In March and April 2020 as the Covid public health crisis developed, the German Bundestag (Parliament) introduced new legislation and a number of financial schemes to support employers and their workforces.
One of the most important measures taken to mitigate the effects of the Corona crisis in Germany is short-time work, especially since the Parliament has passed an amendment to the law on March 13, 2020 relaxing the conditions. Limited until 31 December 2020 only 10% of an operational unit or parts of an operational unit (instead of one third) must be affected by a loss of earnings amounting to more than 10 % of the monthly gross income. The requirement to make use of negative working balances and vacation (except the vacation from 2019) before applying for short-time work can be partially or completely waived by the Federal Employment Agency. The social security contributions are reimbursed by the Federal Employment Agency and also temporary workers are eligible for the short-time work.
Short-time work is the (partial or complete) reduction of working time with a corresponding reduction of remuneration. The reduced earnings of the employees are partly compensated by the short-time work compensation that is reimbursed to employers by the Federal Employment Agency provided that they followed the procedure laid down that is: ((i) introduction of short-time work (ii) notification of short-time work, (ii) pay out of the short-time work compensation and (iv) application for reimbursement of the short-time compensation.
The amount of the short-time compensation is based on the flat-rate net remuneration difference. Employees with at least one dependent child receive 67%, all other employees 60% of the net pay difference. On 14 May 2020, the Bundestag (German Parliament) passed a law that increases the percentages of short-time work compensation, provided that the regular remuneration is at least reduced by 50 %, as follows:
- Month 1-3: 60 % for employees without children and 67 % for employees with children
- Month 4-6: 70 % for employees without children and 77 % for employees with children
- From Month 7: 80 % for employees without children and 87 % for employees with children
The Federal Employment Agency announced that as of 26 April 2020 companies in Germany registered short-time work for 10.1 million people, which is the highest level in history.
From lockdown to return to work
As lockdown restrictions eased in Germany, employers are adjusting to the "new normal".
Because of the German federal system in each federal state different regulations apply for different kind of businesses that are changing on a weekly basis so that companies have to adjust to the current developments quickly.
The overarching scheme, however, is having and maintaining a health & safety concept that ensures the social distancing and infection prevention rules.
This may include ensuring social distancing at the workplace, health checks and hygiene measures as well as re-configurations of the workplace and working from home and in shifts.
Continued risk assessments and compliance with the current legislation's are essential.
To support employers with their return to work planning, we have prepared a step by step guide on the key measures and employment checklist.
Please see our Germany employment checklist for a step by step guide on the key measures to consider >
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