NOW under certain conditions also for individual operating companies
24/04/20
In the meantime, this article has been updated following the entry into force of the changes. For the updated article see here.
The government extends the Temporary Emergency Measure Bridging for Retention of Work (NOW) for groups of companies with less than 20% loss of turnover. Individual operating companies within these groups can, under certain conditions, apply for NOW on the basis of their own loss of turnover (which must be at least 20%).
Businesses have asked for amendment of the NOW on the part that the loss of turnover of the entire group is decisive. The government complies with this request because it will not always be possible to maintain employment when turnover loss is determined at group level.
The amendment to the NOW is expected to be published next week. We will update this article after that. As from the entry into force of the amendment, operating companies may submit an application to the UWV based.
What does this mean to you?
If the loss of turnover for your group as a whole is less than 20%, but independent entities within your group suffer a loss of turnover of 20% or more, these group entities may be entitled to NOW. This will be the case if you can meet the additional conditions for this particular possibility (see below).
With the publication of the amendment to the NOW, we expect a more detailed definition of the conditions that have been announced, for example with regard to the group's bonus and dividend policy, the definition of a staff company (‘personeels-bv’) and the additional audits.
Expansion NOW for groups of companies
It is made possible for individual operating companies to apply for NOW based on its own loss of turnover (at least 20%), if there is a loss of turnover of less than 20% within the group. Groups with a loss of turnover of at least 20%, can only make use of the main rule. This exception does not apply to them.
The following conditions apply to NOW on the basis of loss of turnover of the operating company:
- The operating company must have its own legal personality.
- Groups whose operating companies make use of the NOW must declare that they will not pay any dividends or bonuses for 2020 or repurchase their own shares until and including the date of the shareholders' meeting at which the annual accounts for 2020 are adopted.
- It is a condition that an operating company with 20 or more employees has an agreement with the interested associations of employees, and in the absence thereof another representation of employees, on the retention of employment.
- There is no staff company within the group. Groups with staff companies must always determine a loss of turnover at group level.
- Additional audits are required. These will be defined in more detail in the standards of accountants that are being developed. The additional conditions and safeguards are aimed at ensuring that personnel and turnover are not shifted between operating companies in order to maximise the subsidy.
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