Details of third version of NOW scheme

The Social Affairs and Employment Minister in a recent letter to the Lower House of the Dutch Parliament has provided details of NOW‑3, this being the third version of the government’s NOW (Employment Bridging Emergency Fund) scheme. Showing considerable similarity to its predecessors, NOW‑1 and NOW‑2, the NOW‑3 scheme is to cover the period from the first of October 2020 to the first of July 2021.

The NOW‑3 scheme is to enable employers to reduce their wage bill to a certain extent without jeopardising the level of support for which they are eligible. The overall term of the NOW‑3 scheme has been divided into three periods. The first of these commenced on the first of October last and expires at the current year-end and comes with a subsidised maximum in the amount of 80 percent of the wage bill in conjunction with a wage bill reduction of 10 percent. The second period runs from the first of January to the 31st of March 2021 inclusive, throughout which trimester a subsidised maximum of 70 percent of the wage bill is to be combined with a wage bill reduction of 15 percent. The third and final period, from the first of April to the 30th of June 2021 inclusive, is to feature a subsidised maximum of 60 percent of the wage bill in combination with a wage bill reduction of 20 percent. Similarly to NOW‑2, a 40 percent flat-rate subsidy surcharge is to apply throughout all three periods. In order for a business to qualify for the scheme, its loss of turnover should total 20 percent or worse during the first of the three NOW‑3 trimesters followed by 30 percent or worse during the second and third trimesters, in addition to which an additional restriction is to apply to the third and final trimester by having the wage calculation to be deployed based on the maximum daily wage (at 4,845 euros per month) rather than on double the maximum daily wage (which would work out at 9,691 euros per month).

The 5 percent reduction of the subsidised amount in scenarios involving redundancy for economic reasons as per NOW‑2 has been eliminated from the NOW‑3 scheme. A newly introduced element is that employers are now under a “best effort” duty to help ensure that any employees they are having to let go should succeed in finding alternative employment.

A further difference between NOW‑2 and NOW‑3 is that NOW‑3 has abolished the docking in its entirety of the wage of any employee who is being made redundant for economic reasons from the subsidy for the entire term of said subsidy. Rather, the NOW‑3 scheme is to entitle the employer to being subsidised for the wage costs throughout the entire term of the subsidy for as long as the employee whom it concerns remains in service while the term in question is under way. Any employer which has demonstrably failed to live up to its “best effort” duty to help ensure that those of its workers it has had to let go should succeed in finding employment elsewhere runs the risk of being penalised in the amount of 5 percent of the subsidised amount for failure on its part to liaise with UWV, the Employee Insurance Agency, as part of facilitating the job-seeking process.

Similarly to its predecessors, NOW‑3 too includes a ban during each of its three trimesters on dividends or bonuses being paid out or shares in the business’ own capital being repurchased. The method of calculating the loss of turnover has not changed either, in that a quarter portion of the business’ 2019 turnover is to be compared with the turnover achieved for a period – to be pinpointed at the employer’s discretion – of three (consecutive) months in 2020. The employer has the option for each of the three NOW‑3 “tiers” to choose the period – which has to commence on the first day of a calendar month that comes within the period in question – to be used in calculating its loss of turnover. Employers which had already successfully applied for the NOW‑2 scheme are moreover to ensure that the period for calculation their loss of turnover should dovetail time-wise with the period they used when applying for admission to NOW‑2.

Each of the advance payments for the three NOW‑3 periods is to be based on the wage bill for June 2020, or on a proportionately reduced amount where the wage bill for the period in question had sustained a greater drop than it should have. For example, a 20 percent reduction in the wage bill for the period from the first of October up to an including the current year-end (the first “tier”) would boil down to a 10 percent “excessive” drop, which in turn would cause the subsidy to be calculated on the basis of a 10 percent rather than the entire 20 percent reduction, so that the employer in question would collect 80, 70 or 60 cents less (depending on which of the three “tiers” it concerned) for every euro by which the wage bill had excessively dropped compared with the reference period.

NOW‑3 applications for the first period can be submitted from the 16th of November to the 13th of December 2020 inclusive. Successful applicants are to receive advance payments – to be made available in three consecutive instalments – to a total of 80 percent of the subsidised amount. Applications for the second and third NOW‑3 “tiers” can be made from the 15th of February to the 14th of March 2021 inclusive and from the 17th of May to the 13th of June 2021 inclusive, respectively. The application for having the subsidy for each of the three consecutive periods assessed can be made from the first of September 2021 onwards. N.B. Application needs to be made separately for each of the periods in respect of which the employer has been subsidised.

Dutch version: Uitwerking NOW-3