Since April 2020, employers could receive a subsidy in the form of compensation for wage costs on the basis of the “Temporary emergency measure transitional regulation for preservation of employment” (“NOW”). We have discussed the substance of the NOW 1 up to and including 4 in previous articles. The NOW ended on 30 September 2021.
On 26 November 2021, a return of the NOW was announced. This means that starting from 1 November, businesses can again claim compensation for their wage costs. Below, we will present you with an overview of the main starting points of the NOW 5.
NOW 5
- Like in the previous versions of the NOW, a decline in turnover of 20% is required in order to be eligible for the subsidy.
- The amount of the subsidy will depend on the employer's decline in turnover. Under the NOW 5, the maximum subsidy percentage is 85%.
- During the subsidy period, the wage bill is allowed to decrease by 15% without any adverse effects on the subsidy.
- The wage bill of September 2021 is taken as the reference wage.
- Under the NOW 5, the maximum wages to be compensated per employee will remain at twice the maximum daily wage (€4,906.15 gross per month).
- Under the NOW 5, the fixed surcharge to cover employer's costs like holiday allowance and pension contributions is set at 40%. To calculate the amount of this subsidy, the wage bill is increased by this percentage.
- The reference turnover is the turnover of 2019, divided by 6 (except for start-ups; see below).
- Starting from 27 November, employers are under a best efforts obligation to help guide employees who lose their jobs towards a different job. If an employee is dismissed between 27 November and 31 December, the employer will have to inform the UWV of this by telephone.
- Like the previous schemes, the NOW 5 also includes a ban on paying bonuses and dividend. This ban applies to the whole year of 2021.
Start-ups
Companies that had started after 1 February 2020 were not eligible for previous tranches of the NOW scheme. This will change under the NOW 5. A subsidy may be granted to a company if it has started ultimately on 30 September 2021. The reference turnover of such companies will be calculated on the basis of their turnover within the period between 1 July 2021 and 31 October 2021.
Concurrence with the WTV
Since October 2021, the short-time working arrangement (Werktijdverkortingsregeling, “WTV”) is back in force again. The WTV does not apply to corona-related applications. Therefore, the WTV and NOW 5 can continue to co-exist, and the WTV will not be repealed for that reason. If an employer receives unemployment benefits for an employee within the framework of the WTV, those benefits will be designated as turnover for the purpose of the NOW 5. As a consequence, an application for WTV may affect the level of the NOW subsidy.
Conclusion
Employers will soon be able to apply for an advance to the subsidy under the NOW 5. The Dutch Cabinet aims to open the desk for applications in December, and to make it possible for advances to the subsidy still to be paid out in December. This advance will be paid out in one instalment. It will be possible to apply for the final determination of the subsidy as of 1 June 2022.
If you have any questions about the NOW 5, please contact Eylard van Fenema.
