On March 31, 2020, the details of the temporary emergency bridging measure for sustained employment (NOW) were published in a letter to parliament. The highlights of this measure are as follows.
- The NOW supports employers who are confronted with a turnover decrease of at least 20% over a connected period of 3 months. An employer only has to demonstrate that extraordinary circumstances contribute to the drop in turnover and that the total decrease in turnover amounts to at least 20%. It is not necessary to demonstrate to what extent the decrease in turnover is due to the special circumstances.
- The decrease in turnover is determined by comparing the (expected) turnover for the period March to May 2020 by 1/4 of the turnover of 2019.
- In order to qualify for the NOW, employers must commit not to lay off staff for economic reasons in the period from March 18 to May 31, 2020. If an employer nevertheless applies for dismissal for economic reasons for this period, the NOW allowance will be reduced.
- The NOW is in line with the social security insurance for employees. Foreign employers with staff that is subject to Dutch social security can therefore also apply the NOW. Conversely, a Dutch employer cannot claim NOW compensation for employees who are covered by social insurance abroad. Please contact our Corona Crisis Team for information on compensation in neighboring countries.
- Because the NOW is in line with the social security insurance for employees, an uninsured and voluntarily insured DGA cannot benefit from this scheme.
- The NOW also applies to the wage costs for employees for whom the employer has no obligation to continue to pay wages, such as employees with a zero hour contract. The cabinet calls on employers to take responsibility for their flex workers and to continue to pay flex workers' wages as much as possible. However, this is not included as a condition in the NOW, which means that the employer can choose not to continue paying and therefore not to ask NOW for those employees.
- The NOW allowance amounts to a maximum of 90% of the wage bill over the three-month period from March 2020 to May 2020. The wage bill is based on the social insurance wages from current employment plus 30%. A maximum of twice the maximum daily wages per month per individual employee is taken into account. Wages above €9,538 per month are therefore not eligible for the NOW allowance.
- The application for NOW with the Unemployment Agency (UWV) is open as of April 6, 2020.
- The UWV does not require e-Recognition for the NOW application but your wage tax return and wage tax number.
International aspects
Foreign employers
Employers can receive a NOW allowance insofar as it relates to wages paid to their employees are covered by social insurance for employees in the Netherlands. It is not relevant in which country the employer is established. Foreign employers are therefore eligible for the NOW allowance insofar as they employ employees who are insured in the Netherlands (SV-loon).
Turnover
The decrease in turnover is determined at group level (concern). Only the turnover of Dutch group companies and non-Dutch group entities with employees subject to Dutch social security are taken into account to determine the drop of turnover for the group. Non-Dutch legal persons or natural persons without wages that are subject to Dutch social security are not taken into account for the calculation of the decrease in turnover of the group. The underlying reason is that the link with the preservation of employment in the Netherlands is deemed so small that it is not justified to include the (drop in) turnover of such companies in the group calculation.
Dutch bank account requirement
Your foreign bank account number could possibly be connected to the payroll tax number. Technical implementation difficulties deny the executive body, the UWV, to handle a subsidy application in which a foreign bank account number is provided. Employers with a foreign bank account number may provide the UWV with a Dutch account number within four weeks of the application. The subsidy will be paid on that Dutch account number. This additional requirement which is not included in the legislation gravely frustrates international practices. Practice shows the impossibility of opening a Dutch account number within that time frame. Furthermore, banks are currently focusing on their existing clientele and are less willing to open bank accounts. Several questions have already been raised in this respect and we continue to closely monitor any developments on this area.
Qualification
According to the Dutch government the NOW does not qualify as an unemployment benefit under the Social Security Coordination Regulation (Regulation (EC) 883/2004). Unemployment has not yet set in, so the NOW measure does not cover the risk unemployment. Moreover, it is a general amount paid to the employer and it does not specifically refer to the loss of working hours of the individual employees.
On the Corona page of Bol International you will find current up to date information and all contact details of our specialists from the Corona Crisis Team.
