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Emergency measure Bridging for Job Retention (NOW)

For months, the corona crisis has overshadowed our society and the economy. We cannot ignore it, it affects us all. Uncertainty about your health, work, income or existence. It is clear that corona has consequences. The cabinet is now working on the third temporary aid measure NOW 3. How did this support package come about and what are the consequences for you? We explain it for you in this blog.

Economic crisis

Corona has literally turned our lives upside down. Parents became teachers, teachers became vloggers, almost all workers became home workers. Entrepreneurs missed their customers. Greeting each other at five feet is now called the new normal. Due to all the measures taken, the health crisis resulted in an economic crisis at a speed and magnitude that is unparalleled. Mark Rutte called it an intelligent lockdown. Many sectors were nevertheless hit hard, including contract catering, KLM, travel industry, retail in the fashion, events, recreation, catering and temporary employment sectors.

First helping hand: NOW 1.0

And then there was the announcement of the Emergency Bridging Measure for Job Retention (NOW). The government pulled the purse to preserve jobs. Then the NOW 2.0 followed and now there is the NOW 3.0. But what is the government actually doing with this measure? The NOW pays money to the employer. He is only eligible for this with a loss of turnover of at least 20 percent.

The turnover percentage determines the amount of the compensation. With 100 percent loss of turnover, the compensation in NOW 1.0 was 90 percent of the wage costs with a 30 percent mark-up. On balance, an employer received € 1.000 in compensation for every € 1.170 gross wage costs. Due to the employer's costs - such as social security contributions, pension and medical expenses - the support was still not sufficient. If the loss of turnover was 50 percent, the employer thus received 50 percent compensation for the above example. Was the revenue loss less than 20 percent? Then the employer got nothing.

NOW 2.0

In NOW 2.0 the compensation has been increased to 90 percent of the wage costs with a surcharge of 40 percent. With 100 percent loss of turnover, an employer receives € 1.260 compensation for € 1.000 gross wage costs. In addition, the NOW 2.0 has additional conditions:

  • No shares will be bought back or paid out tomorrow.
  • No bonuses may be paid at the top of the company.
  • Employers must make efforts for retraining and further training.

What are the benefits of NOW?

Employers who receive support through NOW 1.0 or 2.0 are not allowed to apply for dismissal for business reasons. In addition, they have to spend the compensation on the wages of the employees. Now employers have not (or at least less) run into acute financial problems and many employees have been able to keep their jobs. More than a million employees continue to be paid thanks to NOW. Despite this, unemployment has risen to over 400.000. If the cabinet would do nothing and a second wave with additional restrictions would occur, unemployment would rise to 10 percent in 2021, according to the Central Planning Bureau.

NOW 3.0

Now there is the following aid measure: NOW 3.0. This will continue until July 1, 2021, but the compensation will decrease. Until December 31, the threshold is still 20 percent revenue loss; in 2021, employers will only be eligible with a 30 percent loss of turnover. The compensation is 80 percent for the first three months, 70 percent the three months after and 60 percent for the last three months - all with an employer's contribution of 40 percent. In addition, the compensation in the last three months is limited to the maximum daily wage of € 4.769, while for NOW 1.0, NOW 2.0 and the first half of NOW 3.0 this was twice the maximum daily wage.

What is new is that employers are allowed to lower the wage bill. They may therefore apply for dismissal or request a wage sacrifice without penalty. In the first three months the wage bill may fall by 10 percent, the second three months by 15 percent and after that by 20 percent. For the period 2020-2022, the government is earmarking another € 1,4 billion, divided into:

  • € 650 million for guidance from work (idleness) to work
  • € 350 million to prevent youth unemployment
  • € 230 million for training and development
  • € 150 million for poverty reduction

An extensive package of measures that many employers and employees have to deal with.

More information

Questions about the corona crisis, support measures or the consequences of the government budget on your work and income? Don't hesitate to ask us! Our Service Center is available every working day from 8.00 a.m. to 18.00 p.m. via sc@unie.nl and 0345 851 963.

 

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