NOW Alert: second tranche NOW published | Deloitte Nederland

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NOW Alert: second tranche NOW published

On 22 June 2020, Minister Koolmees presented the Scheme for the second tranche of the NOW to the House of Representatives. Subsequently, the final version of the second tranche of the NOW was published in the Netherlands Government Gazette on 25 June 2020. Various changes were made to the second tranche of the NOW compared to the first tranche. This alert informs you about the major issues to focus on in the Scheme and about changes compared to the first tranche.

2 July 2020

NOW 2.0: Outlines second tranche (June, July, August, September 2020)

  • Opening of the second application period: the application period will open on 6 July 2020. It will be open for subsidy applications until 31 August 2020.

  • Advance payment: unlike the first tranche, the advance payment will be made in two instalments.

  • Wage bill: the reference month for the wage bill for the second period is set at March 2020 (reference date 15 May 2020). Unlike the first tranche, the final subsidy will be based on a four months period: June, July, August and September 2020.

  • Reduction of the wage bill in the event of dismissal of employees: in the event of dismissal of employees for business economic reasons, the subsidy amount will be reduced by the wage bill of the employee for whom dismissal is requested for a period of three months.

  • Drop in turnover: unlike the NOW 1.0, for the second tranche the drop in an employer’s turnover must be at least 20% over a four month period. The first day of this four month period (of turnover) can be 1 June, 1 July or 1 August 2020. To calculate the drop in turnover, the reference turnover, also referred to as the turnover for the calendar year 2019, is divided by three. This is then compared with the turnover in the turnover period. The concept of turnover in the second tranche is the same as that of the first tranche.

  • Group determination date: if the drop in turnover at group level is at least 20% and the second tranche is requested at group level, the composition of the group as at 1 June 2020 is decisive. The reference date under the first tranche was 1 March 2020.

  • Selling or splitting off parts or activities: contrary to the regular calculation method, one option available when selling or splitting off parts or activities is to determine the turnover for the reference period by factoring in the turnover for the full calendar months as from the moment of selling/splitting off the part or activity up to 29 February 2020.

  • Dividend and bonus payments and repurchase of own shares at group level: the employer or legal entity (that requests the second tranche) is not permitted to pay dividends to shareholders or bonuses to the executive board, the board of directors or management board for 2020, up to and including the date of the meeting in which the financial statements are adopted. The employer or legal entity is neither permitted to repurchase its own shares. Please beware, the Ministry of Social Affairs and Employment has stated that the concept of executive board, board of directors (or management board) should be interpreted broadly, e.g., registration in the Chamber of Commerce is not decisive. The conditions only apply if it involves advance payments of at least EUR 100,000 or final subsidies of at least EUR 125,000.

  • Dividend and bonus payments and repurchase of own shares at operating company level: if the second tranche is applied for at individual operating company level, the employer or legal entity, the group and the parent company are not permitted to pay dividends to shareholders or bonuses to the executive board, the board of directors or management board of the group and the legal entities or company for 2020 up to and including the date of the meeting in which the financial statements are adopted.

  • Written statement of the head of the group and the parent company: in the event of an application at operating company level in the first tranche, before filing the application the head of the group or the parent company had to state that the conditions relating to dividend and bonus payments and repurchase of own shares had been met. Under the second tranche, an employer or legal entity must have such a statement from both the group head and the parent company before applying for the subsidy.

  • Determination of subsidy: an employer who has applied for both the first and second tranche can apply for the first tranche within 24 weeks after 7 October 2020. Alternatively, both applications can be filed simultaneously within 24 weeks after 15 November 2020 . If an auditor's report must be submitted for an advance payment of at least €100,000 or a final subsidy of at least €125,000, a period of 38 weeks instead of 24 weeks will apply in both cases.

  • Storage: to compensate businesses for their fixed costs, the fixed mark-up in the second tranche has been increased from 30% to 40%.

  • Training: Employers are required to encourage their employees to take further training or retraining. This obligation is a best-efforts obligation.

  • Dismissal for business economic reasons: Under the second tranche, a dismissal request for business economic reasons will no longer be corrected for 150% (as in the first tranche), but for 100% of the amount of the wage bill for each employee dismissed for business economic reasons in the period from 1 June 2020 to 30 September 2020. In addition, it has been determined that the total subsidy amount will be reduced by 5% if the employer makes one or more notifications under the Collective Redundancy (Notification) Act (WMCO) in the period from 30 May 2020 up to and including 30 September 2020 and applies for dismissal during the subsidy period for business economic reasons for at least 20 employees in any working area. The subsidy will not be reduced by 5% if the employer and the trade unions (or, failing this, the employee representation) have reached an agreement on the dismissal application. If agreement cannot be reached, the amount of the subsidy will not be reduced by 5% if the parties jointly request a committee set up by the Labour Foundation (Stichting van de Arbeid) to assess whether the proposed number of business economic dismissals is necessary and the employer has not withdrawn this request with the final application for the subsidy.

  • Works council: the employer must inform the works council or the employee representative body or, failing this, the employees themselves of the application for the second tranche.

NOW 1.0: Adjustment first tranche (March, April and May 2020)

Presentation of the Second Tranche Scheme also included the announcement of an adjustment to the First Tranche Scheme.

  • Filtering wage bill: It does not appear to be technically possible to filter payments made by the UWV via the employer out of the wage bill. Examples include the no-risk policy under the Sickness Benefits Act (Ziektewet) and the Work and Care Act (Wet arbeid en zorg). This filtering is now omitted.

Please contact one of the members of the Deloitte Employment Law Team or Social Insurance/HR Team if you need any assistance.


Employment Law team


Social Insurance/HR team

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