NOW dilemmas

The Social Affairs and Employment Minister in a letter to the Lower House of the Dutch Parliament has reported on experiences of the NOW programme, as a scheme which is characterised by its generic format so that no allowances can be made for the specific conditions of particular businesses and business sectors. The Minister in his letter has elaborated on certain NOW-related dilemmas and the deliberations having been made with respect to the relevant scenarios.

Repayment

The (retroactive) finalisation of the NOW allowance by UWV, the Netherlands Employee Insurance Agency, can result in the recipient employer in question being instructed to pay back some of the previously received money, for example owing to its sales decline having turned out less severe than had been anticipated or to its wage bill having shrunk. The Minister in his letter has stressed that the choice of method for calculating the NOW allowance in scenarios involving a reduced wage bill has been quite deliberate. Job preservation always having been the ultimate goal of the NOW scheme, it follows that the employer’s need for support will fall off as its wage costs contract, the underlying position being that a sales decline in the amount of, say, 50 percent should enable the employer in question to foot 50 percent of its wage bill without outside assistance while having recourse to support for the remaining 50 percent.

The advance payments made under the NOW scheme have been based on the wages for the month of January, which for some employers is a month featuring an inflated wage bill due to special remunerations to staff other than end-of-year bonuses or holiday allowances falling due. The regime offers no latitude for weeding out such one-off payments from the wage bill. Selection of a “reference month” other than January was simply no option at the time the NOW scheme was first realised. The Minister in his letter has drawn specific attention to UWV’s distinctly lenient stance where it concerns the repayment terms to be adhered to by NOW recipients.

Wage bill reference month for NOW‑3 purposes

According to the Minister there has been no latitude for singling out a reference month other than June where it concerns the third tier of the NOW scheme (NOW‑3), as the month of June was the most recent month for which wage-related data where available at the time NOW‑3 came to fruition and the fact that this part of the scheme is now up and running precludes a belated switch being made to a more recent month.

Glitch in NOW‑2 payments

An administrative error in the system of payments being made by virtue of NOW‑2, this being the second tier of the NOW scheme, has resulted in NOW‑2 payments having inadvertently been made to 21 employers having started their businesses after the first of February 2020 (which would have rendered them ineligible for this part of the NOW scheme). The Minister has decided that the employers in question will not instantly be ordered to pay back the amounts in question.

Seasonal measure

Seasonal businesses have been given special consideration under the first tier of the NOW scheme (NOW‑1), by directing that those employers whose wage bill for the months of March to May 2020 inclusive is greater than triple the wage bill for January 2020 will have their finalised NOW allowance fixed on the basis of the aggregate wage bill for March, April and May to a maximum of triple the wage bill for March. The UWV-deployed application for calculating the level of finalised allowances has since been shown to be flawed in two places when used for businesses to which the seasonal measure applies, in that it uses the wrong reference date as well as basing its computations on triple the wage bill for March irrespective of whether the latter has turned out greater or smaller than, or identical to, the aggregate wage bill for March, April and May.

It having been decided that straightening out the calculation module would be unfeasible due to time constraints, the calculation of the allowance has been carried out manually in extremely anomalous cases, whereas the payroll returns for March between 15 May as the reference date and 19 July have been adjusted downward where the finalised allowances arrived at using the calculation module had turned out lower. The Minister has availed himself of the opportunity as per NOW‑1 of departing from the reference date of 15 May where the latter category of cases are concerned.

Bonus ban for operating company NOW applications

The submission of applications for NOW allowances at operating company level has been rendered subject to a bonus and a dividend ban. The dividend ban outlaws the distribution of dividends by the group of companies as a whole including where it concerns international business units and/or parts of the group that have refrained from filing NOW applications of their own. The bonus ban is exclusively targeted at Executive Board and Group Executive Committee members as well as applying to the applicant group company, and does not therefore extend to include those parts of the group that have refrained from filing NOW applications of their own.

Dutch version: Dilemma’s in de NOW