COVID-19 CRISIS AND GOVERNMENT MEASURES FOR COMPANIES
In order to maintain employment as much as possible during the Corona crisis, companies are already making frequent use of the temporary Emergency Measure Employment Bridging (NOW scheme). More than 100,000 companies have now appealed to this scheme at the UWV (Employee Insurance Agency) in the Netherlands. In principle, the temporary scheme applies until 31 May this year. However, renewal is possible and will be announced before June 1, 2020.
The NOW scheme is not static. On April 22 and 1st of May 2020, a number of important changes were announced by Minister Koolmees of Social Affairs and Employment. Companies that have lost more than twenty percent of their turnover during these months will be reimbursed with this scheme up to a maximum of ninety percent of their wage costs, but because the scheme sometimes offers no solution in practice and has been created under pressure, the government widens the arrangement on certain points.
For example, the Concern Regulation has been adjusted. In some groups, some operating companies have come to a complete or partial standstill due to the Corona crisis, while other operating companies within the group are generating sufficient turnover or even making a profit. The group as a whole does not meet the criterion of the twenty percent loss of turnover. Employers ‘and employees’ organizations recently warned that the largely stagnation of operating companies is not always soluble within a group and that jobs will then be lost. Concerns whose entire turnover decrease is twenty percent or more cannot make use of the widening remain on the regular NOW scheme of 2 April 2020.
The Minister acknowledges that broadening the conditions entail some risks and that large companies can show strategic behaviour and shift costs and turnover. Therefore, Minister Koolmees is prepared to broaden this provision with a view to maintaining jobs, but under additional conditions. Groups of companies of which an operating company appeals to the scheme must declare prior to the application that they will not pay dividends, bonuses or purchase own shares for 2020. In addition, an agreement is needed prior to the application with the union on job preservation, or an employee representation at operating companies with fewer than twenty employees. There will also be additional requirements that will be reviewed by the accountant. This expansion does not change the main effect of the NOW. The NOW also remains based for these operating companies on the basis of the turnover loss compared to the turnover in 2019 and the wages bill of January 2020 or November 2019. The NOW scheme is applied for digitally at the UWV and it then decides on this within a few weeks.
Finally: If employers do not make use of the NOW scheme and during the scheme proceed to applications for dismissal for economic reasons, the UWV will take into account whether redundancies can be prevented by applying for a NOW subsidy. This means that employers who decide to reorganize now must take into account that the dismissal application is assessed under the NOW scheme. In other words: UWV will investigate whether dismissal can be prevented by the NOW scheme. The objective of the NOW scheme is also in line with this, namely to prevent dismissal as much as possible.
For further questions about the NOW scheme and whether that offers a solution, please contact us. Telephone 00 31 (0)23 – 8445191 or email us at email@example.com.