The Dutch government does not have a compensation for reduced working hours anymore. Instead, the government created a subsidy for companies experiencing a reduction of turnover of 20% or more due to the corona-crisis. This so-called NOW subsidy, at a maximum, will cover 90% of the wage costs for a duration of 3 months, during March, April and May 2020. The measure may be extended by the Dutch government for another 3 months.
For HR purposes, it is useful to realize that the NOW subsidy is not related to the actual working hours. Under the NOW, the intention is that the employer keeps its employees and remains to pay them in full. Mostly, employees are still working –depending on impact of health measures – either fulltime or part-time, remotely or on site, fully in their original job or having been assigned alternative tasks.
How the NOW works in 10 (oops 12) bullets:
- You assess the reduction of the company turnover over a period of the months March/April/May 2020 compared to the total turnover of 2019 divided by 4 (the average 3 month period in 2019).
- Alternatively: You may also compare an assessment of loss of turnover over April/May/June OR May/June/July in 2020 to the average 3 month period of 2019 as above.
- For companies that are part of a group, turnover reduction must in principle be measured collectively for all group companies with Dutch social security wages.
- Your subsidy will initially be based on the social security wage sum of January 2020 plus a markup of 30% for costs other than base salary for 3 months. Salaries taken into account are capped at EUR 9,538 gross per month per person.
- For some companies the wage sum of March 2020 instead of January 2020 can be used, such may be advantageous for companies with seasonal fluctuations.
Your subsidy will be:
- In case of a reduction of 100% turnover 90% of the wage sum (plus 30%) over the 3 months of March/April/May 2020
- In case of a reduction of 50% turnover 45%
- In case of a reduction of 25% turnover 5%
- Your subsidy must be used in order to keep paying salaries
- You must inform your Works Council (or staff representative body) of your NOW application
- You apply for the NOW subsidy at the state authority UWV: https://www.uwv.nl/werkgevers/overige-onderwerpen/now/detail/now-aanvragen
- You will receive a 80% advance of the estimated subsidy based on the assessed reduction of turnover and wage sum of January. The first of three payments will be made within 2-4 weeks of the application
There will be final assessment based on:
- the actual reduction of turnover over the 3 month period in 2020 of your choice (see above) compared to the average 3 month turnover of 2019;
- the actual wage sum over the period of the subsidy. A reduction in personnel will case a reduction of the final subsidy
- If you not renew contracts or let people go compared to the wage sum of January this will have a negative effect on your subsidy. If you apply for a permit to give notice for economic reasons a further penalty (50%) will be due.
The above outlines the basics. Further conditions relate mainly to prevention of misuse and fraud. You will be required to hold up-to-date records of administration available, inform the UWV of any relevant developments and present an auditor’s report to demonstrate the actual loss of turnover for the final assessment to be made.
The NOW measure is meant for all employers, including foreign companies, with Dutch social security wages and covers potentially, all employees, including flex workers. A foreign employer does require a Dutch bank account.
The deadline to file a request is 5 June 2020.
Other Dutch measures to assist companies in times of the COVID-19 crisis include many types of tax postponements and loans against favourable terms. Specific measures are currently in place for independent contractors, start-ups and scale-ups, specific types of the agricultural sector, the cultural sector.