Extension NOW accompanied by austerity and phasing out
The government has recently extended the Temporary Emergency Bridging Measure for Sustained Employment (NOW) by three periods of three months. The first period starts on 1 October 2020, the second period on 1 January 2021 and the third period on 1 April 2021. The loss of turnover that must have been incurred to be able to claim the NOW 3.0 will remain 20% in the first period. From the second period it will be possible for businesses that have incurred 30% or more loss of turnover to apply for the NOW.
Lowering of the reimbursement rate
The reimbursement rate of 90% under NOW 1.0 and 2.0 will be lowered to 80% in the first period of the NOW 3.0. The government aims to use the 10% difference for training and job-to-job transitions for employees. Afterwards, the reimbursement rate will be lowered gradually per period: in the second period the reimbursement rate will be 70% and in the third period 60%.
Modification of business operations
The longer the crisis lasts, the more the businesses that suffer long-term loss of turnover must be able to modify their business operations. Besides the funds for the transition to a job, in the NOW 3.0 the cabinet therefore offers employers the opportunity to decrease the wage sum without this being expressed in a reduction of the subsidy. The exemption rate for the wage sum will rise from 10% in the first period to 15% in the second period and to 20% in the third period. The penalty for dismissal for economic reasons (which had already been reduced in the NOW 2.0) will therefore lapse. The employer can decide in consultation with the employees or their representatives if and if so, how he wants to reduce the wage sum. The cabinet gives as examples natural attrition, dismissal, or a voluntary pay cut.
The maximum wage to be reimbursed per employee will remain twice the maximum daily wage at most in the first two periods, which comes down to € 9,538 per month. In the third period this will be reduced to once the maximum daily wage at most.
What will remain the same?
In the NOW 3.0, businesses will remain obliged to stimulate additional training or retraining. The prohibition on paying bonuses and dividend will continue to exist. The fixed (flat rate) surcharge for employers’ contributions, such as holiday allowance and pension premiums, will remain 40%. Finally, just as in the NOW 1.0 and 2.0, an employer will receive an advance payment of 80% of the subsidy amount and the remainder on determination.
Applications from 16 November
The next application period will be opened on 16 November 2020, as of which an application can be submitted for the first period (1 October 2020 to 31 December 2020). The second period runs from 1 January 2021 to 31 March 2021 and the third period runs from 1 April 2021 to 30 June 2021. The employer may choose per period whether he wants to submit an application. Final determination of the NOW 3.0 will take place after the end of the three periods.
Do you need more information on this subject? Or do you need help with an application? Then please do not hesitate to contact Nienke Lemmink or one of the other employment lawyers of Employment Advisory. Do you have other business-related questions as a result of the corona crisis? Then see our special information pages about corona.