Effects of the Ukraine war Special rules for short-time work benefits to be extended

Short-time work benefits will continue to be paid if 10 percent of the employees of a company are affected by loss of work. The Federal Cabinet has decided to extend the respective special regulation by three months until 30 September. The background to this is the Ukraine war.

Short-time work benefits

The following applies until the end of September 2022: a company can apply for short-time work if at least 10 percent of the employees are affected by loss of work.

Photo: Alex Kraus/Bloomberg via Getty Images

The approval of the short-time work benefits regulation (Kurzarbeitergeldzugangsverordnung, KugZuV) means that the requirements for access to short-time work benefits will continue to be lowered. Specifically, this means that:

  • Short-time work benefits can continue to be paid if at least 10 percent of the employees of a company are affected by loss of work. Until the start of the coronavirus pandemic, the threshold had been a third.
  • In order to avoid short-time work, as before, employees should not have to accumulate hours owed to them before receiving short-time work benefits.

Disruptions in supply chains

Russia’s war of aggression against Ukraine threatens to intensify the disruptions to global supply chains that were caused by the pandemic. A lack of primary products can directly impair production in companies. Continuing to make short-time work benefits accessible will give companies confidence in planning.

“Short-time work has proven to be an effective instrument for securing jobs during the coronavirus pandemic,” said Federal Minister for Labour and Social Affairs Hubertus Heil. Extending the easing of access to short-time work benefits would ensure that employment relationships could be stabilised in the current volatile situation as well, he said. “We will observe the development of the situation very closely in the coming months.”

Pandemic-related special regulations to expire

The other pandemic-related special regulations regarding short-time work benefits, on the other hand, will expire as planned on 30 June 2022. This affects the higher benefit rates, the longer duration of benefits and the inclusion of contract work. This reflects the fact that the pandemic-based restrictions have now been largely lifted and the effects on the economy and the labour market have ceased. An exacerbation of the pandemic situation with another lockdown is not currently expected. Furthermore, the labour market is continuing to recover and is currently in a good position.