Q&A regulations NOW subsidy1-4-2020
During the Coronavirus outbreak, the Dutch government offers a temporary subsidy for wage costs to companies expecting a loss in turnover of at least 20%. Applications for this subsidy can be made via an online form (Dutch only) on the Dutch labor office’s website (UWV) from 6 April 2020 onwards.
Below are our answers to some frequently asked questions:
Which companies can be eligible?
All employers expecting a loss in turnover of 20% or more for a duration of at least 3 consecutive months between 1 March 2020 and 1 August 2020. Extraordinary circumstances, such as the consequences of the Coronavirus outbreak, must have caused this loss in turnover.
How is this loss in turnover calculated?
- First, the expected turnover in March-April-May 2020 must be determined. If the decline in business is not visible yet in March or April 2020, calculations can be made based on 3 consecutive months calculated starting from 1 April or 1 May 2020.
- The total turnover in the chosen 3 months (for example March-April-May 2020) must then be set off against the total turnover in 2019 divided by 4: the ‘reference turnover’.
- Subsequently, the difference between these 2 sums must be divided by the reference turnover.
- The result of this sum multiplied by 100 is the percentage of expected loss in turnover. This percentage must be rounded off upwards.
Group or company turnover?
The subsidy is based on the loss in turnover of the group of companies the employer is part of. The turnover of foreign group companies is only taken into consideration if these foreign companies pay wages in the Netherlands. Employers must apply for the NOW-subsidy individually (not as a group).
How is the subsidy calculated?
The subsidy is based on the employer’s wage sum. January 2020 will be used as reference month. It concerns the so-called “social securities’ wage” (“SV-loon”), which is mentioned on salary slips, plus 30% as compensation for extra costs such as pension premiums and holiday allowance. The maximum monthly wage per employee is € 9,538 gross.
How much will be compensated?
Maximum 90% of the employer’s wage sum. In case there is a loss in turnover of less than 100%, the amount of subsidy is amended proportionally: 45% subsidy in case of 50% loss in turnover, 22,5% subsidy in case of 25% loss in turnover etc.
Must wage payments be continued?
Yes; if NOW is being applied, payment of 100% of the employees’ salary must in principle be continued. This may be different if an employee is off work sick. The aim of the subsidy is to alleviate the employer’s wage sum and may therefore only be used for this purpose. The part of the wage sum not covered by the subsidy must be borne by the employer.
Must the works council be involved?
If the employer’s request for subsidy has been approved, the works council or employee representative body must be informed. If there is no employee representation, the employees must be informed directly.
Will dismissals still be possible under NOW?
While an employer is benefitting from NOW, he may not dismiss employees for business economic reasons via the Dutch labor office procedure (the ‘UWV’ procedure). This may not be done from 18 March until 1 June 2020. Should employers do this anyway, the wage sum of the dismissed employees plus 50% will be deducted from the definite subsidy as a penalty. Dismissals for other reasons, such as poor performance, remain allowed.
When will the subsidy be paid?
Within 2-4 weeks after the application has been approved, an advance payment of 80% of the requested subsidy will be made. The advance payment will be made in maximum 3 terms. The final subsidy is calculated afterwards based on the actual loss in turnover. Consequently, retrospective payments or reclamations can occur. Determination of the final subsidy must be requested within 24 weeks after the subsidy period has ended.
Which information must be provided with the first application?
- The percentage, rounded off upwards, of expected loss in turnover (minimum 20%) over 3 consecutive months between 1 March – 1 August 2020;
- The employer’s wage number (‘loonheffingennummer’) and the bank account number on which payments from the Dutch tax authorities (‘Belastingdienst’) relating to wage withholding taxes are being received;
- If an application for short-time working (‘werktijdverkorting’) has been made on or after 1 September 2020: this application’s file number.
Which information must be provided with the second application?
- Finalized and substantiated information on the loss in turnover in the period of 3 months for which subsidy has been requested;
- An auditor’s report;
- A statement that the employer has complied with all obligations necessary for the grant of subsidy.
For how long does this emergency measure apply?
Initially for 3 months with the option to apply for an extension of another 3 months. In case of extension, additional terms may be added. Before 1 June 2020, it will be decided if and which additional terms will be added.