New regulation (NOW) replaces Working hours reduction scheme

New regulation (NOW) replaces Working hours reduction scheme

On March 17th the Dutch government announced emergency measures, in order to provide assistance to employers during the coronavirus crisis. The new regulation, the Temporary Emergency Bridging Measure to Preserve Employment (Tijdelijke Noodmaatregel Overbrugging voor Werkbehoud -NOW), replaces the reduction in working hours scheme (WTV). With the new scheme, the government has earmarked billions to help Dutch employers and business owners during this difficult period.

How does the Temporary Emergency Bridging Measure to Preserve Employment (NOW) work?

If employers expect loss of turnover, they can request compensation towards wage bill of its employees. The compensation for wages employers can claim depends on the amount of loss on turnover. The maximum amount that can be claimed is 90%.

Examples of the relationship between the percentage of turnover loss and wage bill compensation received is as following:

  • If the turnover loss is 100%, the compensation will amount to 90% of wage bill;
  • If the turnover loss is 50%, the compensation will amount to 45% of wage bill;
  • If the turnover loss is 25%, the compensation will amount to 22.5% of wage bill.

What are the requirements for receiving compensation under NOW?

In order to lay claim on compensation under NOW a loss in turnover of at least 20% should be expected.
Furthermore, if an employer claims compensation under the NOW scheme, the employer will not be permitted to make an application to dismiss employees for business economic reasons during the period for which the employer receives compensation.

Through this scheme, employers are obliged to continue to pay employees i the Netherlands with permanent and temporary contracts including on-call workers.

For what period could the compensation be obtained?

Compensation can be requested for turnover the employer has lost since 1 March 2020, for a period of 3 months. After this 3-month period, there is a possibility to have the NOW scheme extended for a further 3 months.

When will I receive the compensation? And what will be the moment of determination of the compensation to be received?

The UWV will pay Dutch employers an advance payment of 80% of the expected compensation, with the actual turnover loss being determined afterwards. After the compensation is finally determined, an adjustment could be made based on the actual loss of turnover and if there has been a decrease in the wage bill.

What about permits already applied for regarding working time reduction (WTV)?

If an application has been made for working time reduction already, but this has not yet been granted, the application will be treated to have been made for the NOW scheme. Those that have applied for WTV will be notified, and further information with regard to the loss of turnover will be requested.

If employers have already been granted a wtv-permit, this will remain in place. If employers hold a wtv-permit and wish to extend it, they will have to apply for the NOW scheme instead.

How to apply for Dutch government aid under NOW?

That's still unclear. The implementation of the new regulation is still to be determined. In any case, the moment of application does not affect the right to compensation. The allowance can be claimed for loss of turnover suffered as from 1 March 2020.

More information from the Ministry on how to apply should be released soon.

Should you have questions about the new NOW scheme? Please contact our employment lawyers Rachelle Mourits and/or Jorien Brouwer.

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