NOW 3.0 regulation published

Earlier we informed you about the arrival of the NOW 3.0. Meanwhile, the final text of the regulation published. This extends the temporary emergency measure bridging for job preservation in three tranches effective October 1, 2020, through June 2021.

This is what the NOW 3.0 looks like

During NOW 3.0, the wage bill reimbursement rate decreases incrementally to a maximum of 80% in the October-December 2020 timeframe (third tranche) and a maximum of 70% in the January-March 2021 timeframe (fourth tranche). From April through June 2021 (fifth tranche), the maximum wage bill reimbursement percentage is 60%.

The reduction of the subsidy in case of economic dismissal will be eliminated. So that means no more reduction of the (final) subsidy. In addition, there will no longer be a 5% discount on the entire subsidy amount if the employer has not reached an agreement with the union or other employee representation in the case of larger dismissal requests. The legislature has chosen not to make any changes to dismissal law in the case of economic dismissal. This means, among other things, that the employer continues to owe the employee a transition fee.

When the employer uses the NOW 3.0 and proceeds with an economic dismissal, the employer has an obligation of effort to assist the employee in finding a new job. To do so, the employer must contact the UWV via the NOW phone about job-to-job counseling. If the employer fails to do so, a penalty of 5% of the NOW subsidy will follow. This obligation also applies to employees whose employment is not continued after the expiration of a temporary contract or to employees with whom agreement is reached on termination by mutual consent

On the other hand, the NOW 3.0 provides (limited) room for a decreasing wage bill (e.g. due to company economic dismissal) without resulting in a reduction of the (final) subsidy. The exemption percentage for the wage sum decrease increases per tranche from 10% in the third tranche to 15% in the fourth tranche, and finally to 20% in the fifth tranche.

Furthermore, in the NOW 3.0, the minimum turnover loss for claiming the NOW will be increased from 20% to 30% from January 1, 2021. The method of calculating turnover loss remains the same as the NOW 1.0 and 2.0 And the flat 40% mark-up also remains in place in all three tranches. The maximum reimbursable wage per employee goes down in the fifth tranche to the maximum daily wage (since July 1, 2020, €4,845.47 per month).

Finally, under the NOW 3.0, dividend and bonus payments and share repurchases are also prohibited. The application period for the NOW 3.0 starts on Nov. 16, 2020.

Want to know more about the NOW 3.0? Feel free to contact us.