Second Emergency measures regarding Granting for Bridging Employment (in Dutch: NOW 2.0)

23 juni 2020 | Door:  Barry Scheer

Because the Corona crisis continues due to extended health risk measures, compensation from the government is also extended. A new scheme will follow the first scheme.

Since the relaxations in the May 20 scheme, it has also become easier for foreign-based companies with personnel in the Netherlands to qualify for the scheme. Those employers with compulsory insured employees in the Netherlands who have an administrative affiliation with the Dutch tax authorities are able to apply. A company that is not established in the Netherlands cannot or hardly apply for a Dutch bank account number. Until May 20, it was mandatory to have a Dutch bank account number. The application now also allows you to provide a foreign bank account number. A Dutch correspondence address is still mandatory. You can engage Alfa Accountants & Advisors to handle the application on your behalf (and at our address). Please note that the application procedure takes longer, because the application cannot be done digitally. Corresponding between us and UWV therefore takes more time. Our experience with NOW 1.0 was that it took about a week.

NOW 2.0 is extended by four months. The target remains unchanged:

• Support employers to respect current employment and wage costs by full payment
• In doing so, employers commit to 100% continue to pay the wages of the employees concerned (paying less wages means a disproportionate reduction in compensation!).
• NOW 2.0 has an effort obligation for employers to encourage their employees to take additional training.
• The NOW 2.0 requires that no shares be purchased, bonuses and profit-sharing be paid out, at least from companies that receive an allowance of € 125,000 (or € 100,000 advance).

The allowance concerns:

• For employers with a drop in turnover of at least 20%, measured over the cumulative turnover losses of these four months and, if applicable, at group level.
• NOW 2.0 can be requested immediately after NOW 1.0, or just applying for NOW 2.0 is also possible.

o Start date of compensation periods are 1 June, 1 July, 1 August or 1 September

o If NOW 1.0 has been applied; NOW 2.0 is the subsequent period

• NOW 2.0 uses as reference month for the wages of March 2020 (reference date 15 May, so corrections in declarations up to this date are still processed)
• The standard surcharge for labor costs and holiday pay in NOW 2.0 is increased from 30% to 40%.
• Allowance up to a maximum of 90% of the wage, related to the loss of turnover.
• Advance payment is 80% of this allowance.
• The first payment will then take place within four weeks and will be an allowance of two months. The second payment for the final two-month term is made approximately two months after the first payment. In this way you will receive an advance over four months.
• Application open probably from 6 July to 31 August 2020.
• NOW 2.0 has a discount of 105% of the salary of the dismissed employee(s). These are applications for dismissal that are submitted in the period 1 June to 30 September. (NOW 1.0 has a discount of 150% on economical dismissal).
• Discount is only 100% at NOW 2.0 if companies declare on the application form that, if WMCO applies, that they will consult with labor unions about the intended layoffs for a period of 4 weeks. The application for dismissal is therefore filed no earlier than 4 weeks after the WMCO notification has been made to the union organization(s). The discount is 3 times the 100% salary (and not 4). WMCO is an act regarding mandatory notifications if collective redundancy of 20 persons of more is issued.
• It is employer's obligation to continue to inform the Employment Council or staff representation (or in the absence thereof: employees) of the allowance granted.

Post-settlement, auditor's report, third statement or no statement

Now that the allowance has been paid at the time of the crisis, afterwards a report must be issued to assess whether the correct amounts have been paid. Because 80% has been paid as an advance, 20% should be paid afterwards. However, if the report has different outcome, the allowance will be adjusted.

- Post-settlement

• No earlier than October 5 possible to prepare / submit

- Auditor's report

• Two limits are applied, whereby an auditor's report is mandatory:
  • Applies to allowances in advance of € 100,000 or more
  • Applies to the final allowances of at least € 125,000
  • Companies that have received less than € 100,000 in advance must estimate for themselves whether the final allowance will be equal to or higher than € 125,000.

- Third party statement

• Allowances in advance in excess of € 20,000, than statement from a third party is required (such as financial advisor).
• Also the final allowances in excess of € 25,000 require this statement.

If you want to apply for this allowance, contact us. This act is so new that still not all details are clear yet. Just as NOW 1.0, we expect still several adjustments in this act 2.0 and some details as written is this article can be altered in time.