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Do you employ staff and do you suffer a substantial turnover loss as a result of the corona crisis? You can claim a compensation towards wages from NOW: Temporary Emergency Bridging Measure for Sustained Employment (Tijdelijke Noodmaatregel Overbrugging voor Werkbehoud NOW).
The NOW-scheme replaces the unemployment benefit during short-time working (wtv). You can no longer apply for unemployment benefit during short-time working.
What is NOW?
Due to the coronavirus, you have less or no work for your employees. You can claim NOW for a substantial compensation for their wages. This way, you can continue to pay employees with permanent and temporary contracts. The Employee Insurance Agency (UWV) will pay you an advance. You can apply for compensation of wages for employees with a permanent or fixed contract as well as for employees with a flexible contract. You can find more information on which employees you can apply for on the government’s website (in Dutch).
NOW 1 and 2
Application for NOW 2 is closed. For the months June through September 2020 you could apply for NOW 2 (in Dutch) through 31 August 2020. Application for NOW 1 for the months March, April and May 2020 has been closed since 5 June 2020.
NOW 3 (in Dutch) is an extension of NOW until 1 July 2021 and consists of 3 periods of 3 months each. This means you can apply for 3 months at a time. During the first period (October-December) the limit for your turnover loss percentage will remain 20%. From 1 January 2021 this percentage will be increased to 30%. You can apply for NOW 3 for the months October, November and December retroactively from 16 November until and including) 13 December 2020.
Conditions if you want to claim NOW 3
You can apply for NOW 3 under these conditions:
- For Now 3 you expect to lose at least 20% turnover over the period October through December 2020. You expect a turnover loss of at least 30% for both 3 month periods from January 2021 through June 2021. You can use the Dutch-language calculation tool to help you calculate your turnover loss.
- Subsidiaries that suffer a turnover loss of 20% or more (or 30% and more from 1 January 2021) can apply even if the business group’s total turnover loss is below this threshold. They must of course fulfil all general requirements and those for subsidiaries (see below). They should also be a legal entity.
- The wage costs reference month is March 2020.
- For NOW 3 you may gradually (i.e. per period) decrease the total wage bill with 10%, 15% and 20%.
- You pay your employees in full (100%).
- You must use this compensation to pay wage costs, employer's contributions, holiday allowance, pension contributions and the like.
- The surcharge for the accrual of among others holiday allowance, pension contributions and other employer’s contributions will be 40%.
- You must inform your employees or works council if you have been granted this compensation.
- If you want to dismiss 20 employees or more on economic grounds (collective dismissal), you must comply with the Dutch Notification of Collective Redundancies Act (Wet melding collectief ontslag, WMCO).
- You are obliged to stimulate your employees to take retraining or reskilling courses. You will have to include a statement with your application. The subsidy scheme called NL Leert Door has been launched for this purpose. Employers can also find initiatives to exchange employees, offer or find jobs and services and more on the Dutch-language website NLWerktDoor! (NL keeps on working!).
- You are not allowed to pay out bonuses or dividend for 2020 (for the 1st period of NOW 3) and 2021 (for the 2nd and 3rd period) and you may not buy (back) your own shares.
- You have to keep verifiable records of all information of relevance. You must be able to make these records available until 5 years after this compensation has been granted.
- The employer must submit a payroll tax return under the 1964 Wage Tax Act at the prescribed times.
- You must notify UWV of anything that happens that may affect a decision to change, repeal or determine the compensation.
- After your subsidy period, you must report your final turnover loss, accompanied by an auditor's report (in Dutch).
- If you want to apply for NOW 3 it makes no difference whether or not you applied for NOW before. If you apply for the first time from 16 November, the period for turnover loss you apply for can start from 1 October, 1 November or 1 December. If you have applied before, the periods for turnover loss must be consecutive.
- If you receive wage subsidy, you must notify the municipality that provides this that you are granted NOW.
- You will need to submit a statement from an accountant for claims that exceed €125,000 and for advances that exceed €100,000.
- UWV will publish names, allocated advances and the determined compensation on their website.
Key conditions for business group subsidiaries
Business groups can also apply for support through the NOW measure for operating companies that suffer turnover loss of the applicable percentage or more. This applies even in case other business units do not suffer turnover losses or even make a profit. Key requirements have been drawn up for this extension:
- The business group may not pay out bonusses or dividend over 2020 and 2021 nor may it buy its own shares. They must draw up a statement regarding this and keep this statement in their administration.
- Operating companies for which NOW is claimed must make arrangements on maintaining employment with trade unions or employee representation.
