COVID-19 & short-time work

Changes to short-time allowance – referred to as “Kurzarbeitergeld” (or “KUG” for short) – were the first support measures introduced by the legislature to address the crisis surrounding the coronavirus. The necessary legislative amendments were passed by Germany’s lower house of parliament, the Bundestag, on March 13, 2020.

Employers seeking to report or introduce reduced working hours can expect as a result of the coronavirus pandemic a business-friendly decision-making process in dealing with their employment office. The purpose of the business measure must be to ensure the survival of the company and preserve jobs. Short-time allowance can be claimed for up to 12 months.

An employer is entitled to claim KUG if at least 10 percent of workers suffer a more than 10 percent loss of wages. Social security contributions for lost working hours are reimbursed in full. We at the commercial law firm MTR Rechtsanwälte note that companies with agreements on working time fluctuations will not be required to establish negative working-time accounts.

Temporary workers can also work on a short-time basis. The other prerequisites for claiming KUG continue to apply.

Certain basic requirements must be present

  • A significant loss of work together with a loss of wages
  • Operational requirements are met
  • Personal requirements are met (i.e. requirements pertaining to the workers)
  • The local employment office at the place of business must be notified of the loss of work

The loss of work must be temporary and unavoidable.

The legal basis for this is section 99 of part 3 of the German Social Security Code (Sozialgesetzbuch, SGB). It provides as follows:

A loss of work must be notified in writing to the local employment office at the place of business during the month in which short-time work is introduced. A meaningful statement explaining the loss of work is required.

Lawyers with experience in the fields of labor and employment law can offer advice.

More information about the crisis surrounding the coronavirus is available here!

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