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Today the Dutch government provided details around the compensation scheme the Temporary Emergency Scheme for Work Retention Scheme (in Dutch: “Tijdelijke Noodmaatregel Overbrugging voor behoud van Werkgelegenheid” or abbreviated as: the “NOW”).

This scheme is one of the measures implemented in order to mitigate the magnitude of the financial consequences for employers and self-employed. The government announced an emergency package consisting of a number of schemes to ensure as much as possible that companies can continue to pay their employees, that forced redundancies are avoided and that self-employed are provided a financial bridge and, where possible, to preserve liquidity through relaxed tax regimes, compensation and additional credit opportunities.

For employers, the details of the NOW scheme under which they can be eligible to receive compensation for wage costs, such as the specific wage components that are compensated for under the scheme, have now been published. Additional details regarding the conditions to receive income support and business credit for self-employed have also been shared last week.

In this Employment Update we provide you with an overview of the details of the NOW scheme shared by the government today. We also want to share with you that, throughout the last couple of weeks, we have gained significant insight and expertise within our global Baker McKenzie network about the government measures and other measures employers can take to counter-act the COVID-19 crisis. We have developed a number of work products on this topic, not only relating to the Netherlands but to several countries globally. For instance, a tool providing insight at one glance about country-specific rules on, amongst others, whether employees can be forced to take holiday or other leave of absence, suspending employment, et cetera. If these are questions within your company or if you are interested in this tool, please feel free to reach out. We are happy to be of assistance in these challenging times.

Please also be referred to the Baker McKenzie COVID-19 Resource Center available via Coronavirus Resource Center.

Please find below a non-exhaustive summary of the main details of the NOW.

What does the NOW entail?

The NOW replaces the working time reduction scheme (in Dutch: “Werktijdverkorting”), as this scheme was not tailored to the far-reaching consequences of the corona outbreak for Dutch companies and organisations.

Under the NOW, employers continue to pay the employees’ salary for 100%, while receiving a substantial compensation towards the wage costs of up to 90% of the wage sum (up to a certain maximum) from the Dutch Labour Authority (in Dutch abbreviated as: the “UWV”). The compensation applies with respect to employees with a permanent and flexible contract, such as on-call workers.

What are the eligibility criteria in order to qualify for the NOW?

In order to qualify for the NOW compensation, the employer must demonstrate that it expects at least 20% loss of turnover for a consecutive period of three months, which is calculated as of 1 March, 1 April or 1 May 2020 and compared to the turnover over the full year of 2019 (divided by four).

During the time that the compensation is granted, the employer:

  • is expected to make every effort to keep the wage sum as equal as possible;
  • may not request permission from the UWV to give notice of termination of employment contracts due to business economic reasons in the period between 18 March and 31 May 2020;
  • is obliged to use the compensation only and in full for payment of any wage costs due;
  • is obliged to inform the works council, employee representative body or the employees in the absence of such body, that compensation has been granted.

For how long does the NOW compensation apply?

The compensation is applicable for a period of three months. After this period, a one-off extension of another three months can be requested.

What is the amount of compensation?

This depends on the percentage of loss in turnover, but in any event does not exceed 90% of the wage sum for the three-month period from March 2020 to May 2020. For instance:

  • in case of a loss in turnover of 100%, the compensation amounts to 90% of the employer’s wage sum;
  • in case of a loss in turnover of 50%, the compensation amounts to 45% of the employer’s wage sum;
  • in case of a loss in turnover of 25%, the compensation amounts to 22.5% of the employer’s wage sum.

The “wage sum” consists of the wages on the basis of which the employee insurance contributions are paid, with a maximum of EUR 9,538 gross per month per employee. For calculating purposes, the UWV will, as much as possible, use the wage sum for January 2020. The wages of all employees employed by the applicant in that month count towards this sum. Hired workers (such as payroll and temporary workers) do not count towards the company’s wage sum.

