

  • The employer continues to pay 100% of the salary to the employee.
  • The applicant expects a turnover loss of at least 20%.
  • The application applies for a period of 3 months (with an extension of 3 months if necessary).
  • The measure applies to turnover losses which are incurred starting from 1 March 2020.

Compensation NOW:

  • The amount of compensation depends on the loss of turnover of a company, with an maximum of 90% of the wage costs. Below are some examples of how the relationship between the decrease in turnover and the amount of compensation works out:
  • If 100% of the turnover drops, the amount of compensation will be 90% of the wage cost of the employer.
  • If 50% of the turnover drops, the amount of compensation will be 45% of the wage cost of the employer.
  • If 25% of the turnover drops, the amount of compensation will be 22.5% of the wage cost of the employer.

Advance payment NOW:

After the application, the Dutch government (UWV) will provide an advance payment of 80% of the requested compensation. It is subsequently determined what the actual decline in turnover has been. An audit report is required for applications exceeding a, still to be determined, amount of reimbursement. When the reimbursement is finally determined, an adjustment will still be made if there has been a decrease in the wage bill.

How to apply for the NOW:

Pending applications will be considered as applications for the new reimbursement regulations. Filed by the UVW. Further information on how to file for reimbursement will follow.

For employees:

  • Employees will receive full payment of wages from the employer.
  • Employee does not consume WW-rights.
  • Application is via employer.
  • Agreements are made with the employer whether the employee performs work (at home).

Self-employment (ZZP): income supplement to the social minimum

For self-employed people (ZZP’ers) the Dutch government introduced extra financial support in order to stimulate continuance of their business. Self-employed persons can receive additional income support for a period of three months through an accelerated procedure of max 4 weeks. This concerns an income supplement up to the social minimum, which does not have to be refunded. The arrangement will be executed by municipalities. The amount of the income support depends on the income and the household composition and may amount to a maximum amount of EUR 1,500 (net) per month.


  • No partner and equity test is performed.
  • No viability study is performed.
  • No refund afterwards.

The government will try to arrange this reimbursement within 4 weeks instead of within the regular 13 weeks. In addition, it will be possible to receive an payment in advance. More information will follow.

Entrepreneurs who are hit hard will receive EUR 4.000

Entrepreneurs that are directly hit hard by the COVID-19 measures and see their turnover (almost) completely evaporate, will receive a lump sum of EUR 4.000 as an emergency provision for the next three months. This will be a gift.

This includes the food service industry, the culture sector and the travel industry. But also sectors that will get into trouble due to the 1.5 meter distance requirement, such as beauty salons and hairdressers.

The company must be outside its own home. The exact conditions have yet to be worked out.

Deferral of taxes and reduction of fines

For entrepreneurs that are in trouble due to COVID-19 there is a beneficial measure by the Dutch government. They are easing the extension of payment with respect to taxes. After receiving a specific written request, the Dutch tax authorities will directly grant deferral of payment for Dutch corporate income tax, VAT, personal income tax and wage tax. Individual assessment of the request will take place at a later stage.

If a taxpayer does not pay a tax assessment on time, the taxpayer must pay the tax authorities interest on overdue tax, this rate is currently 4%. As per March 23, 2020 this rate will be reduced from 4% to 0.01% in order to help businesses if they want to request extension from tax payments. Also the tax rate, which you need to pay when the payment term of a tax assessment is over, goes to almost 0 percent.

Entrepreneurs should be able to borrow money more easily

The government is allocating more money for loans that the State guarantees. Initially this for loans for small and medium-sized enterprises (SMEs) and large companies that use the Garantie Ondernemersfinancieringregeling (abbreviated as GO).

This instrument is normally intended for loans between 1,5 and 50 million euros. That ceiling will be temporary increased to a maximum of 150 million euros. The government guarantees for 50 percent of these loans, in order that banks are more inclined to provide the credit to companies. The government is allocating 1.5 billion euros for this.

The guarantee credit for SMEs (BMKB) will be increased considerably. As a result, financiers (especially banks) can extend credit more easily and quickly, which means that more SMEs can borrow more money earlier.

Small entrepreneurs can repay later and receive an interest discount

There are also favorable loan conditions for small entrepreneurs. It concerns the microcredit provider of the government Qredits, intended for small and starting entrepreneurs who already find it difficult to obtain financing anyway.

Other points of attention

In the context of the ‘WW premiedifferentiatie’ that was introduced on January 1st 2020, the low premium must be revised to the high premium if at least 30% more hours were paid in a year than agreed. As much more overtime is now being worked in for example the health care sector, the government will adjust this so that organizations are not inconvenienced by this.

