Factsheet for case NL-2020-15/760 – Updated – measures in Netherlands
|Country||Netherlands , applies nationwide|
|Time period||Temporary, 05 April 2020 – 30 September 2021|
|Type||Legislations or other statutory regulations|
Employment protection and retention
– Income support for people in employment (e.g. short-time work)
|Author||Amber van der Graaf (Panteia) and Eurofound|
|Case created||21 April 2020 (updated 19 July 2021)|
Temporary Emergency Measure for the Preservation of Jobs is a financial aid programme for enterprises hit by the COVID-19.
This measure has been introduced as a bunch of emergency solutions specifically to combat or cushion the effects of the COVID-19 crisis. More specifically, this measure is aimed at taking over the wage costs so that enterprise do not get bankrupted and that employees get an income. This applies to workers with permanent as well as flexible or temporary contracts. The ultimate aim is to keep the economy functioning (including the financial flow) till the pandemic is under control.
This measure is part of the third package of emergency measures to deal with the corona virus. This was a package of several measures which have been taken to combat the COVID-19 and its effects announced and will be announced on 1 October 2020.
The current NOW 2.0 will be come to an end by the end of September 2020. Under the third package of emergency corona measures, the NOW will be extended in a third version, NOW 3.0, from 1 October 2020 to 31 June 2021. The rationale behind this extension is that the corona crisis and its impacts will be felt in Dutch society and industry for the foreseeable future. Therefore, the NOW 3.0 will run for longer than its forerunners, but will also offer more limited support.
The aim is to help enterprises to pay the salaries of their employees so that employment as well as business viability can be maintained as much as possible.
The period for the NOW 3.0 is divided into three slots of three months, where per slot, the eligibility criteria become more stringent. In the first three months an enterprise is eligible for support if their revenue has declined by 20%.In the second three month slot (as of 1 January 2021), enterprises are eligible if their revenue has declined by 30%. The proportion of revenue loss for the third slot is not yet known (as the third package of emergency measures has not yet been rolled out).The support which is provided under the NOW 3.0 will also gradually be reduced though it is not yet clear how.
Within NOW 1.0 and 2.0, the financial aid available for those enterprises which suffered a revenue loss of more than 20%. The government subsidised up to 90% of the wage costs of staff for a period of up to three months. Within NOW 3.0, during the first three months the maximum level of support is 80% of wage costs, 70% in the second slot, and 60% in the third slot of three months.
This applies to workers on permanent contracts as well as flexible contracts (including zero hour "nul uren" contracts, or on call contracts "oproep contracten"). However, in return enterprises may not fire anyone (fixed and flexible employment contracts alike), for economic reasons during the period of time covered by the allowance.
For NOW 1.0, for which data covers the period from 5 April to 5 July, 148,355 applications were received for financing, of which 139,399 were granted. This supported 2,653,041 workers at enterprises. For NOW 2.0, for which data covers the period of 6 July to 4 September, 65,129 applications were received and 63.088 granted. This helped to support 1,332,904 workers at enterprises.
A total of 81,000 employer’s have applied for subsidies in the fourth quarter of 2020 (NOW 3.0).
The NOW (Temporary emergency scheme for job retention) measure in practice There are nearly 140,000 companies that have used the NOW-1 measure. That is about 6.5 percent of all companies in the Netherlands. Especially companies with 10 to 50 employees make use of this measure. At sector level, the hospitality industry has by far made the most use of this measure. In this sector, 34 percent of the hospitality industry used the NOW-1 measure. Almost all of the hospitality companies with 10 or more employees made use of this measure (Bedrijvenbeleid in beeld, 2021)..
There are approximately 64,000 companies that have benefited from the NOW-2 scheme. That is about three percent of all companies in the Netherlands. Especially companies with 10 to 50 employees use the NOW-2, as was already the case with the NOW-1. At sector level, the hospitality industry makes the most use of this by far, just as with the NOW-1. In this sector, more than sixteen percent of the hospitality companies made use of the NOW-2 scheme (Bedrijvenbeleid in beeld, 2021).
