NOW 2.0: support for an additional four months

NOW 2.0: support for an additional four months

NOW 2.0

The Dutch Temporary Emergency Bridging Measure for Sustained Employment (Dutch acronym: NOW) will be extended – in amended form – for a period of four months. The amended scheme is referred to as NOW 2.0. What does the new scheme look like?

NOW 2.0

If your business expects to suffer a drop in revenue of at least 20%, you can apply for a compensation of wage costs for the months of June, July, August and September. The Employee Insurance Agency (Dutch acronym: UWV) will accept applications for this scheme from 6 July 2020 onwards. If this is your second time invoking the NOW scheme, the revenue period must be consecutive to the period chosen in your first application. The extended NOW scheme uses the same compensation methodology, but there are some changes as well.

Key changes in NOW 2.0

  • The first version of the NOW scheme (NOW 1.0) applied a 30% margin to the wage bill, the reason being that the wage bill does not include employer-paid contributions to benefits and holiday allowance. This margin proved to be too low to reach 90% of the wage bill. That is why the margin will be increased from 30% to 40%. In raising the margin, NOW also offers compensation for costs other than wage costs.
  • The reference month for the wage bill will be March 2020. Under the NOW 1.0 scheme, the reference month was January 2020.
  • Businesses qualifying for NOW 2.0 cannot distribute dividends or pay bonuses for 2020 and up to and including the date of their Annual General Meeting of Shareholders in 2021, nor can they repurchase treasury shares if the compensation is € 100,000 or higher. Furthermore, a company using NOW 2.0 for 2020 and up to and including the Annual General Meeting of Shareholders in 2021 may not pay any dividend or bonus and may not repurchase its own shares if the advance payment to be received amounts to € 100,000 or more.
    This threshold does not apply to operating companies that have received a NOW subsidy as part of a group, they must always comply with it: no profit distribution to shareholders, no bonuses to the board and management, and no repurchase of own shares.
  • Under the NOW 1.0 scheme, businesses were subject to a redundancy penalty of 150% of the salaries of any employees laid off during the grant period. While, under the NOW 2.0 scheme, there will still be an adjustment for laying off employees, the grant will no longer be lowered if redundancies are made for economic reasons as the related reduction will total 100% rather than 150% of their salaries.
  • When applying for the NOW 2.0 scheme, businesses will be expected to sign a statement to the effect that they will consult with the trade unions if they plan to lay off more than 20 employees for economic reasons. This is in line with the rules for group redundancies. Employees will still be protected as usual under employment law. Businesses cannot lay off more than 20 employees if they have not reached agreement with a trade union or have asked the Dutch Labour Foundation to mediate. In the absence of such agreement or a mediation request, the total compensation under the NOW scheme will be reduced by 5%.
  • Finally, employers applying for NOW 2.0 will be expected to encourage their employees to undergo retraining and reskilling. They are required to make a statement to that effect when applying for NOW 2.0. To support the initiatives undertaken by employer and employee organisations, the Dutch government has decided to allocate € 50 million to a crisis programme by the name of The Netherlands Keeps Learning (in Dutch: NL leert door), which will allow people to take online courses and receive online career advice for free from July onwards to help them adapt to the new economic situation.

Changes in and clarification of NOW 1.0

To determine the maximum wage bill, NOW 1.0 also uses March rather than January as the reference month, but only if the wage bill for the months from March to May is higher than that for January to March. This is relevant for seasonal businesses and automatically applies to all employers whose average wage bill for the period from March to May is higher than for January.

A clarification has been made as well: the Dutch government had previously demanded an audit opinion on the final settlement of the NOW grant in some instances. A number of restrictions have now been defined to decide which organisations will be expected to submit an auditor’s report. Please contact your acconavm account manager if you want to find out whether you will be expected to submit an audit opinion on your application for the NOW scheme.

NOW 2.0 applications

Our Employer Services team in particular has assisted many international clients in applying for the NOW scheme. We would be happy to submit your application for the NOW 2.0 scheme for you as well. The scheme will be opened up for applications on 6 July. Please contact your acconavm account manager or send an email to international@acconavm.nl and we will get back to you as soon as possible.

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