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As of today (16 November 2020), the application window for the NOW 3.0 scheme has been opened. Employers will be able to submit an application for a subsidy to the UWV for the third time within the framework of the Temporary Emergency Measure Bridging Work ("NOW").
The coronavirus has had a major impact on the economy for some time. The NOW scheme was set up by the Cabinet to limit the economic consequences of the corona crisis for employers. The NOW 1.0 and NOW 2.0 schemes have now expired. For more information on the content of these earlier measures, please consult our previous blogs (NOW 1.0 and NOW 2.0).
An employer’s entitlement to NOW 3.0 does not depend on whether NOW 1.0 and NOW 2.0 have been used. Below is a brief overview of the contents of the NOW 3.0 scheme and the changes with respect to the previous regulations.
The NOW 1.0 and NOW 2.0 schemes were designed to maintain employment as far as possible. NOW 3.0 is also intended to maintain employment. However, the explanation of NOW 3.0 shows that this is no longer its sole objective. The NOW 3.0 scheme is also intended to prepare for, and adapt to, the new economic situation. It is also noted that not all employment can be maintained under the current economic conditions. The above is also reflected in the way in which NOW 3.0 is structured.
Firstly, the duration of NOW 3.0 is longer than that of NOW 1.0 and NOW 2.0. NOW 3.0 is valid for the duration of nine months. This period is divided into three tranches of 3 months between 1 October 2020 and 30 June 2021. These periods are called the third, fourth and fifth tranches – following on from the NOW 1.0 and NOW 2.0 tranches. The subsidy for the period between 1 October 2020 and 31 December 2020 (tranche 3) can be retroactively applied for between 16 November and 13 December 2020.
As stated above, the duration is divided into three tranches. Different requirements apply to each period in order to qualify for the subsidy. The amount of the subsidy also differs per period. A brief overview is given below:
For all three tranches, the wage costs for June 2020 will be decisive in determining the advance payment to be granted.
For NOW 1.0 and NOW 2.0, a fine could be imposed on any employer who applied for a dismissal permit on business economic grounds during the period for which the subsidy was granted. This fine lapsed under NOW 3.0. In the event of collective dismissal, the employer is also no longer obliged to reach agreement in advance with the trade union or workers' association or otherwise face a subsidy reduction of 5%. This will make it easier for employers to proceed with dismissal for business economic grounds under NOW 3.0. Notwithstanding this, the obligations arising from the Collective Redundancy (Notification) Act remain in full force and effect.
In order to enable employers to adapt to the new economic situation, the NOW 3.0 will provide for a more flexible approach to a reduction in the wage costs during the period in which the subsidy is applied for (compared to the month of June 2020, the wage costs of which will serve as the basis for granting the advance payment). According to the previous calculation method, this would lead to a lower amount of subsidy at the time of final determination and thus create a repayment obligation. In the case of NOW 3.0, no correction is made for every reduction. A so-called 'exemption percentage' has been set for each tranche. In the third tranche this percentage is 10%, in the fourth tranche it is 15% and in the fifth tranche it is 20%. A fall in the wage costs within this percentage does not lead to a subsequent correction. To the extent that the reduction exceeds the aforementioned percentages, the correction will only be applied to the part of the wage costs that has fallen too greatly.
Training and guidance in other work
NOW 2.0 already contained an obligation for employers to make training efforts in order to contribute to the job retention of the relevant employees. Under NOW 3.0, employers are still obliged to make an effort to support employees from one job to another. This obligation arises at the moment the employer has the intention to terminate the employment contract, regardless of the manner in which the termination will take place. In the event of economic dismissal, the UWV must in any case be contacted, via the so-called 'NOW telephone UWV'. Each affected wage tax number will then be registered with the UWV. If the UWV NOW telephone is not contacted, a fine of 5% of the subsidy will be imposed. This contact is without prejudice to other efforts in the context of job-to-job support.
A number of obligations already applied to the employer during the NOW 1.0 and/or NOW 2.0. These obligations are briefly repeated below:
Non-compliance with these obligations will, in most cases, lead to a reduction in the grant of subsidy.
The amounts received by employers under NOW 1.0 and NOW 2.0 are an advance payment from the UWV. The calculation was based on an estimate of the loss of turnover and the wage costs for the period in question. Since 7 October 2020, employers can request the UWV to definitively determine the subsidy for NOW 1.0. The request for determination must be made in good time and a number of documents must be submitted. Depending on the amount of the subsidy, the employer must also send an auditor's or third party's report. The application will also take some time. It is expected that the final determination of the NOW 2.0 can only be requested in the course of 2021.
Application for the third tranche of NOW 3.0 is possible for a duration of 4 weeks, until 13 December 2020. After the granting of the subsidy, the employer will receive an advance payment, as with NOW 1.0 and 2.0, which will be paid in three instalments. Application for the 4th instalment will be possible from 15 February to 14 March 2021 and for the 5th instalment from 17 May to 13 June 2021.
If you have any questions about the NOW or dismissal on account of business economic reasons, please feel free to contact Rachelle Mourits, employment lawyer at Blenheim.
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