- The applying operating company must be a legal entity in its own right.
- Business groups with Dutch and foreign subsidiaries may not count turnover loss from subsidiaries that do not pay Dutch social insurance contributions on wages.
- Other subsidiaries may not carry out projects or assignments at the expense of the subsidy requesting subsidiary that would normally carry out the work.
- If you shift staff during the subsidy period to another subsidiary, the turnover loss will be adjusted accordingly in the final settlement
- The transfer pricing system may not be adjusted. The system used for your financial statements for 2019 is leading.
- Changes in stocks of finished products are allocated to turnover. This limits the risk of shifting stocks.
- An intra-group secondment operating company (personeels-bv) within the group cannot apply.
Read more on the conditions for NOW (in Dutch).
How much compensation for wages can you claim?
The compensation for wages you can claim depends on the turnover loss. For NOW 3 the compensation will be gradually decreased every 3-month period: from 80%, to 70% and to 60%.
- If the turnover loss is 100%, the compensation will amount to 80, 70 and finally 60% of wages
- If the turnover loss is 50%, the compensation will amount to 40, 35 and finally 30% of wages
- If the turnover loss is 25%, the compensation will amount to 20% for October through December, from 1 January 2021 the turnover loss limit is 30% and thus you will receive no compensation if your turnover loss is 25%
As a counter measure it will be possible for employers to decrease the wage bill gradually (every 3-month period) with 10%, to 15% and to 20% without this being at the expense of the compensation.
Based on your application, the Employee Insurance Agency (UWV) will pay you an advance of the expected compensation. The actual turnover loss will be determined afterwards. When determining the definitive compensation, a correction can be made if there has been a decrease in wages.
Final settlement NOW 1
For NOW 1 companies have received an advance payment of 80% of the amount they applied for. The final settlement is based on the actual turnover loss. This means advance payment may be supplemented, but if a company has performed above expectations, they may have to pay back (part of the) payment. The amount of the subsidy will also be lowered if the total wage bill has decreased during the period for which you applied for NOW 1.
Conditions vary depending on the amount of subsidy you applied for:
- You applied for a subsidy of less than €25,000 and the advance payment did not exceed €20,000.
No external check is needed. There will be random checks and risk analyses
- You received an advance payment of between €20,000 and €100,000.
You need a third-party statement. This statement may be issued by an administration office, a tax consultant bookkeeper or accountant.
- You applied for a subsidy of €125,00 or more.
You need an auditor’s opinion. This also applies if you received an advance payment of less than €100,000 but the amount of the subsidy is determined at €125,000 or more in the final settlement. The intensity of the audit depends on the amount of the subsidy (€375,000 or more) and whether or not a company has a mandatory audit of their annual accounts. Of these companies more accountability is expected and if they lack in this respect, the subsidy needs to be repaid. The competent authority together with the Royal Netherlands Institute of Chartered Accountants (Koninklijke Nederlandse Beroepsorganisatie van Accountants, NBA) has drawn up an accountants protocol (in Dutch) with requirements for the audit. Dutch-language forms for assurance reports are available on the government's website.
Please note: You will have to estimate the amount of the settlement yourself. You can use the Dutch-language simulation tool to make this assessment.
If there are deficiencies in your accounts that are a result of the corona crisis, so-called inherent limitations, a reduction of 10% of the subsidy amount will be applied.
You can apply for the final settlement to the Employee Insurance Agency (UWV, in Dutch) from 7 October 2020 until and including 23 March 2021. If you need a third-party statement the same period applies to request your final settlement. If you need an auditor’s opinion you can apply up to and including 29 June 2021.
How to apply?
You can apply for the 1st period of NOW 3 (October through December 2020) from 16 November through 13 December 2020 to the Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV). Read more on how to apply (in Dutch).
You will have to apply anew every 3 months. For the 2nd period (January-March) of NOW 3 it is expected you can apply from 15 February until (and including) 14 March 2021 and for the 3rd period (April-June) the aim is 17 May through 13 June 2021.
Can you still apply for unemployment benefit during short-time working (wtv)?
No, that is no longer possible. If you have already applied for wtv, you will be notified. The Employee Insurance Agency (UWV) will treat your wtv application as a claim for NOW compensation. Read why the wtv has been cancelled and what you should do if you have already been awarded wtv.
KVK Advice Team for questions about corona
Is your business at risk due to corona? Contact the Netherlands Chamber of Commerce KVK for advice on how to act. You can reach the KVK Advice Team on 0800 2117, Mon-Fri from 8:30 to 17:00 hours. Calling from abroad? Dial +31 (0)88 585 2222.