Scope

• NOW has been established by the Dutch government to support employers confronted with an acute and significant decrease in revenue (i.e. more than 20%).
• 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 is to enable employers to retain employees and make them jointly responsible, together with the government, for preserving employment in the Netherlands.
• Financial assistance is available for all employers. Employers that have submitted an application for a reduction in working hours (werktijdverkorting) which was not granted prior to the introduction of NOW are automatically deemed to have applied for financial assistance from NOW.

Eligibility criteria

• The employer must expect a decrease in revenue of at least 20% over three consecutive calendar months in the period from 1 March 2020 to 31 July 2020 (i.e. a three-month period starting on 1 March 2020, 1 April 2020 or 1 May 2020).
• It must be 'sufficiently plausible' that the decrease in revenue will be at least 20%. A causal link be-tween the decrease in revenue and the Covid-19 outbreak is presumed and need not be demonstrated.
• The application must meet the criteria set by the government (e.g. the employer's account number must match its payroll tax number, wage information must be available in the benefits entitlement database of the Employee Insurance Agency, etc.). 
• The employer must undertake not to dismiss employees (i.e. through the submission to the Employee Insurance Agency of an application for a dismissal authorisation based on economic reasons) from 18 March 2020 until the end of the period for which the financial assistance is granted. If, contrary to this commitment, an employee is dismissed, the portion of financial assistance corresponding to the dismissed employee's wage cost must be paid back, together with a penalty of 50% of this amount.
• If an employer has multiple payroll tax numbers, a separate application must be submitted for each number. The decrease in revenue and the period covered by the financial assistance be must the same on each application.

Administrative obligations 

• The funds received must be used solely for the payment of wages.
• The employer has a best-efforts obligation to keep the wage cost at the same level and to continue to pay the employees their salaries, including employees with a flexible or on-call employment con-tract. A downwards adjustment in the wage cost will lead to a downwards adjustment in the financial assistance.
• 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 expiry of the period for which the financial assistance is granted, the employer must provide a final statement of the decrease in revenue, supported by an audit opinion (a threshold below which no audit opinion shall be required has yet to be established) and 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.

On 22 April 2020, the government announced that it will amend NOW with respect to applications by group companies. If the decrease in revenue is less than 20% at group level but 20% or more at the level of an individual operating company, the operating company can apply for NOW. However, several conditions must be met, including a prohibition on the group paying bonuses or dividends for 2020 or repurchasing its own shares. The amended rules are expected to take effect the last week of April 2020.   

Calculation of the financial assistance

The amount of financial assistance is calculated on the basis of the formula A x B x 3 x 1.3 x 0.9 where

• A is the percentage decrease in revenue as set out above.
• B is the total wage cost for employees whose wages the employer paid in January 2020 (or November 2019), capped at EUR 9,538 per employee. In certain situations, a given amount must be deducted from the total wage cost (e.g. if the employer has applied for a dismissal authorisation).
• 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 1.3 is a fixed multiplier, to factor in the employer's additional costs (e.g. holiday allowance, pension and employer's social security contributions, etc.).
• the number 0.9 reflects that 90% of the wage cost – in proportion to the percentage decrease in revenue – is covered by the government. 

Application procedure

The application must be submitted online, using the form posted on the Employee Insurance Agency's website (www.uwv.nl). The regulations state that applications can be submitted from 6 April 2020 until 31 May 2020. The aim is to ensure that the application procedure can start on 6 April 2020. 

Applications are submitted per payroll tax number and must detail inter alia:

whether the employer submitted an application for a reduction in working hours (werktijdverkorting) after 31 August 2019, in which case the employer will be given four weeks to provide the additional information required; 

• the expected percentage decrease in revenue;
• the consecutive three-month period, in the period from 1 March 2020 until 31 July 2020, 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 Employee Insurance Agency 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 published on the Employee Insurance Agency's website (www.uwv.nl). 

When submitting an application, the employer must provide inter alia:

• a final statement of the decrease in revenue, supported by substantiating documentation and information;
• an audit opinion (a threshold has yet to be established below which no audit opinion will be required); and 
• a statement by the employer confirming compliance with the obligations mentioned in the government regulations.

The final amount of financial assistance will be determined within 22 weeks from receipt of the application. 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 (which could be the case if wage costs are lower(ed) as a result of employee turnover);
• 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. 

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