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Temporary Emergency Bridging Measure for Sustained Employment (NOW): submit your application from the 6th of April

Temporary Emergency Bridging Measure for Sustained Employment (NOW): submit your application from the 6th of April

The government has taken a considerable number of measures to support business owners during the corona crisis. The Temporary Emergency Bridging Measure for Sustained Employment (NOW) is one of those measures and is a contribution towards the labour costs for companies that now suffer a decrease in turnover, with the aim of maintaining employment as much as possible. On Tuesday the 31st of March, the government revealed the details of these rules. You will read more about this on this page.

The employee insurance agency UWV endeavours to enable companies to submit an application from the 6th of April. Companies that meet the requirements can expect an advance within two to four weeks.

Note: Formally, the UWV has 13 weeks to pay the advance so, in some cases, you may have to wait more than four weeks for the advance.

The NOW in a nutshell:

  • The NOW replaces the arrangement for a reduction in working time.
  • As an employer, you can submit an application for a substantial contribution towards the labour costs, and receive an advance on this contribution from the UWV under the obligation to refrain from laying off employees.  
  • As an employer, you endeavour to keep wages as equal as possible and to continue paying employees with a permanent or flexible contract.  
  • The NOW supports employers who are faced with a decrease in turnover of at least 20% over a continuous three-month period.
  • As an employer, you have the obligation to use the benefit entirely for paying your due labour costs. As an employer, you have the obligation to inform the works council, the employee representation, or, in the absence of one, the employees about the grant of the benefit.         

What conditions do you have to fulfil to be eligible for a contribution towards the labour costs under the NOW emergency measure?

  • By submitting an application, you accept the obligation to refrain from applying for a dismissal order with regard to your employees for business-economic reasons, during the period that the contribution relates to.  
  • You expect a decrease in turnover of at least 20% from 1 March 2020. The turnover in this measuring period is compared to the turnover from 1 January 2019 to 31 December 2019 divided by four.
  • The amount of the contribution towards the labour costs depends on the decrease in turnover. The government has chosen to take the decrease in turnover as a starting point, because a smaller turnover means that there is less money available to pay salaries. Additionally, a decrease in turnover is a measurable and verifiable criterion.  
  • The application is valid for a period of three months, which can be extended by another three months once (such extension may be subject to further conditions);
  • The maximum benefit is 90% of the total wages over the three-month period. The starting point for the total wages is the social security wage from present employment. Additional expenses and costs, such as employer's contributions and employee's contributions to pension and the holiday allowance build-up, will be compensated for.
  • The wage that is taken in to account is up to twice the maximum daily wage per individual employee. Wages in excess of €9,538 per month are not eligible for the benefit.  
  • You apply for a benefit for the wages of March, April, and May in relation with a decrease in turnover of more than 20%.
  • You can indicate your wish to have the three-month measuring period for turnover comparison start one or two months later (on the 1st of April or the 1st of May), if you expect that the effect of the present situation will be visible in the turnover figures later. You must choose the measuring period when submitting your application. The measuring period cannot be changed when the final settlement takes place. The total wages that the benefit is based on will be the total wages of March, April, and May 2020 even in these cases.
  • If you have more than one wage tax number, you are required to submit an application for each wage tax number separately. Please indicate the expected decrease in turnover for the entire company or the entire group; so you indicate the same decrease in turnover and the same measuring period in each application.  
  • It is very important to submit the application for these first three months as carefully as possible, as no corrections can be made after the application and abuse of the arrangement may lead to fines.  
  • If your company currently receives a Work and Care Act (WAZO) benefit (maternity benefit) and/or Sickness Act (ZW) benefit from the UWV, please report this to us. Such benefits are not part of your labour costs and the UWV will make corrections for such benefits later, in the final benefit determination.  
  • You are required to apply for determination of the benefit within 24 weeks after the period for which the NOW was granted. For applications exceeding a sum still to be determined, you will need an accountant's statement. This point of the arrangement may still be changed.

Application, advance, and grant of the benefit

If you wish to apply for the NOW measure, you need to take the following steps, aside from submitting information such as the company name and wage tax number:

  • You apply for a benefit for the wages of March, April, and May in relation with a decrease in turnover of more than 20%.
  • You can indicate your wish to have the three-month measuring period for turnover comparison start one or two months later (on the 1st of April or the 1st of May), if you expect that the effect of the present situation will be visible in the turnover figures later. You must choose the measuring period when submitting your application. The measuring period cannot be changed when the final settlement takes place. The total wages that the benefit is based on will be the total wages of March, April, and May 2020 even in these cases.
  • If you have more than one wage tax number, you are required to submit an application for each wage tax number separately. Please indicate the expected decrease in turnover for the entire company or the entire group; so you indicate the same decrease in turnover and the same measuring period in each application.
  • It is very important to submit the application for these first three months as carefully as possible, as no corrections can be made after the application and abuse of the arrangement may lead to fines.
  • If your company currently receives a Work and Care Act (WAZO) benefit (maternity benefit) and/or Sickness Act (ZW) benefit from the UWV, please report this to us. Such benefits are not part of your labour costs and the UWV will make corrections for such benefits later, in the final benefit determination.  
  • You are required to apply for determination of the benefit within 24 weeks after the period for which the NOW was granted. For applications exceeding a sum still to be determined, you will need an accountant's statement. This point of the arrangement may still be changed. 
  • A correction will be made in the final determination of the benefit in case of a decrease of the total wages (compared to the month of January 2020).   