The requirement that employment contracts dating from before January 1st 2020 must be in writing no later than April 1st 2020 in order to be allowed to apply the low unemployment insurance premium had been liberalized. The date has shifted to July 1st, 2020.

Consequences for your personnel

What are my obligations as a employer?

The employer is responsible for a safe work environment for his employees. The employer must identify risks of virus infection, share information about hygiene with staff, preferably organize extra cleaning and make disinfectants available to staff. The RIVM provides advise and guidelines, and the advice is to adhere to and follow these guidelines.

What should I do if an employee has flu symptoms (cough and / or sore throat and / or fever?

The employee should be sent home immediately from the usual workplace. At home the employee should contact the GP.

One of my employees is infected with the virus. What’s next?

It is not allowed to record specific health data such as who is infected. The employee must maintain contact with the GP and / or the GGD. If necessary, report the sickness to your absenteeism services. Employees who are infected with the virus are subject to the usual rules for continued payment of wages during illness.

One or more of my employee’s housemates or family members is / are ill. What now?

Your employee is entitled to 1 or 2 days of emergency leave. During this leave, intended so that the employee can take a leave in case of an emergency (calamity), the employee remains entitled to his usual wages. After this period, if necessary, the employee may make use of short-term care leave. This type of leave is partly paid, partly unpaid. Special legal rules apply to short-term care leave, and sometimes rules from an applicable collective labor agreement are in order. For more information about care leave, please contact us.

Can emergency (calamity) leave only be used to care for the sick?

No, emergency (calamity) leave can, for example, also be used for an employee who normally takes his child to school or childcare, but which is no longer possible, given the closure of all schools and daycare centers by order of the government. Emergency (calamity) leave is only intended for 1 to a few days, to find an solution for an acute emergency situation. The employee can therefore use this period to arrange another form of daycare, this leave is not meant as a (long-term) solution to take care of the children by himself.

And after that?

After that, the employee may be required to return to work, possibly in adapted services or from home if that is possible. Short-term care leave cannot be used in this situation. You can of course make individual arrangements with your employee for partially paid leave in this situation.

If you have any further questions, the following specialists are available for you:

Legal aspects and business operations

COVID-19 has major consequences for entrepreneurs and their business operations. Many of these consequences also raise legal questions. We have attempted to name and answer a number of questions in this document. You may recognize yourself in these questions. Besides that you need to realize that the answers are general and are not tailored to your specific situation. It is always good to contact us to discuss your specific situation in order to get an answer tailored to your situation.

1 Contractual obligations

  1. Due to COVID-19, I or the customer / supplier cannot meet the agreements that we made. What are my rights and obligations?
    Your rights and obligations will (if everything is in order) be stated in the agreement with your customer / supplier. Please also refer to the (possibly declared applicable) general terms and conditions. Mostly this contains provisions about the consequences of not being able to meet the agreed obligations. In particular, look in the chapters dealing with non-compliance with the agreements, supremacy and the possibility of suspension and retention.

  2. Does the COVID-19 inability to fulfill its obligations result in supremacy?
    First, consult the agreement and the general terms and conditions. It often describes what is meant by supremacy. It is rare that an pandemic such as COVID-19 is classified as supremacy in an agreement or in the general terms and conditions. For supremacy, there must be a cause that makes it impossible to fulfill the agreements in your specific situation.

    A party that wishes to successfully invoke supremacy must be able to demonstrate that:
    - Compliance has become impossible.
    - The impossibility lies outside its sphere of influence.
    - The consequences of the impossibility could not be reasonably have been prevented.
    - The impossibility was unforeseeable at the time of contract conclusion.
    - Neither law nor agreement stipulates that the non-fulfillment is at risk (e.g. warranty clauses).

    Whether an appeal to force majeure is justified cannot be said with certainty in advance. It is therefore advisable to check for each specific case whether compliance with the agreements is justified, to inform your customer and buyer and to record this properly. If you foresee that your will not be able to deliver, it is recommended that you proactively contact your customers to discuss how to share the risks and consequences of COVID-19. Please record this well.

  3. Are there any other options?
    General contract law offers a number of other tools. In particular, a rule does not apply insofar as it would be unacceptable in the given circumstances in accordance with the standards of reasonableness and fairness (section 6: 248 (2) of the Dutch Civil Code). An agreement can also be amended or terminated by the court on the basis of unforeseen circumstances that are of such nature that the other party cannot expect unaltered maintenance of the agreement in accordance with standards of reasonableness and fairness ( Article 6: 258, paragraph 2 of the Dutch Civil Code). However, both rules are applied with great restraint. However, if the outbreak of the disease in a specific situation leads to more or less ‘extreme’ consequences, an appeal to these provisions may still be likely to succeed.

