On March 17, 2020, the government announced that the Short-Working Hours Scheme will be canceled and replaced by a new emergency measure. It was published on March 31, 2020; the Temporary emergency bridging measure to maintain employment (NOW). This emergency measure concerns a subsidy scheme that employers can apply to if they experience a decline in turnover. The greater the decline, the higher the subsidy.
To be eligible for this subsidy, you must meet a number of conditions.
Goal
The purpose of the NOW is to prevent unemployment by subsidizing part of the wage costs over a period in which there is an acute decline in turnover of at least 20%. Through this scheme, the government hopes that employers can retain all employees.
To request
The NOW scheme itself assumes an application period from April 14, 2020 to May 31, 2020. However, on April 3, the UWV will announce whether the target date of April 6 will be achieved.
An application must be submitted for each payroll tax number. This may mean that a group with multiple employers must submit multiple applications.
Decision period
The UWV has a decision period of 13 weeks. However, the advance is paid out after 2-4 weeks. This means that the first funds will be paid out in April. The advance can be paid in a maximum of 3 instalments.
Subsidy amount
The subsidy is linked to the degree of decline in turnover.
- 100% loss of turnover: subsidy of 90% of the total wage bill;
- 50% loss of turnover: subsidy of 45% of the total wage bill;
- 25% loss of turnover: subsidy of 22.5% of the total wage bill.
- 20% loss of turnover: no subsidy.
The formula: A x B x 3 x 1.3 x 0.9
A = % sales decrease
B = wage bill
3 = 3 months
1.3 = Surcharge of 30% on wage bill
0.9 = 90% will be reimbursed
Turnover and measurement period
For the concept of turnover, reference is made to the definition of turnover in annual accounts law. The advice is to involve your accountant in this process.
An entitlement to the wage subsidy arises if there is a decline in turnover of at least 20% over a consecutive period of 3 calendar months. The start date of this 3-month measurement period must fall on March 1, 2020, April 1 or May 1, 2020.
March 1 – May 31
April 1 – June 30
May 1 – July 31
The measurement period selected upon application is fixed. This cannot be changed at a later time. So choose the measurement period carefully. When do you expect the biggest drop in turnover? The reason for the decline in turnover is not relevant and does not need to be stated.
Ultimately, when the subsidy is awarded (in retrospect), the turnover in the chosen measurement period is compared with 25% of the annual turnover for 2019. Then you have two periods of 3 months that you compare with each other.
If a company consists of a number of business units (legal entities) that together form a group, the decline in turnover of the entire group is taken into account.
Wage bill
The concept of wage is based on the SV wage from current employment. This concerns the wages of your own employees, not for hired staff. This subsidy has a maximum wage per employee of €9,538 (2x maximum premium wage). The surplus is not eligible for a subsidy. Due to the importance of the wage bill for the subsidy, it is important that employers continue to submit wage returns to the Tax Authorities on time.
A surcharge of 30% is added to the wage bill. This is a fixed surcharge to cover, among other things, pension premiums, insurance premiums and accrual of holiday pay.
The UVW uses the wage bill for January 2020 as a basis for calculating the advance amount.
- % actual decline in turnover × wage bill March 1, 2020 – May 31, 2020 × 1.3 × 0.9 (x80%)
The wage bill for the months March to May 2020 is used as a basis for the calculation in the context of the final award of the subsidy.
- % actual turnover decrease × wage bill March 1, 2020 – May 31, 2020 × 1.3 × 0.9
- Lower wage bill: subsidy may decrease
- Higher wage bill: no increase in subsidy
This period, March-May, is fixed. It therefore does not matter which of the three measurement periods mentioned under 'turnover' you have chosen.
Calculation examples
Example: request
The employer achieved a turnover of € 2,000,000 in 2019 and the wage bill in January 2020 was € 200,000. The wage bill then results in × 3 × 1.3 = € 780,000
- Suppose turnover is expected to decrease by
- 10%: subsidy = € 0
- 50%: subsidy = 50% × 90% × € 780,000 = € 351,000 (advance payment: × 0.8 = € 280,800)
- 100%: subsidy = 100% × 90% × € 780,000 = € 702,000 (advance payment: × 0.8 = € 561,600)
Example assignment
The employer achieved a turnover of € 2,000,000 in 2019 and the wage bill from March 1, 2020 to May 31, 2020 is € 600,000. The wage bill then results in × 1.3 = € 780,000.
- Suppose turnover has actually fallen by
- 5%: subsidy = €0
- 60%: subsidy = 60% × 90% × € 780,000 = € 421,200 (advance payment was € 280,800)
- 90%: subsidy = 90% × 90% × € 780,000 = € 631,800 (advance payment was € 561,600)
Error in the NOW?
As shown above, the subsidy will be reduced if it turns out that the wage bill from March to May 2020 was lower than in January 2020. According to the Regulation, the amount that is deducted from the wage compensation is equal to 90% of the difference between the wage bill on which the compensation is based on the wage bill actually paid in the months March to April. The problem with this calculation is that the percentage of turnover loss is not taken into account. In an extreme case, this can lead to the employer having to pay back everything (or even more!). We are awaiting a response from the government to this apparent error.
Main obligations of the employer
The dismissal ban and the sanction
Dismissal applications submitted to the UWV in the period prior to March 17, 2020 are not covered by the dismissal ban. All dismissal applications submitted subsequently are subject to the ban on dismissal. The employer can still withdraw these applications within 5 working days after the NOW comes into effect (publication date April 1, withdrawal deadline Monday April 6).
The sanction for violating the dismissal ban is a reduction and correction of the amount of the subsidy. When the subsidy is awarded, the wages of the employees for whom dismissal has been requested are determined. The amount of the total wage bill of these employees is increased by 50% and then deducted from the total wage bill on which the final subsidy amount is based.
Sanction abuse and enforcement
The premise of the scheme is that the employer is responsible for the information he provides. The employer is obliged to report immediately if he no longer meets the subsidy conditions, for example if the decline in turnover does not occur after all. A data exchange between the Tax Authorities and the UWV is used to verify the information provided. In principle, the exchange focuses on the names and account numbers of applicants.
If there is a suspicion of abuse or improper use during or when determining the subsidy, the UWV can file a report.
The subsidy scheme falls under administrative law, which means that objections and appeals can be made against the decisions of the UWV.
Do you have any questions or would you just like to spar? Don't hesitate and send us an email: Arbeidrechtvragen@lexsigma.nl or contact Lexsigma Healthcare in Amsterdam (020 – 8940700) or call them directly.
Bob van der Kamp (06-47012614)
Ramon Pasma (06-13503918)
Lara Smeets (06-12227744)
You can also find more information in our corona file: Legal assistance with corona by Lexsigma Advocaten
Nederlands