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Amendments to the NOW scheme with effect from 1 June 2020

From 1 March 2020, the Emergency Bridging Measure for Sustained Employment applies. Also known as the NOW scheme. As of 1 June 2020, this scheme will be continued for a period of four months.

Below I list the changes to the NOW scheme as of 1 June 2020. Partly, I also report what remains unchanged. For more information about the NOW scheme until 1 June 2020, I refer you to my blog Emergency Bridging Measure for Sustained Employment .

As of 1 June 2020, it remains unchanged that the scheme will not be at the expense of employees’ unemployment benefits.

Furthermore, it remains unchanged that a loss of turnover must be expected of at least 20% and that the contribution to the wage costs amounts to a maximum of 90% of the wage bill. The allowance for wage costs can be applied for from 6 July 2020 up to and including 31 August 2020 at the UWV.

The expected loss of turnover of 20% must relate to a continuous period of four calendar months in the period from 1 June to 30 November 2020 inclusive. Employers can choose whether they calculate the loss of turnover over the measurement period starting on 1 June, 1 July or 1 August 2020. This must always be a continuous period of four months.

For companies applying for the NOW scheme for the second time, the period must be in line with the period chosen in the first period. For example, if a company has applied for the NOW scheme for the period starting from 1 March 2020 up to and including 31 May 2020, this company – if it now applies for the NOW scheme again – will have to do so for the periode starting from 1 June 2020 up to and including 30 September 2020.

For example, if a company has applied for the NOW scheme for the period starting from 1 May 2020 up to and including 31 July 2020, this company – if it now again applies for the NOW scheme – will have to do so for the period starting from 1 August 2020 up to and including 30 November 2020.

The allowance will continue to apply to the full wage and salary bill in the sense that the employer’s contribution and the accrual for holiday allowance and the accrual for pension are also included up to a fixed amount. Until 1 June 2020, a lump-sum surcharge of 30% was calculated for this purpose. From 1 June 2020, a lump-sum surcharge of 40% will be applied.

The advance once again amounts to 80% and this time is based on the wage and salary bill for the month of March 2020.

Prohibition on profit distribution, distribution of bonuses and repurchase of own shares

For the NOW scheme from 1 June 2020 onwards, an employer or group using the NOW scheme may not distribute profits to shareholders, may not distribute bonuses to the board of directors and management, and may not repurchase own shares. This prohibition applies for 2020 up to and including the shareholders’ meeting at which the annual accounts are adopted in 2021.

This prohibition also applies to other companies and institutions that do not work through a shareholders’ meeting, such as cooperatives. For them, this prohibition applies up to and including the meeting at which the annual accounts are adopted in 2021.

The prohibition does not apply to dividends, bonuses and shares for 2019, as the decisions on these had already been taken, but were not paid out until 2020.

As far as bonuses are concerned, this will be limited to bonuses that are paid out to the board and management. The prohibition does not extend to other personnel working in the company who may be paid variable bonuses. Bonuses include both profit-sharing and other bonuses.

The prohibition only applies to employers who receive a subsidy amount for which an auditor’s report is required. The amount of that amount is not yet known.

Dismissal of employees

If an employer applies for an allowance and, during the period covered by the application, dismisses one or more employees for business economic reasons, the wage calculation is still corrected by the wage calculation of the employee(s) for whom dismissal has been requested for business economic reasons. Until 1 June 2020, this was increased by 50% as a fine. This fine will disappear. This relates to dismissal applications submitted in the period from 1 June 2020 up to and including 30 September 2020.

The protection against dismissal will remain in place. This means that the rules for dismissal due to business economic reasons, such as permission for dismissal from the UWV (Employee Insurance Agency), and the rules regarding transition compensation will continue to apply. The obligations from the Collective Redundancy (Notification) Act will also remain in force. Under the Collective Redundancy (Notification) Act (hereinafter referred to as: CRNA), applications for dismissal of 20 or more employees must always be reported to the trade unions, as a result of which consultations can be started.

In order to be eligible for the new NOW scheme, employers must state when applying for the NOW scheme from 1 June 2020 that, if the CRNA applies, they will consult with the trade unions about the intended dismissals for a period of 4 weeks and will not submit the application for dismissal until 4 weeks after the notification on the basis of the CRNA has been made.

The subsidy will be reduced by 5% if the employer makes a CRNA notification in the period from 30 May to 30 September 2020 inclusive and submits a request(s) to the UWV for the dismissal of 20 or more employees in the period from 1 June to 30 September 2020 inclusive. This reduction of the subsidy can be avoided if an agreement is concluded beforehand with the trade unions or the employee representation.

Training

Employers applying for the NOW scheme from 1 June 2020 will be obliged to encourage their employees to undergo training. Employers will make a statement about this when applying for the NOW scheme.

To support the initiatives of the social partners, the governement is allocating 50 million euros for this purpose, which will enable people to follow online training and development advice free of charge from July 2020 in order to adapt to the new economic situation.

In conclusion

Employers commit themselves to pay 100% of the salaries. An application for the NOW scheme is open to both employers who have already submitted an application in the period from 1 March 2020 up to and including 31 May 2020 and employers who are applying for the NOW scheme for the first time.

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About the author
Ilma van Aalst started working as a Dutch employment law attorney at the beginning of 2000 and thus works as a Dutch employment law attorney for more than 19 years now. Ilma first worked as a Dutch employment law attorney for more than ten years at Poelmann van den Broek in Nijmegen and Eversheds Sutherland in Rotterdam. In 2010, Ilma started 7 Laws of Persuasion. Since 2007, Ilma has been a member of the Dutch Employment Attorneys Association (Vereniging Arbeidsrecht Advocaten Nederland, VAAN), the association that received the quality mark logo for employment law specialists from the Dutch Bar Association. Since the beginning of 2016, she has been an intervision moderator recognised by the VAAN. She is also a member of the Rotterdam Employment Attorneys Association. In addition to her work as a Dutch employment law attorney, Ilma has also been working as a Dutch employment law lecturer since 2008.
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