Minister relaxes wage compensation requirements for the NOW scheme

The government is relaxing the wage compensation scheme (NOW) for operating companies and other business units affected by the corona crisis. However, companies that want to claim this scheme are not allowed to pay out dividends or bonuses and must make agreements with the trade unions about job retention.

With the expansion of the NOW scheme, Minister Wouter Koolmees of Social Affairs is responding to a call from employers. They also want individual business units to be able to claim compensation for wage costs.

Under the old scheme, companies could only claim NOW as a group if their total turnover was 20 percent lower than last year. Due to these conditions, subsidiaries, which were completely paralyzed while sister companies were still able to maintain turnover to some extent, could not claim NOW. As a result, operating companies were forced to lay off staff, employers said.

Koolmees states that there are risks to the expanded NOW scheme. This allows companies to shift costs and revenue between components. The minister has therefore added extra rules: these companies may not pay out dividends or bonuses for 2020. Buying back your own shares is also taboo. Furthermore, companies requesting support must enter into agreements with trade unions. Companies with fewer than twenty employees must agree to employee representation. There will also be additional requirements that will be tested by the accountant.

The current NOW scheme expires on May 31. With the expansion, the government seems to be responding to an extension of the NOW emergency package, but with stricter requirements.

Read more information here from the central government about the extension of the measures.