Easier access to short-time work allowance

Cabinet decision Easier access to short-time work allowance

The spread of the coronavirus is a major challenge for the economy and the labour market. To address this effectively, the German government has adopted a bill that will facilitate access to short-time work allowance.

Federal Economic Affairs Minister Peter Altmaier and Federal Labour Minister Hubertus Heil at a press conference

Federal Economic Affairs Minister Peter Altmaier (at left) and Federal Labour Minister Hubertus Heil: The new act of parliament should come into effect in the first half of April

Photo: picture alliance/dpa

"Our goal is to ensure that, in this situation, as far as possible no job and no company sustains lasting damage," declared Federal Labour Minister Hubertus Heil on Tuesday at a press conference with Federal Economic Affairs Minister Peter Altmaier. That is why the government is taking swift, unbureaucratic action. It is to be made easier to obtain short-time work allowance, thus going some way to create security, said Hubertus Heil.

Federal Minister for Economic Affairs Peter Altmaier explained, "We are translating into practice the resolution of the coalition committee and the entire government." The goal is to save jobs and companies and retain competitiveness.

Short-time work allowance – benefits extended

In detail the new legislation provides for the following:

  • 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.

Because the new legislation is to be introduced to the two chambers of the German parliament, the Bundestag and the Bundesrat, using the fast-track procedure, Federal Labour Minister Hubertus Heil expects that it will come into force in the first half of April. From then the regulations will initially apply until the end of 2020.

Professional upgrading for tomorrow’s work

The bill also provides for new regulations in another area – professional upgrading. Increasing digitalisation of the working world and measures to combat climate change are going hand in hand with radical structural changes. Workers and employers are to be made fit for tomorrow’s working world. The Act to promote Advanced Professional Training in the face of Structural Change and to Develop Training Support (Gesetz zur Förderung der beruflichen Weiterbildung im Strukturwandel und zur Weiterentwicklung der Ausbildungsförderung) is to take the promotion tools used by labour market policy to the next level.

On the basis of the regulations laid out in the Professional Upgrading Opportunities Act (Qualifizierungschancengesetz) the promotion of advanced training for employees is to be further enhanced:

  • The application and approval procedure is to be simplified for employers and employees.
  • There are to be higher subsidies if a larger percentage of the employees in a company need advanced training.
  • If an employee is to take a professional qualification retrospectively there is to be a legal entitlement to support.
  • The regulations governing the payment of advanced training bonuses for passing interim and final examinations are to be extended to cover people starting occupation-relevant advanced training up to the end of 2023.

In future individuals registering in good time as job-seekers or as unemployed will be able to do so online.