NOW 3.0 announced

31 Aug 2020

Ilse Baijens

On 28 August last, the Ministry of Economic Affairs and Climate announced that the NOW scheme will be extended for three three-month periods from 1 October next. Below you will find an overview of the schemes per period. You will find an explanation at the bottom of the overview. The text from the Ministry’s letter to the parliament can be found here. The exact text of the regulation under NOW 3.0 will be published by the Ministry at a later date.

Plaatje NOW 3.0 ENG.PNG

The first period will run from 1 October 2020 to 31 December 2020. The second period will run from 1 January 2021 to 31 March 2021. The third period will run from 1 April 2021 to 30 June 2021.

The minimum loss in turnover in the first period will remain at least 20%, as under NOW 1.0 and NOW 2.0. In the second and third periods, the minimum decrease in turnover will be 30%.

Of the reimbursement percentage of 90% during the first period, 10% will be used for training and work-to-work pathways. This percentage will be withheld by the UWV and employers will therefore only be entitled to a maximum of 80% subsidy. In this way, the government and the social partners want to avoid as much as possible that people have to resort to social security if it turns out to be necessary for a company to let people go. After all, finding another job is easiest when an employee is still employed. The government wants to facilitate the social partners in this respect, for example by making money available for the transition from work to work.

At the end of the first period, the percentage of compensation will be gradually reduced: a maximum of 70% in the second period and 60% in the third period.

As under NOW 1.0 and NOW 2.0, the employer will receive an advance of 80% of the compensation amount. At the conclusion of the compensation period, the employer must ask for a compensation determination.

Under NOW 3.0, unlike under NOW 1.0 and 2.0, the wage bill may be partially reduced without this having a negative impact on the compensation. This is called the exemption percentage. It is 10% in the first period, 15% in the second period and 20% in the third period. Employers, in consultation with employees, can determine how the wage bill will decrease. This can be done through natural progression (e.g. the non-renewal of a temporary contract), dismissal or a voluntary wage sacrifice (note: the rules of employment law do in principle not allow for unilateral changes!). The reduction in the compensation that applied in respect of dismissal for economic reasons is also abandoned under NOW 3.0.

The maximum wage to be reimbursed per employee per month in the first and second periods remains the same as under NOW 1.0 and 2.0: twice the maximum daily wage, which amounts to EUR 9,538 gross per month. In the third period, this will be once the maximum daily wage.

The effort obligation aimed at training and the ban on paying dividends and bonuses, as this applied under NOW 2.0, is maintained under NOW 3.0. The fixed surcharge of 40% also remains under NOW 3.0.

Employers can decide for each period whether they wish to apply for NOW 3.0 and, if so, over what period of time.  It is not required that the employer has also made use of NOW 1.0 and/or 2.0. The compensation for the first period under NOW 3.0 can be applied for as of 16 November next.

As stated above, the exact text of the scheme under NOW 3.0 will be published by the Ministry at a later date. It is possible that this may result in changes in relation to the above. As soon as the final text is known, we will inform you further.