Update on the NOW measure
First published on DayOneLegal
Two weeks ago, the cabinet announced the Emergency Measure Bridging for the Retention of Employment (NOW) to replace the Working Time Reduction. Today Minister Koolmees announced more about the exact conditions of this regulation. DayOne lists the most important points and highlights of the NOW scheme below:
Wages and benefits
A maximum of 90% of the wage bill is reimbursed if your company suffers at least a 20% loss of turnover.
The more loss of turnover you suffer, the more of your wages will be reimbursed.
> If 100% of the turnover is lost, the allowance amounts to 90% of the wage bill for a period of three months.
> If 50% of the turnover is lost, the allowance amounts to 45% of the wage bill for a period of three months.
> If 25% of the turnover is lost, the allowance amounts to 22.5% of the wage bill for a period of three months.
The calculation of the wage bill is based on the social insurance wages with a surcharge of 30% for employer contributions and employee contributions. In principle, the wages bill of January 2020 – as known to the tax authorities – is taken as the starting point.
NB: timely payroll tax returns are important! After all, the wage bill is the starting point / starting point of this scheme. Please note, changes in the January wage return that are passed on after March 15 are no longer included.
The maximum benefit per employee is EUR 9,538 per month. Everything above this amount will not be reimbursed.
The Cabinet also notes that 98.5% of employees in the Netherlands are below this amount.
Decrease in turnover
The turnover decrease of at least 20% must occur over a three-month period, the start date of which falls on the first day of the months of March, April or May 2020. This may be “delayed” by 1 or 2 months.
The turnover in this measurement period is compared with the turnover from January to December 2019, divided by four. If an employer did not yet exist on 1 January 2019, a different turnover provision applies. It is unknown how this works in practice.
Due to the simplicity of the scheme, an adjustment for so-called seasonal patterns is not possible.
Loss of turnover is calculated at group level. If a group as a whole suffers less than 20% loss of turnover, separate parts of it are not eligible for compensation. The group will then have to find a solution for this itself.
Conditions for the employer
In order to participate in the scheme, in addition to the above criteria, you must also meet a number of conditions during the scheme. The main points are the following.
The employer has an obligation to make an effort to continue to pay 100% of the wages as much as possible. This is taken into account in the final settlement of the subsidy. If the wage bill has fallen due to the fact that you have not paid your employees in full, the wages costs allowance can be reduced. This also applies to employees with a flexible employment contract. These are also included in the final wage bill for the months of March, April and May 2020.
The employer is not expected to submit a request to the UWV in the period from March 18 to May 31, 2020 to obtain permission to terminate an employment contract for commercial reasons. If the employer does this anyway, the employer who makes use of the NOW scheme will receive a “termination fine” on the final bill of the employee’s salary, plus 50%. This is deducted from the total balance.
Please note that employees can, in principle, be fired for reasons other than economic reasons, or employment can be terminated by means of a termination agreement. But be aware, with a dismissal or termination, the wage bill and with it the NOW benefit will automatically decrease. If the wage bill for the months of March-April-May is lower, the amount of the subsidy will be reduced by 90% of the amount by which the wage bill fell.
Practical matters and relevant data
The UWV will process applications for the NOW scheme from Monday 6 April. An application must be made before May 31, 2020. So pay close attention to this term.
Employers can suffice with an expectation of the drop in turnover when applying. In the event of a positive decision, the UWV will pay an advance of 80% based on this expectation.
The first advance will be paid within two to four weeks after the application. Two more installments with benefits will follow.
The UWV will make a final decision on the application within 13 weeks.
The employer must apply for the final bill within 24 weeks after the NOW benefit has ended. In principle, an auditor’s report is required for this. Efforts are being made to establish a further limit below which this statement is not required. The cabinet hopes to announce this within 4 weeks of the publication of the regulation.
The UWV will determine this within 22 weeks of receipt of the request for final settlement. Including the application period, it may therefore be the case that a company is only confronted with any refunds one year later.
Again, these are the highlights. There are nuances, exceptions and concrete questions that may not be answered here, while we also see that many companies need strategic and legal advice in deciding how to operate and whether or not to resort to the scheme. The DayOne team is ready for you!
For questions or assistance, please contact Vincent Breedveld at breedveld@dayonelegal.nl or 06-53849319, Anne Zweipfenning at zweipfenning@dayonelegal.nl or 06-53579632 or Sebastiaan van Wijk at vanwijk@dayonelegal.nl or 06-12266580