Additional charges and costs that are not part of the wage sum, such as employer contributions and employee contributions to pension and the accrual of holiday allowance are also eligible for compensation. In order to speed up the application process, a surcharge of 30% for employer charges will be added to the wage sum.

Directors and major stakeholders (in Dutch abbreviated as: DGA’s) do not fall under the scope of the NOW.

How is the loss in turnover calculated?

Employers can apply for compensation of the wage sum in March, April and May in connection with an expected loss in turnover of more than 20%. If the employer expects that the effect of the COVID-19 crisis will only be visible in the company’s turnover with a certain delay, it is possible to request that the period for the turnover comparison starts one or two months later. The turnover comparison can however only start on 1 March, 1 April or 1 May. The expected turnover in the three months of the chosen period is then compared to the total turnover of 2019, which is then divided by four, so that both figures show a turnover over a three-month period. Based on this, the loss in turnover is calculated as a percentage.

If the company forms part of a group of companies then the entire group of companies will be taken into account in order to determine the loss in turnover. Section 2:24a and 2:24b of the Dutch Civil Code come into play in this respect.

The UWV will provide an advance payment equal to 80% of the expected compensation. The actual loss in turnover will only be determined in retrospect. The final determination of the compensation, after the end of the compensation period, compares the wage sum of January 2020 with the wage sum of the months March 2020 up to and including May 2020. If the wage sum has decreased, the compensation will also be lower.

How can I apply for the NOW?

Employers will have until 31 May 2020 to apply for the NOW by completing a form on the website of the UWV. It is not possibly to apply for the NOW just yet, but the UWV aims at having the application form available on their website as from 6 April 2020.

The UWV aims at making the first advance payment within three to four weeks after submission of the application.

It is highly likely that the NOW application can only be submitted in Dutch, so if you need any help with the application process please let us know.

What is the difference between the NOW and the compensation for self-employed entrepreneurs?

Another measure that is part of the government’s emergency package is the Temporary Scheme for Self-employed Entrepreneurs (in Dutch: “Tijdelijke Overbruggingsregeling Zelfstandige Ondernemers” or abbreviated as “Tozo“). This only applies to self-employed entrepreneurs. With the Tozo, self-employed entrepreneurs can receive income support with a maximum of EUR 1,500 euros net per month, for a period of three months. Due to the current exceptional circumstances of the COVID-19 crisis, this provision has temporarily flexible conditions: for example, the income support for maintenance does not have to be repaid in a later stage. In addition, a working capital loan of up to EUR 10,157 at 2% interest can be applied for.


Mirjam de Blécourt has been repeatedly recognized by top legal directories as one of the leading labor and employment lawyers in Europe and the Netherlands. She leads Baker McKenzie’s Amsterdam Employment and Pensions Law practice group and is member of the Firm's European Employment Group Steering Committee. Furthermore Mirjam is a former board member of Baker McKenzie's Amsterdam office. Mirjam has always been very active in the diversity and inclusion sphere, both outside and inside Baker McKenzie. She currently serves as chair of the supervisory board for Rutgers (international centre of expertise on (women’s) health and rights). Additionally she serves as senator of VVD (People's Party for Freedom and Democracy) in the Dutch Senate. Mirjam joined Baker McKenzie in 1990 and has been a partner since 1999.


Remke Scheepstra joined Baker McKenzie as an associate in 2000, and has since been part of the Firm’s Amsterdam Labor Law practice group. She is also a member of the firm’s European Labor Practice Group. She has authored or co-authored several articles on labor and privacy issues.


Danielle advises multinationals and provides services across the entire spectrum of employment and employee participation law. Danielle has a strong winning track record in the field of employment litigation and won several significant court cases for multinational clients. Most recently, she assisted a multinational in a court case in which the employee submitted a claim to the court of approximately EUR 400,000. The court rejected the claim and in the ruling specifically pointed out the extensive and thorough defense.