Employees of companies that make use of the wage subsidy should receive less salary. That is one of the options that the Central Planning Bureau offers in one report about the lessons from the NOW scheme, the scheme through which companies receive a subsidy to continue paying wages during the corona crisis.
If the salary of those employees is cut, people would be more likely to switch jobs, the thought is. Because the longer the corona crisis lasts, the more the question becomes: if a company makes so much less turnover for so long, wouldn’t it be better if the employees started working elsewhere? According to the CPB, there should be financial incentives for this.
70 percent continued payment
Currently, some 693,000 people are paid through the government wage subsidy. This is already far fewer than at the start of the corona crisis: in the months of March, April and May, some 2.6 million people were employed by this scheme. About 8 billion euros was transferred to companies for this.
These are people who work for companies that generate much less turnover due to the corona crisis. The company is reimbursed a percentage of the wage costs, depending on the size of the loss of turnover, and pays part of the salary itself. In this way the employee will continue to be paid 100 percent of the salary.
If you pay employees only 70 percent of their wages (the same as unemployment benefits), people would have an incentive to retrain and switch to a company that is still running well, says the CPB.
The research institute does have a side note: there are legal obstacles, also because employees will oppose such a wage sacrifice. “But as the maximum duration of the NOW is extended further, the importance of a wage sacrifice increases,” writes the CPB.
High demand for personnel
The goal of the NOW scheme, which according to the CPB will also be achieved, is to prevent people from being fired and to prevent unemployment from rising even more. But there are also disadvantages: it leads to employees being retained by companies that may have been permanently affected by the corona crisis, when they are actually needed in other sectors.
For example, the CPB suspects that the physical shops in the shopping street and passenger transport will feel the consequences permanently. In those cases, workers should not remain employed there for too long, but be retrained quickly.
Although unemployment has increased significantly since the start of the corona crisis, there is still a high demand for personnel in certain sectors. Benefits agency the UWV outside yesterday that many people are needed in ICT, education and healthcare, for example.
Retraining
According to the CPB, retraining is important in this respect: it allows people to be guided to a new job. It is important that the training courses that go with it can be part-time and be offered at flexible times, says the CPB. There could also be subsidies for employees who switch from a company that receives a wage subsidy to a company that is still growing.
In the coming weeks, until October 1, companies can still make use of the government’s support measures. On Budget Day, September 15, it will be announced whether there will be a third support package and what it will look like.
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