The Netherlands: “NOW” Wage Subsidy Program Rules Eased

Last week, Dutch Minister Koolmees sent a letter to the Lower House, confirming an expansion of the temporary Emergency Bridging Measure for Job Opportunities program ("NOW").


Briefly, the NOW program provides that businesses that suffer at least a 20% loss in their revenue over a three-month period will receive a subsidy of up to 90% of their wage costs, proportionate to the loss in revenue, for April, May and June.

The assumption underlying the NOW program is that for larger entities with complex legal structures and affiliates, the calculation for the 20% drop in revenue would take into account the entity as a whole. Under the existing NOW Regulation, it was not possible for each individual operating company with its own legal identity to submit a separate NOW application, based purely on the drop in revenue of that operating company.

The government has relaxed the Regulation on this point.

If an operating company (which is part of a group) has suffered a drop in revenue of 20% or more, even if the overall group's drop in revenue is less than 20%, that operating company can still submit a NOW application. This deviation from the general rule does not apply if group revenue losses are 20% or more, because in that case, the group (versus the individual operating company) can already apply for the NOW.  

The following provisions apply, however:

  1. the groups must confirm that they will not declare dividends or pay out bonuses for 2020 or buy back their own shares before the date when the annual financial statements for 2020 are adopted at a shareholders' meeting;
  2. an operating company with 20 employees or more must have an agreement in place with the relevant trade unions, or failing that, some other employee representative body (such as a works council or a staff committee), concerning retention of work at the company. An agreement with a staff representative body is sufficient for operating companies with fewer than 20 employees;
  3. groups with a staff subsidiary company [personeel-bv] must always use the loss in revenue at the group level;
  4. further audit conditions will have to be satisfied, and these have yet to be determined.

Commencement date

These extension rules come into force immediately.

Extension of NOW

The government will decide by May 31, 2020 whether or not the NOW regulation will be extended for an additional three months (up to and including August 2020). One can easily imagine that additional conditions could be brought in at that point, such as the figures for lost revenue, the amount of the subsidy and the salaries to be compensated.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.