In recent weeks, the government has taken many measures against the spread of the coronavirus (SARS-CoV-19) in the Netherlands. On 17 March 2020, the government announced an economic emergency package to protect jobs and incomes during the corona crisis. One of the most important measures from that package for your company is the temporary Emergency Measure Overbrugging for Retention of Employment ("NOW"). The NOW grant can be applied for since 6 April 2020 and, at the time of writing, the first 1.3 billion euros have already been disbursed.
In this article, we discuss what conditions your company must meet to claim the NOW and explain what legal steps your company can take to cash in on your claim with the UWV. In other words, as a CFO or HR employee, what can you do if your claim is rejected or your advance is recovered?
The preliminary question your company should ask itself is whether it is strategically and/or legally desirable to apply for the NOW grant. After all, by doing so, you are cutting paths for the future and limiting reorganisation options, such as collective redundancies. Our specialists from the Labour & Organisation section can advise you on this.
To be eligible for the NOW, your company must:
So you will be expected to make an effort for your business to keep the January 2020 wage bill the same as far as possible and continue paying your employees. A decrease in the wage bill will therefore affect the amount of the final NOW subsidy your business can claim.
The amount of the turnover loss is calculated by dividing the total turnover from 2019 by four and comparing that with the turnover in the period March-April-May, April-May-June, or May-June-July 2020. The higher the turnover loss, the higher the wage bill allowance.
The allowance is a maximum of 90 per cent of the wage bill. The wage bill is calculated on the basis of your wage declaration to the Tax and Customs Administration. The UWV automatically takes this over. However, there is a maximum wage sum per employee. Wages above the amount of € 9,538 per month are not compensated. Additional charges and costs such as employer and employee contributions to pension and holiday allowance accrual are also compensated. To keep the application procedure as quick and simple as possible, a surcharge for employer expenses of 30% has been chosen for all cases.
For the relief, it does not matter what type of employment contract your employee has. Everyone for whom you file a wage declaration and who is insured for the WW, ZW or WIA, falls under the wage bill for which your company can receive a subsidy. So the salary of your flex workers will also be compensated. Contract workers such as ZZP'ers and also temporary workers are excluded, as are uninsured and voluntarily insured DGAs.
The advance is based on the wage bill in January 2020. If the wage bill for the months March-April-May 2020 is lower, the amount of the allowance will be reduced by 90% of the amount by which the wage bill has fallen. This does not take into account the loss of turnover incurred.
It means that insofar as the loss of turnover decreases, the amount to be redeemed will be increasingly out of proportion to the decrease in the wage bill. This may even lead to the situation where the amount to be offset exceeds the total compensation. This is the case when the relative decrease in the wage bill exceeds the percentage decrease in turnover. Example: a company whose turnover fell by 20% and whose average wage bill in the months of March to April 2020 is 26% lower than the wage bill in the month of January 2020, ends up with a wage compensation of minus 7.02% of the original wage compensation.
If, during the period for which your company claims the subsidy, you nevertheless apply for and grant a dismissal for economic reasons, 150% of the salary of the employee who was dismissed will be deducted from the wage bill for the calculation of the NOW subsidy. Your company is therefore expected to face a recovery.
If you come to the decision to apply for the subsidy, you will need to submit the application for it at a special online office of the UWV. When you apply, you must state the expected drop in turnover. Depending on your company's situation, you can choose over which period you calculate this expected decline in turnover: March-April-May, April-May-June, or May-June-July 2020. This way, you can estimate when you expect the biggest drop in turnover, and receive the subsidy for those months accordingly. Our specialists can guide you through the application process and answer your questions. Below, our infographic shows the NOW application process.
If your application is granted, the UWV will pay an 80% advance to your company in three instalments. It may also happen that your application is rejected because your application does not meet the requirements of the NOW scheme. This may be the case, for example, if your company has not or not sufficiently made it plausible that there is a drop in turnover of at least 20%. It may also be the case that wage data are not present in the UWV's policy administration. Action can be taken against this.
After granting the subsidy, the UWV may also reclaim part of the advance. The reason for this is that only after the advance has been granted can the UWV determine whether you have met all the conditions and what your company's turnover loss actually is. Action can also be taken against this.
In both cases, our specialists from the Real Estate & Government section will be happy to advise you on the legal possibilities.
In either case, you can take legal action. We can object or appeal on behalf of your company if you disagree with the UWV's (partial) rejection or recovery. It is important that this is done in a timely manner and that all legal arguments are well presented.
The first step will be to advise your business on the feasibility of the objection or appeal. If your company has a defensible case, we can then draft a notice of objection against the rejection or recovery decision, stating the reasons why the UWV's decision is unlawful. Following this objection, the UWV will make a decision on the objection.
Should the UWV declare the objection unfounded and reject the application again or reclaim the subsidy, the next step is to lodge an appeal with the administrative court. If your company wins the case, the starting point is that your company will also receive compensation for legal costs.
In case the rejection or recovery turns out to be unlawful, there are also possibilities for your company to obtain damages. Our specialists from the Real Estate & Government section will be happy to advise you on the possibilities and assist you in collecting these damages.
Should objection and appeal not be realistic, or if your company is ruled against, there are other solutions. You can think of a reorganisation with collective dismissal, for example. Our specialists of the Labour & Organisation section will be happy to discuss the possibilities with you.
For restructuring, our Turn Around Consultants can assess your situation and the specific challenges and opportunities. You can then decide whether you want to increase your insight with a Quick Scan, so that you can make an adequate plan of action for your organisation. Together with a multidisciplinary team, they ensure that you remain in control. They support you in gaining (financial) insight, sufficient liquidity and implementing emergency measures. They do this via a single point of contact, so that it remains manageable for you.
No two situations are the same and therefore no standard assessment is possible. Your company faces a strategic choice whether or not to apply for the NOW grant. In doing so, we like to add value in our own way by advising not only legally but also strategically. If you have questions about the application itself or if your company is faced with a rejection or recovery decision, please feel free to contact us. Through close cooperation between our sections, we can assess for you whether lodging an objection or appeal has a chance of success. To unburden your company as much as possible, we can also take care of the objection and appeal case in its entirety and collect any damages. Is this not possible? Then there are usually other options, such as reorganisation and restructuring. Together with you, we will work on a solution by taking legal steps, so that your company will be proved right in these turbulent times and you can focus on the recovery and growth of your business.
Today, Marxman set up the NOW team. This is where you can go to get the issues raised in the above article answered: customisation at a fixed price.