The Minister of Social Affairs and Employment announced on 20 May 2020 that the Dutch Emergency Fund Bridging Employment, known as the NOW (Noodmaatregel overbrugging voor behoud van werkgelegenheid), will be extended to cover the months of June, July and August 2020 in the form of the NOW 2.0. The Minister also announced some amendments to the NOW 1.0, which covers the months of March, April and May 2020. Please find a link to our article on the NOW 1.0 here. Below you will find the relevant differences between the NOW 1.0 and the NOW 2.0 and the amendments to be made to the NOW 1.0.

Differences between the NOW 1.0 and the NOW 2.0

The NOW provides financial aid to companies suffering at least a 20% turnover loss during 3 months in the form of a substantial contribution towards the wage costs in the chosen 3-month period, i.e. March-May, April-June or May-July. What is different in the NOW 2.0?

• Applications under the NOW 2.0 can be submitted between 6 July and 31 August 2020.
  Under the NOW 1.0 the amount of wage contribution awarded is calculated based on the wage sum of the ‘reference month’ January 2020. The reference month under the NOW 2.0 is March 2020.
• Both employers who have applied for wage contribution under the NOW 1.0 and those who did not can apply for wage contribution under the NOW 2.0.
• Under the NOW 1.0 an employer is fined for dismissing employees for business economic reasons as an amount equaling 150% of the calculated wages of the employees involved is deducted from the wage contribution awarded to the employer. Under the NOW 2.0 this fine is reduced to 100% of the wages of the employees involved.
• In cases where the Collective Dismissal Act (Wet melding collectief ontslag) applies, the employer must state in its NOW 2.0 application that it will consult with the unions involved in the business on the contemplated dismissals and that the individual dismissal applications will not be submitted within four weeks after the Collective Dismissal notification.
• An employer applying for wage contribution under the NOW 2.0 is not allowed to pay dividends and/ or bonusses, or to buyback shares in 2020 up to and including the date of the general meeting of shareholders in which the annual accounts over 2020 are adopted. The prohibition to pay bonuses only applies to the board of directors and management and not to regular employees. These obligations will only apply to employers receiving wage contribution for which an accountant’s statement needs to be submitted to the Dutch Labour Office (UWV).
• Under the NOW 1.0 the wage sum forming the basis for calculating the wage contribution was increased by 30% for fixed employer expenses such as holiday allowance, social security contributions and pension premiums. Under the NOW 2.0 the 30% will be increased to 40%.
• Employers are required to make an effort to stimulate their employees to do extra training or retraining.

Relevant changes under NOW 1.0

As indicated, some amendments to the NOW 1.0 will be made.

• Under the NOW 1.0 the wage contribution awarded is calculated based on the wage sum of the ‘reference month’ January 2020. Often, the wage sum over January includes payment of a so-called ‘13^th month payment’, which is not representative for the ‘regular’ wage sum of the employer. Therefore, in case a 13^th month payment is included in the wage sum over January 2020, this will be filtered out of the wage sum of the reference month and will not be considered for the calculation of the subsidy amount.
• An adjustment for seasonal work will be made to the NOW 1.0. For employers with a higher average wage sum in March, April and May 2020 than in January 2020, the final wage contribution will be paid towards the average wage sum over March, April and May instead of over January. Any further increase in the wage sum after March is not considered in the wage contribution calculation. The wage sum over March is considered the maximum. These new rules will apply automatically to all cases in which this leads to a higher wage contribution.
• A special arrangement is created for companies (employers) having acquired another company prior to the NOW 1.0 application. Under the NOW 1.0 the wage contribution depends on the percentage of turnover loss of the employer. To calculate the turnover loss, the turnover in the chosen 3 month period (between March-July, see above) is compared with the average turnover over the entire calendar year 2019. In cases where the acquisition took place prior to the NOW, the above comparison cannot be adequately made. Therefore, it was announced that in these situations the employer can take the period after the acquisition as a reference period for the calculation of the turnover loss. In addition, in case the average wage sum of the employer in March, April and May 2020 is higher than in January 2020, the final wage contribution for these employers will be based on the average wage sum over the months of March, April and May 2020, capped by 3 times the wage sum over March 2020.

As soon as the new legislation will be published, we will inform you in more detail on our website. Please don’t hesitate to reach out in case of any questions in the meantime.