  4. Can my customer suspend payment if I cannot deliver?
    Yes, they can if you fail to meet your obligations. Suspending is also allowed when you cannot do anything about the fact that you cannot deliver, for example if there is supremacy. The suspension must then be in a reasonable proportion to the performance that is not being complied with. For example, if you can only fulfill a small part of your obligation, it is unreasonable to suspend payment of the entire fee.

    The right to suspend the reciprocation may be limited or excluded in the agreement or terms and conditions if it concerns deliveries between companies (professional parties).

  5. Can the customer dissolve the agreement?
    Yes, as long as it is permanently or temporarily impossible to perform. The agreement can also be dissolved in the event of supremacy. After dissolution, the performance that have already been delivered must be undone and the parties are freed from future performances. Dissolution can affect the entire agreement, but also part of it, for example only future performance. The right to dissolve an agreement can be limited in or excluded in the contract, but it cannot if your customers are consumers.

  6. When am I entitled to compensation?
    If a party does not perform, the other party is in principle entitled to compensation for the damage that is caused thereby. For this it is necessary that non-compliance with the obligation can be attributed to the party has to deliver the performance (the other party is to blame). If there is supremacy, the other party is not at fault and in principle there is no obligation to compensate damage.

    In addition, the other party must be in default. Absenteeism can occur in three ways:
    1. If the other party has been given a reasonable period of time to comply and has done so.
    2. If a fixed deadline has been agreed for performance.
    3. If the other party can conclude from actions or communications from the party that it will not be complied with.

  7. My customer has payment problems. What options do I have?
    In such cases you can cover yourself by invoking the right of complaint or retention of title.

  8. What is the right to claim back unpaid goods?
    That is the right of a supplier of a moveable property to reclaim it if the buyer has not (fully) paid the purchase price. The right to complain is a legal right, so you have this right even if nothing is arranged about it in the contract or terms of delivery. You must comply with a number of formalities when invoking the this right.

  9. What is a retention of title?
    The retention of title is a contractual agreement between a supplier and a buyer under which the delivered goods remain the property of the supplier, as long as the buyer has not paid yet. That means that the supplier – if the buyer goes bankrupt – remains the owner of the goods on the basis of the retention of title and can demand the curator to return the goods. Retention of title is often included in the supplier’s general terms and conditions.

  10. Can I also request additional collateral from my customer?
    Yes, for example through a pledge, mortgage, surety and the creation of joint and several liability.
  11. What is a surety?
    A surety is an agreement in which a third party (the surety) undertakes towards a creditor to fulfill a payment obligation that a debtor has or will receive from a creditor. If the debtor does not meet his payment obligations, the creditor can appeal the guarantor for payments. By means of surety, the creditor therefore has additional option for collecting his claim.

  12. What is joint and several liability?
    Joint and several liability arises if a third party declares itself jointly and severally liable for the obligations of another (the debtor). This therefore resembles a surety. However, one of the main differences between a surety and joint and several liability is that the surety can only be used if the principal debtor does not fulfill his obligations and that in the event of joint and several liability, the creditor can directly appeal to the person who has taken joint and several liability.

    In the event of an acute bankruptcy threat to a debtor, it is often too late to stipulate a right of pledge or mortgage. If other creditors are disadvantaged as a result, the right of pledge or mortgage is not valid.

  13. My debtor is in heavy weather. Is it still useful to confiscate (precautionary)?
    Yes. If your debtor does not pay, a debt collection procedure is often started. Prior to a debt collection procedure, a precautionary attachment may be levied on the debtor’s assets or, for example, on the debtor’s claims against others. If an attachment has been levied, the debtor is not allowed to do anything irreversible with those goods or claims.

    In the event of an acute bankruptcy threat, the imposition of a precautionary order is generally too late. This is because an attachment is canceled after bankruptcy. From that point on, the curator is in charge of the settlement of the debts.


Can I suspend the payment of my rent or receive a reduction is rent?

In principle, this is not just possible. To suspend the rent payment the must be a ‘lack’ of the rented. However, COVID-19 cannot be considered as a ‘defect’ under the law and standard contractual provisions. Whether an appeal to reasonableness and fairness or unforeseen circumstances (see above) is possible is not certain yet.


Obviously, COVID-19 also has consequences for your personnel. For this we would like to refer you to the Q&A COVID-19 and consequences for personnel.

If you have any question or if you are in need of further information, are available to assist you.

How can I respond to the coronavirus COVID-19?