NOW 3: longer but more limited

The coronavirus has an ongoing impact on our society and economy. The government therefore announced a new support and recovery package on August 28, 2020. The Temporary Emergency Work Preservation Bridge (NOW) will be extended for three three-month periods effective October 1, 2020. The NOW 3 is valid until July 1, 2021.

Who is the NOW 3 for?

In the first period (October, November, December 2020), companies with a turnover drop of at least 20% are eligible. From January 2021, there must be at least a 30% drop in turnover. The second NOW 3 period runs from January 1, 2021 to March 31, 2021, and the third period runs from April 1, 2021 to June 30, 2021.

For participation in NOW 3 effective Oct. 1, 2020, it does not matter whether or not you have previously participated in NOW plans.

This is what the NOW 3 looks like

Within the NOW 2, up to 90% of the wage bill was reimbursed. Starting with the NOW 3 from October, that will go down to 80%, this 10% reduction the government is putting into training and from-work-to-work pathways. From January 2021, the subsidy drops to 70% and from April 2021 to 60%. On the other hand, you are also allowed to gradually decrease the wage bill (by 10%, 15% and 20% per period) without having to give up subsidy. The gradual decrease in the wage bill can take place, for example, through the termination of temporary contracts or layoffs.

The NOW 3 is primarily intended as a tool for employers and employees to adapt business operations to the new economic situation. Therefore, the discount that applied before the NOW 2 in case of economic dismissal, also known as the "dismissal penalty," is no longer applied in the NOW 3. Employers therefore have the freedom to set up their organizations as they deem desirable and necessary.

The fixed surcharge for employer expenses, such as vacation pay and pension contributions, remains 40%. The maximum reimbursable wage remains twice the maximum daily wage in the first two periods (October, November, December 2020 and January, February, March 2021). In the third period (April, May, June 2021), this is reduced to a maximum of once the maximum daily wage.

The obligation for employers to encourage their employees to engage in training when applying for the NOW remains. So does the prohibition on paying dividends and bonuses.

Request

The application period for the NOW 3 is expected to start on November 16, 2020. In doing so, an application can be submitted - retroactively - for the first time period (Oct. 1 to Dec. 31, 2020). For each time period, you as an employer can decide whether or not to apply. As with NOW 1 and 2, verification of turnover loss and wage bill will take place retrospectively at the time of the final subsidy determination.

Notice! Employers who have taken advantage of the NOW 1 can apply for this from October 7, 2020 for final grant determination. For the NOW 2, the application is possible after November 15, 2020. This also applies to employers who wish to submit an application for determination simultaneously for both the NOW 1 and NOW 2. A form will be made available for the application.

In conclusion

The exact terms of NOW 3 are currently being finalized and will be announced by October 1, 2020. We will, of course, keep you informed of developments.