{"id":30533,"date":"2020-04-10T14:32:07","date_gmt":"2020-04-10T14:32:07","guid":{"rendered":"https:\/\/thelegalcompany.nl\/?p=30533"},"modified":"2026-09-02T17:36:48","modified_gmt":"2026-09-02T17:36:48","slug":"now-and-continued-wage-payment-how-does-it-actually-work","status":"publish","type":"post","link":"https:\/\/thelegalcompany.nl\/en\/now-and-continued-wage-payment-how-does-it-actually-work\/","title":{"rendered":"NOW and continued wage payment, how does it actually work?"},"content":{"rendered":"\n

There is currently a great deal of confusion about the award of the subsidy under the Temporary <\/strong>Emergency Bridging Measure for Sustained Employment (NOW)<\/a><\/span> and topics such as continued wage payment, flexible workers and dismissal options. In this first blog of a two-part series, we look at continued wage payment for both permanent and flexible employees in relation to the NOW subsidy. In the second blog, we look at dismissal and the NOW subsidy. <\/strong><\/span><\/p>\n

100% obligation to continue paying wages?
<\/strong><\/span>A first point of confusion is the employer’s obligation to continue paying wages if it claims the NOW subsidy. The letter to Parliament of 17 March 2020 clearly stated as a condition that the employer had to continue paying 100% of employees’ wages, both for employees with a fixed number of hours and for flexible workers.<\/span><\/p>\n

Only an effort obligation to keep the wage bill level.
<\/strong><\/span>Yet, in the NOW scheme as published on 31 March 2020, the government no longer imposed a hard obligation of 100% continued wage payment for employers to be eligible for the NOW subsidy. In the final NOW scheme, only an “effort obligation” has been included for employers to keep the wage bill as level as possible, in two ways: <\/span>

1) by continuing to pay employees’ wages; and<\/span><\/p>\n

2) by preserving employment<\/span><\/p>\n

In this first blog we focus mainly on the continued wage payment obligation and the NOW. In our second NOW blog, we look at the relationship between dismissal and the NOW subsidy; you can find the link to that second blog here<\/a><\/span>.<\/span><\/p>\n

What does “continuing to pay employees’ wages” mean exactly?
<\/strong><\/span>This is based on the wage bill of January 2020. If the wage bill in March, February and April 2020 turns out to be lower than the wage bill of January 2020 after all, this in principle only affects the amount of the subsidy, and any advances paid too generously may need to be repaid. Unfortunately, no account is taken here of individual situations, for example if employees left after January 2020 and the wage bill is therefore lower as a result.<\/span><\/p>\n

And suppose the wage bill is actually higher in the NOW period compared to the wage bill in January 2020, then no extra subsidy is given! The final compensation can never be higher than 3 times the wage bill of January 2020. If you had a relatively low wage bill in January 2020, then you are out of luck. No correction mechanisms have been built in for this (as yet).<\/span><\/p>\n

Contractual continued-wage-payment obligation for permanent employees.
<\/strong><\/span>Besides the aforementioned effort obligation towards the UWV to keep the wage bill level, there is the wage payment obligation under the employment contract towards the employee. This continued-wage-payment obligation also exists even if there is a downturn in work or revenue as a result of the corona pandemic. How do these two obligations relate to each other? A downturn in work or loss of revenue are and remain business risks that are for the account and risk of the employer, meaning that, in accordance with applicable employment legislation, the employer must continue to pay employees (with a fixed number of hours) with a fixed monthly (or 4-weekly) salary 100% of their wages. The employer is legally and contractually obliged to continue paying the salary for these fixed hours for as long as the employment contract exists, regardless of whether or not there is work available due to the corona crisis.<\/span><\/p>\n

Agreeing on or unilaterally implementing a wage reduction, and the NOW?
<\/strong><\/span>In addition, it is the case that, under certain circumstances, an employer could still implement a unilateral wage reduction based on a contractually agreed right to amend, for compelling business reasons (such as the business grinding to a halt due to corona). Always try to reach agreement with the staff concerned first, but if that is not successful, an employer can, under the given circumstances of the case, justifiably make use of this right.<\/span><\/p>\n

Suppose an employer takes this measure now to keep costs manageable for the rest of this year, including during the period for which NOW subsidy is received. Is that possible? The NOW scheme does not, in itself, prohibit this, but given the effort obligation, it is of course better to keep the wage bill as level as possible. If this does not happen, for example because everyone gives something up, this will in any case lead to a lower subsidy being determined and a repayment of part of the advance already received. Even so, reducing wage costs can still be advantageous, with the help of proper calculation and the right timing. Employers can also choose to do this only after the subsidy period, if it turns out that, for example, the decline in revenue also persists after the chosen revenue reference period.<\/span><\/p>\n

Continued wage payment for flexible workers.
<\/strong><\/span>For flexible workers, the continued-wage-payment obligation and the NOW effort obligation are somewhat more complicated. Flexible workers normally only have a statutory right to continued wage payment for:<\/span><\/p>\n