1. Introduction of the Employment Bridging Emergency Fund (NOW)
In light of the economic consequences of the coronavirus, the Employment Bridging Emergency Fund (Noodmaatregel Overbrugging voor Werkbehoud – NOW) has been introduced with immediate effect. The NOW provides for temporary wage cost subsidy for employers that are impacted by a drop in turnover. The NOW has retroactive effect from 1 March 2020.
2. Withdrawal of short-time working scheme
The short-time working scheme (regeling werktijdverkorting – wtv) has been withdrawn with immediate effect. Applications already filed for the short-time working scheme will be handled as applications for the NOW.
3. NOW conditions
Two conditions apply to the NOW: (i) you expect a drop in turnover of at least 20% as from 1 March 2020; and (ii) you will not lay off any staff on economic grounds during the period in which the NOW can be relied on.
4. Duration of the NOW
The NOW applies for a period of three months. One extension of a further three months is possible. Further conditions may be attached to that extension. It is not yet clear what exactly those conditions will be.
5. Amount of the NOW
The contribution amounts to 90% of the payroll total in the event of a drop in turnover of 100%. If the drop in turnover is lower, the contribution is determined pro rata to the drop in turnover. It is not yet clear exactly which remuneration components are counted in the payroll total.
6. Flexible contracts
Unlike in the short-time working scheme, flexible contracts, such as agency contracts and stand-by contracts, also fall within the scope of the NOW. That is of course favourable for sectors in which flexible contracts are frequently used, such as the hospitality industry.
The contribution under the NOW is awarded as an advance. The advance amounts to 80% of the expected contribution. If, for instance, a 50% drop in turnover is expected, the advance amounts to 36% of the payroll total. The exact drop in turnover is determined at a later time. A correction may be made when the final contribution is determined.
8. Applying for the NOW
Applications for the NOW must be filed with the UWV (Employee Insurance Agency)It is not yet possible to file an application. You will be informed as soon as that is possible. Applications in excess of an amount yet to be determined require an auditor’s report. If you have already filed an application for the short-time working scheme, you need not file a new application for the NOW.
9. Consequences of the NOW for employees
Employees are entitled to continued payment of their entire wages during the term of the NOW. Unlike the short-time working scheme, the NOW does not affect their unemployment benefits entitlement.
10. Self-employed persons
The NOW does not apply to self-employed persons. The Besluit bijstandverlening zelfstandigen (Social Assistance (Self-Employed Persons) Decree) applies to self-employed persons who are forced to cease their operations.
If you have any questions about the employment law consequences of the coronavirus, please contact our partner employment law Elias van Kampen at email@example.com.