Applications for NOW Scheme
possible from 6 April 2020

On 17 March, the Dutch government introduced the Temporary Emergency Bridging Measure for Sustained Employment (Tijdelijke Noodmaatregel Overbrugging voor Werkgelegenheid – NOW) as a replacement for the short-time working scheme. Under this temporary measure, employers that experience a fall in turnover can obtain a subsidy to help them hold on to as many employees as possible. More details of the scheme’s contents and terms were provided on 31 March. This article explains how the scheme works.

The Temporary Emergency Bridging Measure for Sustained Employment provides for an allowance to subsidise labour costs in the period March-May 2020. The possibility of extending the scheme by three months has been left open intentionally. A decision on this will be taken before 1 June 2020.

Terms of the Temporary Emergency Bridging Measure for Sustained Employment

• You give an advance undertaking not to apply to lay off any of your employees on economic grounds in the period for which you receive an allowance.
• You must expect turnover to fall by at least 20% as from 1 March 2020.
• Your application covers a period of three months.
• If you make use of this scheme, you must continue to pay the employees their full salaries.
• The actual drop in turnover will be calculated in retrospect.
• If the wage bill decreases, an adjustment will take place when determining the final amount of the allowance.
• Based on your application, the Employee Insurance Administration Agency (UWV) will advance you 80% of the expected allowance.
• The actual drop in turnover will be calculated in retrospect.
• If the wage bill decreases, an adjustment will take place when determining the final amount of the allowance.

The level of the allowance to subsidise labour costs depends on the percentage decline in turnover, and can be as high as 90% of the wage bill. The following examples show how the level of the allowance is related to the drop in turnover:

• If your turnover falls by 100%, the allowance will amount to 90% of your total wage bill for social security purposes.
• If your turnover falls by 50%, the allowance will amount to 45% of the total wage bill for social security purposes.
• If your turnover falls by 25%, the allowance will amount to 22.5% of the total wage bill for social security purposes.

Drop in turnover

The allowance is based on a calculation of your drop in turnover. What assumptions are made in this context?

• If an employer’s turnover falls by at least 20%, the employer will receive an allowance to subsidise up to 90% of its labour costs, depending on the drop in turnover.
• The assumption is that if turnover falls by more than 20% during the application submission period for the Temporary Emergency Bridging Measure for Sustained Employment, this is due to exceptional circumstances that are considered not to be part of normal entrepreneurial risk and are, for example, related to government intervention measures or public order measures. As the employer, you are not required to demonstrate the degree to which the exceptional circumstances contributed to the drop in turnover of at least 20%.
• Turnover must fall by at least 20% for a period of three months starting on the first day of March, April or May 2020. If you expect that turnover will start to fall after March, you may opt for the period April-June or May-July.
• Turnover during the three-month period is compared with turnover for the period January-December 2019 divided by four.

Example: Imagine that your turnover for 2019 is € 1,000,000. This corresponds to € 250,000 per three months. Your turnover for the period March-May is € 50,000. The drop in turnover is therefore 80%.

• For employers that comprise a single legal entity or natural person, the drop in turnover (expected or actual) is calculated at the level of that legal entity or natural person. If the employer is a group of legal entities, the drop in turnover is calculated at group level.
• For employers that comprise a single legal entity or natural person, the drop in turnover (expected or actual) is calculated at the level of that legal entity or natural person. If the employer is a group of legal entities, the drop in turnover is calculated at group level.

Which employees can you claim an allowance for?

The Temporary Emergency Bridging Measure for Sustained Employment subsidises the labour costs of people you employ who are also compulsorily covered by the employee insurance schemes. This means that salaries of directors/majority shareholders do not qualify for the Temporary Emergency Bridging Measure for Sustained Employment.

The scheme is also applicable to employees with a flexible contract. These employees must continue to be employed and receive a salary from you during the period covered by the allowance. Consequently, the salaries of on-call workers, employees with an agency contract or secondment contract, and people employed through payroll companies will also qualify for the allowance on the understanding, of course, that they continue to be paid. The government is calling on employers to take responsibility for their employees with flexible contracts and to continue to pay them wherever possible. This implies it is not compulsory to do so.

How are labour costs defined?

The starting point used to calculate the wage bill comprises the salaries of the employees for social security purposes (based on current employment). The scheme also provides compensation for additional contributions and expenses, such as the pension contribution paid by the employer and the employees’ contributions, and the accrual of holiday pay. A 30% mark-up to cover these employer’s costs will apply in every case.

The maximum amount to be subsidised per individual employee is twice the maximum daily pay as calculated on a monthly basis. Salaries in excess of € 9,538 do not qualify for the Temporary Emergency
Bridging Measure for Sustained Employment.

What information is required for the application?

The following information is required in order to submit the application:

• Name of business, and payroll tax number.
• You must indicate the measurement period to be used for the comparison of turnover and can specify that you want the start of the measurement period to be deferred by one or two months. In such cases, the wage bills for March, April and May 2020 continue to be applicable.
• You must specify the turnover you expect to have during the measurement period. This turnover is compared with total turnover in 2019 divided by four, so that both turnover figures relate to a period of three months.
• The above information is used to calculate the percentage drop in turnover. This percentage is shown in the application form.
• The additional information included in the application form contains instructions that are to be followed in special situations (e.g. for businesses that were founded in 2019). Details of how to perform the calculation in such situations have not yet been provided.

Note: Businesses that have more than one payroll tax number must submit separate applications for each payroll tax number. These applications must indicate the drop in turnover that the employer expects for the business as a whole.

The application

UWV’s goal is to start implementing the scheme on 6 April. A final decision on this will be announced on Friday 3 April. If this decision is positive, it will be possible to submit applications for the Temporary Emergency Bridging Measure for Sustained Employment as from 6 April 2020. If this is not possible, the application submission period will start on 14 April 2020.

Note: The deadline for submitting applications is 31 May 2020.

Note: Applications for short-time working that were submitted before 8.45 a.m. on 17 March 2020, but which had not been dealt with by that time, will be treated as applications for a subsidy under the Temporary Emergency Bridging Measure for Sustained Employment. UWV will ask additional questions concerning matters such as the drop in turnover.

Advance

If the application is granted, UWV will advance 80% of the allowance as calculated on the basis of the information on the expected drop in turnover that is provided in the application. The advance will be paid in three instalments. In practice, UWV will aim to pay the first instalment within two to four weeks.

UWV will arrive at a formal decision within 13 weeks of receiving the fully completed application. The employer must submit a request to determine the final amount of the subsidy no later than 24 weeks following the end of the period to which the subsidy relates. In principle, an auditor’s opinion is required for this. The situations in which an auditor’s opinion is required are not yet certain. This will become clear within four weeks of the publication of the scheme.

UWV will determine the final amount of the subsidy within 22 weeks of receiving the request. When settlement takes place, the employer may receive a supplementary payment or may have to repay an amount, for example if turnover did not fall as much as had been expected.

More information to follow

Although some aspects of the scheme are not yet clear, we will keep you posted on all developments that relate to the Temporary Emergency Bridging Measure for Sustained Employment.

Knowledge dossier on our website

Do you want to know what possibilities are available to you for gearing your business processes to the measures taken so far in connection with coronavirus, or what you can do to help your business stay afloat? We have created a special page on our website, where our coronavirus team of specialists will share their knowledge with you in the coming months. Keep a close eye on that page so that you can make the right choices for your organisation. If you have specific questions about the impact on your organisation, please get in touch with your contact person at Moore DRV or complete the contact form below.