There are approximately 78,000 companies that have used the NOW-3.1. That is about four percent of all companies in the Netherlands. Especially companies with 10 to 50 employees make use of this scheme, just as with the predecessors. The hospitality industry also makes the most use of this by far. In this sector, 28 percent of the catering companies used the NOW-3.1(Bedrijvenbeleid in beeld,2021).
NOW 3.2: On reference date 31 May 2021: almost 76,000 companies; 3.5% of all companies in the Netherlands and comparable to the use of NOW 3.1. Especially companies with 10 to 50 employees. By sector, mainly catering: 1 in 4 catering companies, of which almost all catering establishments employ more than 250 people.
NOW 3.3: Since 31 May 2021, the reference date for this monitoring, not all applications could be included yet. At that time there were almost 24,000 companies with a NOW 3.3. That is 1% of all companies in the Netherlands. It is also the catering companies that make the most use of this scheme.
Weakness of the measure The UWV, which implements the NOW scheme, deals with possible manipulation of the turnover and the wage bill. The benefits agency also receives reports of identity fraud. In 2020, the subsidy was (temporarily) discontinued in eleven cases (Financieel Dagblad, 2021a).
Last year, the Court of Audit warned that the design of the aid scheme could lead to errors and misuse. Without extensive checks, the UWV pays an advance of 80% based on estimated loss of turnover and only settles at a much later stage, based on definitive figures on turnover and wage bill. Companies then receive the remaining 10% of the subsidy, but if it turns out that the turnover was higher or the wage bill was lower than anticipated, they must return all or part of the money (Financieel Dagblad, 2021a).
The nearly €40 billion in aid that the government has pumped into the business community since March is surprisingly well-suited given its broad and rather 'blind' nature. That conclusion can at least be drawn from the first study into the effectiveness of corona support by economists at Rabobank and Utrecht University (Financieel Dagblad, 2021b).
According to some economists, the aid is a waste of money because it is scattered so widely that many unhealthy businesses can survive. They thus form a block to the rest of the economy. The researchers have not seen any of this so far, which is in line with the findings of research conducted in Denmark (Financieel Dagblad, 2021b).
|Does not apply to workers||Applies to all businesses||Does not apply to citizens|
Local / regional government
Public employment service
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|Form||Direct consultation outside a formal body||Direct consultation outside a formal body|
Social partners' role in the implementation, monitoring and assessment phase:
Since the outbreak of the Corona crisis, the government has had regular and close consultation with the social partners. Together the national level social partners and the government arrived at the first and second packages of emergency measures, announced 17 March and 20 May respectively. The social partners were deeply involved in the development of this measure, as they were with the entire third package of national emergency measures. Since the start of the corona outbreak, national peak level social partners indicate they have worked together very intensively and collaborated with the government to develop quick policy measures in response to the rapidly changing economic and social situation. Social partners have been meeting with the government on a weekly basis since March 2020. Some partners, such as the Association for Dutch Municipalities and Divosa (the association for municipality directors for social policy), have also remained strongly involved in the actual implementation of the policy measures, together with other public agencies and institutes such as the Tax Authority and especially, the Public Employment Service, the UWV.
(As with the other measures (and consequently, the other cases): Though not discussed in great detail, the social partners (national level trade unions and employer organisations), have come together to discuss with the government how best to tackle the effects of the corona virus on workers and employers so as to keep the Dutch economy going. In the Netherlands relevant, national sectoral social partners are often involved in national policy making in a consultational capacity so that partners may reflect on regulatory plans and their intended impacts. This happens in a direct consultation fashion or through tripartite meetings (facilitated by the National Labour Foundation). The social partners were consulted for the whole package of measures introduced by the Dutch cabinet on 17 March 2020.)
In connection with NOW 3.0, all social partners are generally supportive of the measures and happy that they are extended. VNO-NCW and MKB-Nederland are happy that employers will not be fined anymore for firing employees. In the initial policy proposal the compensation would be cutback after January 2021, the employer’s organisations were critical of this. They responded positively when the cabinet decided to amend the policies by removing the cutbacks.
Eurofound (2020), Temporary emergency measure for the preservation of jobs, case NL-2020-15/760 (measures in Netherlands), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch
Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.