Temporary Emergency Bridging Measure for the Preservation of Work (‘’NOW’’) published

During a press conference at 10:00 am today, Minister Koolmees announced details of the Temporary Emergency Bridging Measure for the Preservation of Work (‘NOW’). The scheme was published simultaneously. In this memo we discuss the main features of the NOW scheme.

Loss of turnover

• Under the NOW, employers can apply for a compensation for labour costs if they expect a loss of turnover of at least 20%. The loss of turnover of at least 20% must occur over a three-month period starting on the first day of the months March, April or May 2020. It must always relate to a consecutive period of three months.
• The turnover in the consecutive measurement period of three months shall be compared with the turnover from January to December 2019, divided by four.
• The loss of turnover is determined at group level. If the loss of turnover measured at group level is less than 20%, no compensation will be paid to any individual parts of that group.
• The loss of turnover relates to the net turnover, i.e. the income from the supply of goods and services from the business of the legal entity, reduced by discounts or other types of deductions.

Wages

• The employer is obliged to pay full wages to the employee, but can apply for a compensation of labour costs at the UWV. The employee must remain fully available to perform work.
• The NOW scheme is applicable to employees with a contract for an indefinite period and employees with a flexible contract insofar as they continue to be employed and receive wages from the employer during the period for which the compensation is granted.
• The wage bill of all employees with wage for social insurance purposes are eligible for compensation. These are, for example, employees with a so-called fictitious employment contract for employee insurance schemes. Voluntarily insured persons, for example, are not eligible for compensation.
• Previously it was suggested that the wage per employee was not capped, this appears not to be the case. Wages above € 9.538,- gross per month do not qualify for compensation.
• The advance payment made under the NOW scheme is, in principle, based on the wage bill for the January 2020 tax period. If there are no wage data for January 2020, the UWV shall base it on the period of November 2019. If there are no data for this period either, no compensation can be granted.
• If the wage bill for the months March-April-May turns out lower, the amount of compensation will be reduced by 90% of the amount by which the wage bill has dropped. This measure is an incentive to keep employees employed as much as possible for the hours they worked before the drop in turnover.

Compensation

• The amount of the allowance for wage costs depends on the drop in turnover and amounts to a maximum of 90% of the wage bill. For example: If 100% of the turnover is lost, the allowance amounts to 90% of the wage and salary bill of the employer and if 50% of the turnover is lost, the allowance amounts to 45% of the wage and salary bill of the employer.

Extension

• It was previously announced that the 3-month period of the allowance may be extended once for a further period of 3 months. The Cabinet now announces that the possibility to make use of an extension has not yet been decided on; it will be decided before 1 June 2020, so that any extension will link up with the first application period ending on 31 May 2020. In case of extension, further conditions may be added to the scheme.

Prohibition of dismissal

• When applying for the NOW-scheme, the employer undertakes in advance not to apply for dismissal on economical or organizational grounds for his employees during the period for which the  compensation is granted. The employer is therefore expected not to apply to the UWV for permission to terminate an employment contract on economical or organizational grounds in the period from 18 March until 31 May 2020.
• The prohibition on dismissal does not apply to dismissal applications submitted to the UWV in the period from 1 March until 17 March 2020.
• If a request for dismissal is made contrary to the permitted period and this request is not withdrawn (or the withdrawal is overdue), a correction will be made when the compensation is determined. When determining the compensation the wages of the employees for whom dismissal has been requested are determined. This wage is then increased by 50%. This wage (including the 50% increase) will be deducted from the wage bill on which the final amount of the compensation is based.

Request

• The UWV is in charge with processing the application. It is expected that the application can be submitted on 6 April 2020. The first advances will be paid within 2 to 4 weeks. This advance payment will in any case amount to 80% of the compensation.

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