NOW 2.0 entered into force on 26 June 2020. Applications can be made in the period from 6 July 2020 to 31 August 2020. In this news item, we discuss the main elements in outline.
An employer with a turnover loss of at least 20% can request a compensation for wage costs for the period June, July, August and September 2020. With NOW 2.0, the employer can start the period for which the turnover decrease is determined on 1 June, 1 July or 1 August 2020. If the employer has also used the NOW 1.0, the chosen turnover period for the NOW 2.0 must correspond to the chosen period of the NOW 1.0.
If the employer belongs to a group, the drop in turnover of the entire group serves as the basis for the subsidy. An example is a parent company with several subsidiaries. The turnover determination must then be determined jointly. This does not apply if the application is made at operating company level, provided that (among other things) the group’s drop in turnover is less than 20% in the chosen turnover period.
The subsidy amounts to a maximum of 90% of the wage bill per month. This subsidy is based on a 4 month decline in sales from 1 June, 1 July or 1 August. The subsidy is a compensation for the wage costs for the period June to September 2020. This pay period applies to all applications and is independent of the chosen turnover period. Wages above € 9,536 per month are not eligible for compensation.
As with NOW 1.0, the subsidy is paid as an advance. Afterwards, the actual decrease in turnover and decrease in the wage bill over the chosen period will be determined, after which there may be a chargeback or back payment.
Increase in fixed wage bill to 40%, reference month wage bill in March 2020
The compensation also pertains to additional employer costs, such as employer contributions, pension contributions and holiday allowance. Based on NOW 1.0, this flat-rate surcharge was 30%. With the NOW 2.0 this is increased to 40%.
The reference month for the wage bill changes from January 2020 to March 2020
Reduction of fine in case of a dismissal for business reasons, extra fine for collective dismissal
In case of a dismissal for business reasons during the compensation period, the extra fine of 50% of the wages of the employees for whom the dismissal has been applied for, as stipulated in NOW 1.0, has been removed. The reduction on the subsidy will be reduced from 150% to 100% in NOW 2.0. This applies to dismissal applications in the period from 1 June 2020 to 30 September 2020.
An extra fine has been included for collective dismissals. If an employer reports to the UWV in the period from 30 May 2020 to 30 September 2020 about the intention of a collective dismissal, and applies for dismissal for commercial reasons for 20 or more employees during the subsidy period, the total subsidy amount will be reduced by 5%. The employer can prevent this by spreading the redundancies regionally, although this was probably not the cabinet’s intention. In addition, the fine can be avoided by agreeing with the unions or, failing that, agreeing with another workers’ representative on the need for the jobs to be lost. If no agreement is reached, the parties can turn to a committee of the Labour Foundation to assess the necessity of the jobs to be lost.
Prohibition of dividend and bonus payments and purchase of own shares
A condition for awarding the NOW 2.0 is that no bonuses and dividends may be paid over the year 2020. Distributions in 2020, over the year 2019, are permitted. This prohibition applies to employers or groups who jointly receive a subsidy advance of at least € 100,000 or the subsidy is set at a minimum of € 125,000. It is not important whether it concerns a Dutch or international employer; the prohibition applies to every employer who applies for the subsidy. In addition, the prohibition only applies to the employer who submits the application and therefore not to the other employers within the group, unless they submit a subsidy application themselves or an application has been made at operating company level.
The ban is limited to the board and management. This includes board members, directors and members of the management team who determine policy. Variable pay through bonuses to the rest of the staff is allowed.
If the application is made at the operating company level, this prohibition applies to the entire group, the group or the parent company. The employer must declare, before the application, that the parent company complies with the obligation and that the rest of the group complies with it.
Best efforts obligation to stimulate retrain and extra training
Under NOW 2.0, the employer must encourage his employees to request development advice or to participate in training. When applying for a subsidy, the employer must declare that he meets this obligation to make an effort. Employers can encourage employees by, for example, making time or resources available and pointing out the importance of training and development in individual personnel interviews. There is a role for the works council or staff meeting to encourage employees and to hold the employer accountable.
The Cabinet is allocating a budget for the NL learning crisis program, where people can follow online training and development advice free of charge.
The employer to whom the subsidy is granted is obliged to submit a statement from an accountant when applying for the (definitive) determination of the subsidy. The employer to whom the total advance that has been granted is less than € 100,000 and the employer whose total subsidy is set at less than € 125,000, are exempt from this obligation.
If the employer is part of a group and the application has been made at operating company level, an audit report must always be submitted.
With an advance of at least € 20,000 (but less than € 100,000) or if the total subsidy is set at least € 25,000 (but less than € 125,000), the fall in turnover must be demonstrated by a statement from an expert third party (such as a bookkeeper or administrative office).
Disclosure of NOW applications
Grant applicant names, including advances granted and grants identified, may be published for transparency reasons. This is possible because the subsidy falls under the Government Information (Public Access) Act (in Dutch: ‘WOB’).