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Covid-19 and Dutch employment measures

The Covid-19 pandemic has had a significant impact on many aspects of society, including the economy. With the aim of maintaining employment in the current economic climate, the Dutch government issued the Temporary Emergency Bridging Measure for Sustained Employment (Tijdelijke Noodmaatregel Overbrugging voor Werkbehoud NOW) on 31 March 2020. The NOW replaced the unemployment benefit during short-time working (wtv).

Companies qualify for compensation under the NOW if they employ staff and expect a turnover loss of at least 20% for a period of three consecutive months. Companies can claim a maximum of 90% wages, depending on the loss of turnover. The loss of turnover is calculated by making a comparison to the turnover in 2019. When companies are part of a group, the NOW compensation will be determined on the basis of the expected loss of turnover of the group instead of the operating companies. The NOW is meant to compensate turnover loss starting 1 March 2020. Companies can claim NOW compensation from 6 April 2020 to 5 June 2020. The Employee Insurance Agency (UWV) will execute the scheme. Companies will first receive an advance on the NOW compensation, the final compensation will be calculated on a later date and may lead to a subsequent payment or a claim to pay back some of the compensation paid by advance.  

For the period that companies are granted the NOW compensation, they have to:

  • Pay their employees in full;
  • Use NOW compensation to pay wage costs;
  • The company cannot request permission from UWV to dismiss employees on economic grounds during the period for which NOW compensation is received. If the company does so anyway, it will have to pay back 150% of the NOW compensation received per employee;
  • Inform the works council or employees if the NOW compensation has been granted;
  • Keep verifiable records of all information of relevance to the NOW compensation for five years;
  • Notify UWV of any development that may affect the compensation and lead to a decision to change, repeal or determine the NOW compensation;
  • If the company received wage subsidy, it needs to notify the municipality when the NOW compensation has been granted;
  • When the NOW claim exceeds € 125.000 or advances exceed € 100.000,-, the company needs to submit a statement from an accountant.

Of interest is that UWV will publish names, allocated advances and the determined compensation on their website from the end of June.

Recently the government has announced an extension of the NOW as well as some material changes (NOW 2.0). The NOW will be in force until the end of September 2020. Companies can most likely claim NOW 2.0 compensation from 6 July 2020. The most important substantive changes are:

  • A company that receives NOW 2.0 compensation and dismisses employees on the basis of economic grounds will have to pay back 100% of the compensation per employee instead of the 150% under the NOW;
  • If the company wants to dismiss 20 or more employees on the basis of economic grounds it will need to reach an agreement with the relevant unions/staff representation and have applied for mediation if an agreement cannot be reached;
  • The company is not allowed to pay out bonuses or dividend or buy (back) its own shares;
  • The NOW 2.0 compensation is not calculated on the basis of the turnover loss of the company group. Company groups can claim NOW 2.0 compensation for operating companies that suffer a turnover loss of 20% or more under the following conditions:
    • The company group cannot pay out bonuses or divided over 2020 or buy its own shares;
    • The operating companies that receive the NOW 2.0 compensation must make arrangements on maintaining employment with trade unions or employee representation;
    • The operating company must be a legal entity in its own right and an intra-group secondment operating company (personeels-bv) within the group cannot apply.