The NOW in figures  

The amount of the contribution towards labour costs depends on the decrease in turnover, with a maximum of 90% of the total wages. If the decrease in turnover turns out to be smaller, the benefit will be reduced accordingly.  

  • If the turnover drops by 100%, the contribution will be 90% of an employer's total wages.
  • If the turnover drops by 50%, the contribution will be 45% of an employer's total wages.
  • If the turnover drops by 25%, the contribution will be 22.5% of an employer's total wages.

The advance will be calculated based on the total wages in the month of January 2020. The starting point is the social security wage from present employment. Additional employer contributions will be compensated for as well. For practical reasons, the UWV has opted for a fixed rise of 30% for employer contributions instead of calculating the exact employer contributions.  

What about flexiworkers, employees on a zero hours contract, and temporary workers?

  • The NOW also applies to employees whose wages you are not obliged to keep paying, such as flexiworkers and employees on an on-call contract / zero hours contract. If you apply for a NOW, you have to continue paying their wages.
  • Temporary employment agencies, as well as payroll companies, can also apply for a contribution towards the labour costs for temporary employees in their service. The same conditions that apply to other employers also apply to Payroll employers.
  • Hired workers (such as payroll and temporary workers) do not count for the total wages of the company where they work.
  • Employers, temporary employment agencies, and payroll employers have a so-called best-effort obligation to keep flexiworkers, on-call employees, and temporary workers employed during the months of March, April, and May, keeping the total wages as equal as possible, to be eligible for the benefit.
  • The total wages of January 2020 is decisive for the labour costs that the benefit is based on. An option is to continue paying on-call employees in the months of March, April, and May based on the hours worked in January 2020. This may lead to the applicability of the legal presumption of article 7:610b of the Dutch Civil Code. In other words, the employee may demand that you keep paying these wages in the future or may claim that the wages over January 2020 are not representative.
The above depends on the specific company. A collective agreement may force you to assign a minimum number of hours to on-call employees. This may affect the above.  
If you have any questions about the continued payment of wages to your on-call employees, please contact us using the contact details at the bottom of this page.   

If you pay less wages, the total wages over the months of March, April, and May will drop compared to the month of January, and the benefit will be smaller as the total wages are smaller. In some situations, this may lead to reclamation. 

Calculation example (in case of a 100% decrease in turnover):  The total wages on which the advance is based amounts to € 200,000. The expected sum of the benefit is € 200,000 x 90% = € 180,000. 80% thereof, € 144,000, will be paid out in advance.

If the total wages over the months of March, April, and May have dropped to € 110,000 because the employer did not continue paying the wages of employees with flexible working hours, this will be taken into account in the final determination of the benefit. The decrease in the total wages, multiplied by 90%, will be deducted from the sum of the benefit. As a result, the final sum of the benefit is € 180,000 – € 90,000 x 90% = € 99,000. That means a reclamation of € 45,000. 

If the total wages over the months of March, April, and May did not drop but stay steady at  € 200,000, the final determination of the benefit will start from 90% of the original total wages, being 90% of € 200,000 = € 180,000. In this situation, the final benefit is higher and a sum of € 36,000 will be paid out afterwards. 
 

Higher total wages in the months of March, April, and May will not lead to a greater sum of the benefit. If, for instance, the total wages increase as a result of hiring new employees after January 2020, this will not result in a greater sum of the benefit.

What about current arrangements for a reduction in working time?

If you have already been granted a reduction in working time, this permit will remain in force. If you use the permit for a reduction in working time and want to renew it upon expiration, you will have to use the new Temporary Emergency Bridging Measure for Sustained Employment (NOW).

If you submitted an online application for a Reduction in working time but have not received a reply yet, you will be informed about this later. Your application for the withdrawn arrangement for a reduction in working time will be regarded as an application for the new Temporary Emergency Bridging Measure for Sustained Employment (NOW). Our advice in this situation is to submit a complete, new application, stating the reference number of your application for a reduction in working time.  

International aspects

Under the NOW, you may receive a benefit as a contribution towards the labour costs for employees in your service. The starting point is that employees must receive social security wage. That means that you can only receive a benefit for employees who are covered by social security in the Netherlands. It also means that legal entities or natural persons domiciled abroad but employing employees who are covered by social security in the Netherlands, can also apply for the NOW. As a foreign employer, you are eligible for a benefit for employees who are covered by social security in the Netherlands.

Are you a director/large shareholder but do you not have to pay for employees' insurance?

Then, unfortunately, you are not eligible for a benefit under the Temporary Emergency Bridging Measure for Sustained Employment (NOW).
Read more about the alternatives here

Enforcement: abuse will be fined  

Good service is important for the NOW. At the same time, you will have to follow the rules strictly from the start. If requested, employers who use this measure must grant access to their administration until five years after determination of the benefit. If it becomes clear that you no longer meet the requirements for a grant of the benefit, you must report this immediately. If there is a reasonable suspicion of a criminal offence during the determination of the benefit, the UWV may report this. The Public Prosecutor may then start a criminal investigation and proceed to criminal prosecution.

If you want us to apply for the NOW arrangement for you,

We will gladly do so. Please fill in the Application for Temporary Emergency Bridging Measure for Sustained Employment form and send it to NOW@hlb-van-daal.nl, and we will process your application as soon as possible.

Do you have any questions?

Contact mr. R.A. (Reinier) Meesters, Tax Advisor immediately at HLB Van Daal in Gemert.

Send an email or call +31 (0)492 36 12 48
mr. R.A. (Reinier) Meesters