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Amendments to the Temporary Emergency Measure Bridging for Work Retention Regulation (‘NOW’)09-04-2020

The NOW regulation, which was announced on March 31, has already changed in a few areas. This mainly concerns an extra test when submitting a dismissal application for business reasons during the NOW period and a change in the way in which the fine that applies is calculated. In this blog we inform you about the changes.

It concerns a number of technical adjustments and a tightening.

  1. The penalty for a dismissal application for business economic reasons is calculated differently and therefore has more impact on the amount of the subsidy.
  2. The term to definitively determine the subsidy has been extended from 22 weeks to 52 weeks.
  3. Employers with a foreign account number can submit a Dutch account number within 4 weeks to receive the subsidy.
  4. In case of a dismissal application for economic reasons, an employer will have to demonstrate that and why dismissal cannot be prevented by appealing to the NOW.
  5. The obligation for the employer not to apply for a business dismissal during the subsidy period applies after March 17, 2020 (and not after March 18, 2020).

The two most important changes relate to the situation in which the employer nevertheless applies for a dismissal from UWV for economic reasons and also appeals to NOW.

Changed calculation of the amount of subsidy in the event of business dismissal

An employer who appeals to the NOW undertakes not to apply for a economic dismissal from UWV for the period after 17 March to 31 May 2020. If the employer does, the January 2020 wage bill would be decreased by 150% of the wages of the employees proposed for dismissal (regardless of whether the dismissal applications are honored).

However, according to the Minister, this sanction does not have the intended effect on the ultimate level of the subsidy, because it is related to the loss of turnover (as a result of which the subsidy decreases proportionately to the percentage of loss of turnover). Although the fall in the wage bill has an impact on the amount of the subsidy (which will be lower as a result), as long as the loss of turnover is taken into account, an employer who reduces his wage bill due to economic dismissal may still be entitled to a (too high) subsidy.

That is not what is meant, according to the Minister. Applying for a dismissal for economic reasons must have additional consequences for the subsidy amount. That is why the calculation method for this situation has been adjusted, whereby it is not the wage bill, but the subsidy itself that is reduced by the wages of the employees proposed for dismissal x 150%.

If the employer submits a dismissal application to UWV after March 17, 2020 for economic reasons (and does not withdraw it or does not withdraw it in time), the subsidy will be reduced as follows:

D x 1.5 x 3 x 1.3 x 0.9.

D is the January 2020 wage bill of the employees proposed for dismissal multiplied by 150% (the sanction) x 3 (subsidy period March-May 2020) x 1.3 (30% employer costs) x 90% (maximum subsidy amount).

For employers who, despite the ban, nevertheless apply for dismissal for economic reasons, this amount is therefore fully deducted from the subsidy.

Strengthened UWV test in case of business dismissal

If the employer nevertheless applies for redundancy for his employees at UWV, this will not only have consequences for the amount of the subsidy, but also for the assessment of those applications. The employer must be able to explain to UWV why economic dismissal is necessary and why the NOW subsidy is not sufficient to prevent that dismissal. In the explanatory notes to this amendment, the Minister does point out that the employer keeps the leeway, as it always applies, to be able to take such a decision and that UWV will therefore exercise restraint.

The tightening applies to applications for dismissal from 2 April 2020, because before that date there was no clarity about the interpretation of the conditions, according to the Minister.

If you have any questions about the (amended) NOW or the submission of an application, please do not hesitate to contact us. If new changes are made to the NOW scheme, we will of course keep you informed.

You can also ask any questions about the NOW or other employment-related questions related to the Corona crisis via the online (Dutch) webinar that we organize on Friday 17 April between 4 and 5 p.m.

 

 

Hanneke Klinckhamers

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