Finally, our Dutch Minister Koolmees announced on the 20th of May 2020 that the NOW regulation (emergency bridging measure to preserve employment, subsidy of wage costs Dutch employees) will be extended by another 3 months, starting in June, July or August 2020. From the 6th of July 2020, companies with at least a 20% drop in turnover will be able to apply for a compensation in their wage costs regarding this 3 month period. Compared to the current regulation (the NOW 1.0), the NOW 2.0 has been changed on a few important points:
- Dismissal penalty: Instead of the dismissal penalty of 150% of the salary (like in the NOW 1.0 regulation), there will only be a correction of 100%. This means that the employer will not receive a subsidy for the salary of June, July and August 2020 of the employee(s) for which dismissal has been requested in that period. Companies that suffer financially from the corona crisis must get the opportunity to reorganize as early as the second NOW period, according to Minister Koolmees. If the employer wants to dismiss more than 20 people within a region, there must also be mandatory consultation with the trade unions.
- Reference month of the wage costs: Instead of January 2020, March 2020 is, with the NOW 2.0 taken as the reference month for wage costs. This is more favorable for a lot of sectors, especially in the hospitality trade, because the winter months are traditionally calmer and wage costs in January 2020 are usually lower than in March 2020. Even if you still have hired people after January 2020, the higher wage sum of March 2020 will therefore be taken into account for the subsidy. In the current NOW application the month of March 2020 will also be taken as the starting point if the average wage bill in the months March to May is higher than January 2020. It is therefore possible that you will still receive more subsidy than expected.
- Higher employer costs factor: The fixed percentage of the employer’s costs will be increased from 30% to 40% for the NOW 2.0. The formula for calculating the NOW subsidy is as of NOW 2.0 as follows: (percentage of decrease in turnover) X (total wage costs) X 3 (months) X 40% (the fixed factor of employer costs) X 90%.
- Ban on dividend, bonuses and repurchase of own shares: Companies using the NOW 2.0 will not be allowed to pay dividends to shareholders or hand out bonuses to the board of directors and management in 2020. In addition, the repurchase of own shares in 2020 will also be banned.
- Retraining obligation: Employers who apply for a NOW 2.0 might be obliged to encourage their employees to undergo further training and retraining to ensure future employability. The governmental ‘NL leert door’ programme (financially) supports this initiative
Tegemoetkoming Vaste Lasten MKB (compensation utilities for SME)
SME entrepreneurs in the hospitality industry, recreation, events, fairs, stages and theatres, among others, receive – in addition to the NOW – a tax-free compensation in order to pay their utilities, like rent, gas, water, electricity etc. This is done via the new regulation ‘Tegemoetkoming Vaste Lasten MKB’. Applying for this compensation is possible in the event of a fall in turnover of at least 30% and can amount to a maximum of € 20,000 depending on the size of the company and the amount of the costs.
Other important announcements
In addition to the previous news, Koolmees dis a few other important announcements. The application period for the NOW 1.0 is extended. Application is possible until the 5th of June 2020. It is also important to note that a subsidy application for NOW 1.0 is not an automatic application for NOW 2.0, this will have to be applied for separately. Subsequently it has also become known that for both NOW 1.0 and NOW 2.0 an auditor’s report is required for the final compensation determination if the advance payments exceeds € 100,000 or if the total amount of the compensation exceeds €125,000. The final determination of the compensation can only be made as from 7 September 2020. The exact nature of the auditor’s report will be announced before 1 August 2020. Another revision of the NOW is made regarding the incidental payments of the employers in January. Employers who paid their employee(s) a thirteenth month in January will not suffer any disadvantage when the final determination of the wage subsidy is made. The UWV does not take these kinds of payment into account. Last but not Least, Koolmees announced that the subsidies coming from the government will count as turnover in the calculation of the amount of the NOW subsidy. This might (if your company applies for more than one kind of government compensation) result in a lower subsidy than expected.
NOW advice or application.
During the NOW 1.0 period we were able to assist a lot of companies with their NOW subsidy application as well as with advice on dismissal possibilities. Also now we can support you swiftly and professionally in order to achieve the best result for your company. Through our NOW webpage you can immediately schedule an Internet video consultation with us if you would like to discuss for example whether a new NOW application is the best choice or whether you can meet the new conditions. Of course, you can also let us take care of the NOW application in full if you are sure you can meet all the conditions. You may also be considering other measures such as a reorganization or lowering the collective salary costs. We also have a great deal of experience with this and will be happy to advise you.
If you have any questions, my team and I are ready to support you! You can reach us at the office by phone +31203450152 or by mail email@example.com We are also available on Teams, Zoom or Skype.