The Emergency Bridge Fund for Employment [Noodmaatregel Overbrugging Werkgelegenheid] (“NOW”) provides financial assistance to cover part of the wage costs of companies facing a significant drop in revenue. After the first version (“NOW 1.0”), which covered March/May 2020, and the second version (‘‘NOW 2.0’’), which covered June/September 2020, there is now a third version for October 2020 to June 2021 (‘‘NOW 3.0’’).
- NOW has been extended again in order to continue to support employers facing an acute and significant drop in revenue (i.e. initially more than 20% and from January 2021 more than 30%).
- Support takes the form of partial coverage of the employer’s wage costs and is proportionate to the decrease in revenue.
- The goal of NOW 3.0 is to enable employers to retain employees and make them co responsible for preserving employment in the Netherlands, but at the same time to encourage employers and employees to adapt to the new reality.
- Financial assistance is available for all employers, both those applying for NOW for the first time and those that submitted an application for NOW 1.0 and/or NOW 2.0.
- Unlike NOW 1.0 and NOW 2.0, NOW 3.0 consists of three financial assistance blocks, each of three months. The application periods and conditions vary per period.
- The system for NOW 3.0 remains more or less the same. The employer must expect a decrease in revenue of at least 20% during the first period, or of at least 30% during the second and third periods.
- An application for assistance for the first period of NOW 3.0 can be submitted from 16 November to 13 December 2020, with retroactive effect from 1 October 2020.
- NOW 3.0 therefore involves three periods, for each of which the loss of revenue must be determined over an uninterrupted period of three months out of a period of five months:
- first period: three calendar months in the period from 1 October 2020 to 28 February 2021;
- second period: three calendar months in the period from 1 January 2021 to 31 May 2021; and
- third period: three calendar months in the period from 1 April 2021 to 31 August 2021.
- For employers reapplying for NOW, the revenue period under NOW 3.0 must link up with the revenue period selected in NOW 2.0. The revenue periods in the component periods of NOW 3.0 must also link up with one another.
- It must be “sufficiently plausible” that the decrease in revenue will be at least 20% or 30%, respectively. A causal link between the decrease in revenue and the COVID 19 outbreak is presumed and need not be demonstrated.
- The application must meet the criteria laid down in the NOW 3.0 scheme. This means, for example, that the employer’s account number must match its payroll tax number, an employer with multiple payroll tax numbers, must submit a separate application for each number, and wage information must be available in the benefits entitlement database of the Employee Insurance Agency (UWV), etc.
- The applicable fine if an employer dismisses employees (i.e. submits an application to the UWV for a dismissal authorisation based on economic reasons) was already waived under NOW 2.0. In the context of NOW 3.0, however, the wage bill is also no longer corrected for any dismissal applications within the financial assistance periods.
- The funds received must be used solely for the purpose for which they were provided, i.e. the payment of wages.
- The employer has a best-efforts obligation to encourage employees to receive development advice or undertake training.
- The employer has a best-efforts obligation to assist employees to find other work if their employment contract is terminating. For example, the UWV must be contacted for support for employees in finding other work.
- NOW 3.0 offers employers the scope for reducing the wage bill by a certain percentage: 10% during the first period; 15% during the second period, and 20% during the third period.
- Regarding the first period (in 2020), employers undertake not to pay out bonuses (from profits or otherwise) for the year 2020 to management and directors; not to pay dividends; and not to repurchase own shares up to and including the annual meeting in 2021. For the second and third periods, this obligation applies for the year 2021.
- This dividend limitation only applies to companies receiving an advance payment of at least EUR 100,000 or financial assistance of at least EUR 125,000.
- The employer is obliged to inform the works council or employee representative body or, in the absence thereof, the employees themselves of the fact that financial assistance has been granted. Prior consultation is not required.
- Payroll tax returns must continue to be filed at the times indicated by law.
- The employer must immediately notify the authorities if it becomes clear that the eligibility criteria are no longer met. The employer must maintain auditable records from which all information relevant for the grant of the financial assistance can be verified.
- For a period of five years after the receipt of financial assistance, the employer must provide the authorities with access to its administrative and accounting records.
- Within 24 weeks after 1 September 2021 (or 38 weeks if an audit opinion is submitted), the employer must provide a final statement of the decrease in revenue, supported by a statement confirming compliance with the obligations imposed by the government.
Calculation of the decrease in revenue
The decrease in revenue is established by dividing the difference between the reference revenue and the projected revenue over the period for which financial assistance is requested by the reference revenue. The result is expressed as a percentage, rounded up to the nearest whole number.
- The reference revenue is equal to the revenue generated in calendar year 2019, divided by four (an alternative calculation method is available for employers that were not active for the entire calendar year).
- Revenue is established per legal entity, unless the entity forms part of a group, in which case the decrease in revenue for the group is decisive.
- Subsidies and other funds from public sources are treated as revenue.
If the decrease in revenue is less than 20% at group level but 20% (or 30%, respectively) at the level of an individual operating company, the operating company can apply for NOW. However, several conditions must then be met, including a prohibition on the group paying bonuses or dividends or repurchasing its own shares.
Calculation of the financial assistance
The amount of financial assistance is calculated on the basis of the formula A × B × 3 × 1.4 × [0.8 ÷ 0.7 ÷ 0.6] where:
- A is the percentage decrease in revenue as set out above;
- under NOW 3.0, B is the total wage cost for employees whose wages the employer paid in June 2020, capped at EUR 9,538 per employee in the first and second periods and at EUR 4,845 per employee in the third period. In certain situations, corrections will be made to the total wage cost;
- the number 3 reflects that the compensation is granted for 3 months, whereas the factor B is based on a one-month period;
- the number 1.4 is a fixed multiplier, to factor in the employer’s additional costs (for example holiday allowance, pension, and employer’s social security contributions, etc.);
- the numbers between square brackets reflect that in the first period 80%, in the second 70%, and in the third 60% of the wage cost – in proportion to the percentage decrease in revenue – is covered by the government.
The application must be submitted online, using the form posted on the UWV website (www.uwv.nl).
Applications are to be submitted per payroll tax number and must detail inter alia:
- the expected percentage decrease in revenue;
- the consecutive three-month period within the assistance periods in which the decrease is expected;
- the employer’s payroll tax number;
- the account number to which the employer receives payments from the Dutch tax authorities in relation to payroll tax.
The UWV will take a decision within 13 weeks from receipt of a complete application. The employer will receive an advance payment of 80% of the financial assistance, paid in three instalments.
In practice, the aim is to pay the first instalment of the advance within 2 to 4 weeks from receipt of a complete application.
Ex post assessment
Within 24 weeks from expiry of the period for which the financial assistance is granted, the employer must apply for a final determination of the financial assistance. This application must also be submitted online, using the form to be posted on the UWV website (www.uwv.nl).
When submitting this application, the employer must provide inter alia:
- a final statement of the decrease in revenue, supported by substantiating documentation and information;
- a statement by the employer confirming compliance with the obligations mentioned in the government regulations.
The advance payment of 80% will be set off against the final amount.
Financial assistance can be revoked or recovered, in whole or in part, if it is established that:
- financial assistance should not have been granted;
- the level of financial assistance granted was too high;
- the requirements set out in the government regulations were not complied with; or
- the employer – during or after the period covered by the financial assistance – is deemed, due to acts or omissions on its part, not to have complied with the purpose of NOW.