Under the extended NOW scheme (NOW 2.0) a number of changes have been made. One example is the removal of the redundancy penalty. In addition, conditions apply to dividend payments and bonuses, and seasonal businesses are being offered a helping hand.

Companies that have suffered a drop in turnover can obtain a contribution towards their payroll costs. This NOW scheme reimburses up to 90% of the payroll costs of companies whose turnover drops by at least 20%. The maximum compensation of 90% applies if a company loses all of its turnover. If the drop in turnover is smaller, the compensation is reduced proportionately. This means that if a company sees its turnover fall by 50%, it can receive compensation for 45% of its payroll costs.

The drop in turnover is determined over a three-month period, for which the company can choose 1 June, 1 July or 1 August as the starting date. In the case of applicants who are taking advantage of the NOW scheme for a second time, the turnover period must fit in with the timeframe chosen for the first scheme period.

Under NOW 2.0 the level of the wage bill is derived from the wage bill for March. Any subsidies that entrepreneurs receive within the context of the coronavirus crisis are counted as turnover for the purposes of both NOW 1.0 and NOW 2.0. As a result, entrepreneurs who also receive a contribution on the basis of the TOGS scheme receive a lower contribution via the NOW scheme.

The government hopes that the extended contribution towards payroll costs for June, July and August will be open for applications from 6 July. It is now possible to apply for the payroll costs subsidy under NOW 1.0 until 5 June (previously 31 May).

Please note:
The fixed (flat-rate) mark-up is being increased from 30% to 40%. In this way the NOW scheme will also contribute towards costs other than payroll costs.

Seasonal businesses
An adjustment has been made to NOW 1.0 with a view to supporting seasonal businesses that increased their workforce between January and March. The wage bill for March will now be taken as the frame of reference instead of the unrepresentative wage bill for January.

If the wage bill from March to May is more than three times the wage bill for January, the wage bill from March to May is taken as the basis for calculating the final subsidy. The wage bills for April and May will then be capped at the level of the wage bill for March, with 15 May as the reference date. This new calculation method will automatically apply to all employers who have a higher average wage bill over the period from March to May compared with January (including capping).

Additional conditions for bonuses
A company that takes advantage of the NOW scheme this year may not distribute any dividends to shareholders, pay any bonuses to its board and/or management or buy back any of its own shares. The condition that no transactions of this nature may be effected in 2020 will apply up to the shareholders’ meeting in 2021 when the financial statements are adopted. Dividends, bonuses and shares for 2019 are not subject to this condition. ‘Bonuses’ is also understood to cover profit-sharing and other forms of bonus payment. This ban only applies to companies that are receiving a contribution for which a declaration from an accountant is required. The situations in which such a declaration is required will be announced later.

Redundancy penalty removed
Under NOW 2.0 the redundancy penalty imposed on an employer who makes employees redundant for commercial reasons while receiving the NOW subsidy is being removed. This applies to redundancy applications submitted to the Employee Insurance Agency (UWV) between 1 June and 31 August 2020.

If companies wish to apply to make more than 20 people redundant for commercial reasons, they must consult with trade unions on the proposed redundancy for a period of four weeks. This is required under the Collective Redundancy (Notification) Act. The statutory protection in the event of redundancy remains in force, which means the employer is still obliged to make a transition payment.

Further training and retraining mandatory
Employers who apply under NOW 2.0 will be subject to a best-efforts obligation to encourage their employees to participate in further training and retraining. The aim is to limit the number of compulsory redundancies as a result of the coronavirus crisis as much as possible. To this end, the government is making a € 50 million training package available under the name ‘NL leert door’ (‘The Netherlands keeps learning’). This package, the further details of which are yet to be worked out, will include development advice and online training specifically geared towards career steps that are relevant to the needs of the labour market.