To ease the financial impact of COVID-19, wage subsidies for employers in the Netherlands are set to begin through a new program called NOW. Employers expecting a turnover loss of at least 20% can claim compensation towards wages for a period of 3 months. Also, employers can claim a maximum of 90% of wages, depending on how much revenue they lose. Compensation is based on turnover missed from March 1, 2020 forward. April 6, 2020 is the date applications for the NOW subsidy program can be submitted.
What is NOW?
Due to extraordinary circumstances like the coronavirus, employers now have less or no work for their employees to perform. Employers can claim NOW for a substantial compensation for their wages. In this way, employers can continue to pay employees with permanent and temporary contracts. The Employee Insurance Agency (UWV) will pay employers an advance. Employers can claim the compensation for 3 months, with the possibility to extend it for a further 3 months. Employers can claim the compensation for revenue they missed from March 1, 2020 onwards.
Other costs for employees in addition to wages are also compensated with NOW. This applies to costs such as pension premiums (for employees and employers), employee insurance premiums and the accrual of holiday allowance. Only the accrual of holiday allowance of March, April and May is compensated. UWV applies the same surcharge of 30% on top of the wages for all employers.
Employers may also use NOW if the company experiences revenue loss due to other causes than the coronavirus outbreak.
Conditions to claim the need for NOW
If employers use NOW, they will not be allowed to request permission to dismiss employees on economic grounds during the period for which they receive compensation. Employers can enact NOW if they:
- Expect to lose at least 20% of their revenue.
- Claim compensation for 3 months, with the possibility to extend it once, for a further 3 months (extra conditions may apply to an extension application).
How much compensation for wages can employers claim?
This depends on revenue loss. Employers can claim a maximum of 90% of wages. For example:
- If the revenue loss is 100%, the compensation will amount to 90% of wages.
- If the revenue loss is 50%, the compensation will amount to 45% of wages.
- If the revenue loss is 25%, the compensation will amount to 22.5% of wages.
Note: Submitting a statement from an accountant for claims that exceed a certain amount (the height of which is yet to be established) is required.
Based on the application, the UWV will pay employers an advance of 80% of the expected compensation. The actual revenue loss will be determined afterwards. When determining the definitive compensation, a correction can be made, if there has been a decrease in wages. If employers meet NOW’s requirements they will get an advance payment within 2 to 4 weeks after their application.
How do employers apply?
The application website is slated to go live April 6, 2020. Asinta will update this article with the site address as soon as it is made available.
Read more about NOW’s wage subsidies for employers in the Netherlands.
This article is one of a series dedicated to helping global workforce managers navigate the evolving challenges brought on by COVID-19. Asinta’s Netherlands Partner, Schouten Zekerheid, provided this update.