The extended NOW scheme, NOW 2.0, was published on 25 June 2020.

The purpose of the NOW remains largely the same: make it possible for employers with a turnover drop of at least 20% to keep as many employees as possible employed. This is subject to the following condition: no profits or bonuses must be distributed and no shares must be repurchased.

Expectations are that from 6 July 2020 an allowance for wage costs can be applied for at the UWV for the months of June, July, August and September 2020. Grant applications are open to both employers who submitted an application in the first period and to first-time applicants for a NOW subsidy.

The extended NOW scheme applies the same system of compensation, but the new scheme also contains changes:

• Deadline: July 6 to August 31.
• Duration of the scheme: 4 months (June, July, August and September 2020) instead of 3 months.
• Turnover decline period: 4 months, starting on June 1, July 1 or August 1, 2020. If NOW 1.0 was used, then the turnover decline period must correspond to the period chosen under NOW 1.0.
• Flat-rate surcharge: The fixed (flat-rate) surcharge with regard to labour costs will be increased from 30 to 40 percent. The NOW also contributes to costs other than labour costs.
• Reference month wage sum: The reference month for the wage sum will be March 2020.
• Dismissal fine: The correction to the subsidy in the event of dismissal for economic reasons has been adjusted in NOW 2.0. The correction will continue to apply, but the subsidy will no longer be reduced further in the event of a dismissal for economic reasons. At the time of settlement, the correction factor for dismissal applications for economic reasons will no longer be 150%, but only 100% of the amount of the wages of the employees in respect of whom dismissal applications have been filed. Please note that the redundancies will often not materialize during the period of application of NOW 2.0, but the affected workers' wages will still be deducted from the grant. This concerns applications for dismissal that will be submitted in the period from 1 June to 30 September 2020.
• Discount subsidy for collective redundancies: The subsidy amount will be reduced by 5% if the employer submits (a) a WMCO notification in the period from 30 May to 30 September 2020 and (b) a request for approval to the UWV for dismissal of 20 or more employees in the period from 1 June to 30 September 2020. This subsidy discount can be avoided if an agreement is made in advance with the unions or the employees' representatives.
• Bonus, profit distribution and share buyback: In addition, a company that makes use of the NOW 2.0 scheme and that receives an advance payment of at least € 100,000 or that receives a subsidy of at least € 125,000 is not allowed to make a profit distribution to shareholders or to issue bonuses to the Board of Directors, (titular) directors and management. Nor is it allowed to repurchase its own shares for the year 2020, up to and including the day of the shareholders' meeting in which the annual accounts are adopted in 2021. Bonuses include both profit-sharing and other bonus payments. The aforementioned prohibitions also apply to all companies that apply for a NOW 2.0 subsidy on the basis of a turnover drop of at least 20% at the level of an individual operating company, without applying the threshold amounts (€ 100,000 advance / € 125,000 subsidy). It is important to note that in this situation the dividend prohibition and the prohibition to buy back own shares seems to apply to the entire group and not only to the individual operating company.
• Best-efforts obligation for further training or retraining: Employers are under a best-efforts duty to encourage their employees to take additional training or retraining. In support of this endeavour, the cabinet is presenting a supplementary crisis package. The details of this package still need to be worked out. The works council must monitor compliance with this obligation.

We are happy to help you if you have any questions about the NOW. On Tuesday 30 June 2020 at 2:30 pm, AKD will organise a webinar in which we will answer your questions. Click here for more information and to register for this webinar.