On March 31, the NOW program was introduced. Through the NOW program employers may receive compensation up to 90% of their wage costs. Since its entry into force is has shown several flaws which are recognized by the Dutch government. The third amendment of the NOW program was published May 20, 2020. More employers should be eligible to receive compensation under the NOW program.
Seasonal companies
Seasonal companies have a periodical turnover peak and often employ more staff in March than in January. Such companies may not be able to benefit from the NOW program due to the change in wage bill as basis of the compensation calculation. The current NOW program (1.0) is amended: the compensation increases if the employer had a higher wage bill in March, April and May than in January (before the amendment the calculation would only take into account three times the wage bill of January). Under NOW 2.0, March becomes the reference month for the wage bill.
0-declaration
Employers with a 0-wage bill in January 2020, or no wage bill in January 2020 and November 2019, and who do have a wage bill in March 2020, may still qualify for the current NOW 1.0 program due to the aforementioned change.
Surcharge
Under the NOW 2.0 program, the fixed (flat-rate) surcharge will be increased from 30 to 40%. The NOW program also contributes to costs other than labor costs to further support employers in maintaining employment.
Disclosure
The NOW is publicly funded. The name of an applicant, including the advances granted and the subsidy established, can be made public without first having to request an opinion. The executive institution UWV is requested to make this information public. The information will be published on the UWV website from the end of June.
Business acquisitions
Sometimes companies that have recently been taken over cannot (sufficiently) benefit from the NOW program. This is solved for some of the companies by applying the existing provision in the NOW for start-ups in 2019 to 1 February 2020. The scheme for start-up companies assumes that a company will start no later than 1 February 2020, because otherwise no relevant reference month for turnover is available. The change in the wage provision for seasonal companies can also offer a solution for company takeovers.
Auditor's opinion
An auditor’s opinion would be compulsory in certain cases when the NOW subsidy was definitively determined. Further details were yet to be disclosed. Two thresholds have been published in this respect.
- An auditor's opinion will be made compulsory for companies that have received an advance (80% of the advance) of € 100,000 or more.
In order to prevent an applicant from receiving a low advance, but nevertheless receiving a subsidy that is (substantially) higher than € 125,000 (without having to submit an auditor's report), an auditor’s opinion has to be provided in case of a subsidy of € 125,000. - If an auditor's opinion is not required to be submitted – a third party statement has to be provided in case of an advance exceeding € 20,000 or a final compensation for the amount above € 25,000. This may be, for example, an administrative office, financial service provider or branch organization.
In other cases, the employer is responsible for the information he provides when applying for and determining the subsidy. With regard to turnover and wages, the employer must manage such verifiable records that it can be checked afterwards whether a subsidy has been justified.
Requests for a determination that do not require an auditor's opinion are randomly checked.
Application period
Due to the changes, more employers should be able to benefit from the NOW program. The application period is extended from May 31 to June 5 because of the two new possibilities included in the NOW: the possibility to also look at the months of March, April and May for the calculation of the wage bill and the possibility to adjust the turnover in a different way when a company is transferred.
As a result, employers who were not initially eligible for a NOW grant may still be able to apply successfully. The changes will apply retroactively. As of May 20 until June 5, employers can therefore make use of these new options in the current scheme.
Thirteenth month
Due to the mechanics of the NOW program, entrepreneurs who paid a thirteenth month in January could be insufficiently eligible for the NOW. The executive institution UWV will eliminate this for the final settlement in case the thirteenth month can be found in the policy administration.
Our Corona Crisis Team will be able to assist you with your NOW application.
