Gov't to cover up to 90% of wages for companies hit by Covid-19, but not for highest earners

Wouter Koolmees (Picture: Wikimedia Commons/Pepijn Leupen) D66Wouter Koolmees (Picture: Wikimedia Commons/Pepijn Leupen)

The government will cover up to 90 percent of wages for companies that lost at least 20 percent of turnover due to the coronavirus over a period of three months, Minister Wouter Koolmees of Economic Affairs and Employment announced on Tuesday. This measure, intended to preserve employment, applies to wages up to 9,538 euros per month per employee, NOS reports.

The temporary emergency bridging measure for the preservation of employment (NOW) will likely take effect next week. It exists alongside the working hour reduction regulation, also known as the part-time unemployment scheme, which already existed. "This scheme is intended for all employees," Koolmees said. "Also flexible workers."

The NOW is intended for companies put in serious financial trouble due to the coronavirus and measures to curb it. The government wants these companies to be able to keep paying their staff, in order to prevent  large-scale unemployment. The measure can cost up to 20 billion euros over a three-month period, Koolmees said. "This is an exceptional, substantial measure. But it is urgently needed in these exceptional times."

Koolmees said he kept the scheme relatively simple, without many exceptions, so that it can be implemented quickly. He expects that the majority of affected companies will be able to make use of the scheme.

Companies that can demonstrate they lost at least 20 percent turnover in three months' time due to the coronavirus, can apply for this scheme. The government will then cover up to 90 percent of the wage bill for employees paid less than 9,538 euros per month, depending on the turnover lost. If the company lost 100 percent turnover, 90 percent of the wage bill will be covered. If the company lost 50 percent turnover, the government will cover 45 percent of the wage bill, for example. The company must continue to pay their employees' regular salary. 

Benefits agency UWV aims to be ready to start processing applications for this scheme from Monday. The agency expects thousands of applications, UWV chairman Fred Paling said. Once the application is submitted, it will take two to three weeks before the employer receives the money. Paling called on entrepreneurs who submit an application to be fair and honest. "As an employer, you have to have particularly bad intentions if you want to take advantage of this," he said. "I also make a moral appeal to the Netherlands to make good use of this."

Koolmees also called on employers' moral code. "I appeal to everyone's moral responsibility not to commit fraud. The cabinet counts on the good will of everyone."