Easier access to short-time work allowance

Labour market Easier access to short-time work allowance

The coronavirus pandemic is a major challenge for the economy and the labour market. To support employees and employers, a fast-track parliamentary procedure has put in place the legal basis to facilitate access to short-time work allowance. The Cabinet has also adopted the pertinent ordinance.

Industrial workers walk through a production hall.

Easier access - the new regulations for short-time work will support employees and businesses

Foto: Thomas Koehler/photothek.net

With the ordinance, the German government makes use of the authorisation laid out in the "Act to enhance the regulations governing short-time work allowance for a limited period as a result of the crisis" (Gesetz zur befristeten krisenbedingten Verbesserung der Regelungen für das Kurzarbeitergeld) in order to make it easier to obtain short-time work allowance. In this way jobs are to be saved during the coronavirus pandemic, and lay-offs avoided.

The following regulations apply retrospectively as of 1 March 2020, to facilitate access to short-time work allowance:

  • If a company sees orders decline as a result of difficult economic trends, it can announce short-time work, if a minimum of 10 per cent of its workforce could be affected by the lack of work. The limit has hitherto been 30 per cent of the workforce.
  • It is to be possible to dispense in full or in part with the requirement that negative working hours balances be established before short-time work allowance can be paid. The current legal situation means that companies that have agreements to deal with fluctuations in workload must also use these to avoid short-time work, meaning that workers’ working hour balances become negative.  
  • In future contract workers will also be eligible for short-time work allowance.
  • The social insurance contributions that employers must normally pay for their workforce will be fully reimbursed in future by the Federal Employment Agency. This is intended to create an incentive to use short-time work more for further training.

The ordinance makes full use of the authorisations laid out in the "Act to enhance the regulations governing short-time work allowance for a limited period as a result of the crisis" (Gesetz zur befristeten krisenbedingten Verbesserung der Regelungen für das Kurzarbeitergeld).