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What does the NOW (Emergency Fund for Retention of Employment) entail?

On March 20, 2020 by WePayPeople


The coronavirus does not only have medical consequences. The economy is affected as well. The Dutch government recently announced an extensive package of emergency measures to help companies bridge this period of uncertainty. Part of the package is the abolition of the Reduction in Working Hours (WTV) and the introduction of the temporary Emergency Fund for Retention of Employment (NOW).

What is the Emergency Fund for Retention of Employment?

The NOW is a wage cost subsidy provided to the employer for a period of 3 months, that can be retroactively applied for from the 1st of March 2020. The employer is obliged to pay the full wages to the employee by contract, but will be reimbursed up to 90% of these costs. A difference between the WTV and the NOW, is that the NOW also applies to flex and on-call workers.

Listed below are some important things to know about NOW subsidy:

  • With the application, the employer commits in advance to the obligation not to apply for dismissal on grounds of economic reasons for his employees during the period the allowance is received.
  • The applicant expects at least a 20% loss in revenue.
  • The application is valid for a period of 3 months, which can be extended once by another 3 months (further conditions may apply).
  • The scheme targets turnover decreases from the 1st of March 2020. 

The amount of wage costs allowance depends on the decrease in revenue, but amounts to a maximum of 90% of the wage bill. Below are some examples regarding the relationship between the decrease in revenue and the amount of allowance works out:

  • In case of 100% revenue loss, the allowance amounts to 90% of the employer’s wage bill.
  • In case of 50% revenue loss, the allowance amounts to 45% of the employer’s wage bill.
  • In case of 25% revenue loss, the allowance amounts to 22.5% of the employer’s wage bill.

Further important information about the NOW

NOW subsidy has to be applied for via the UWV, not via the Ministry of Social Affairs and Employment, as was the case with the WTV. Based on the application, the UWV will provide an advance of 80% of the expected contribution. The actual decrease in revenue and the actual wage bill will be determined afterwards. A correction will apply, based on these figures.

The exact date on which NOW applications can be submitted, is not yet known. At the moment it’s not possible to apply for NOW subsidy, but we will inform you about the procedure as soon as we know more.

If you have any questions in the meantime, you can reach us via sales@wepaypeople.nl.