Extension of regulations on short-time work

The German government intends to extend most of the special arrangements for short-time working benefits created in the wake of the Corona crisis until the end of 2021.

Compared with other European countries, Germany has so far been quite successful in cushioning the shock effect of the Corona crisis on the labor market with its special temporary arrangements for short-time working. After short-time work reached a peak of six million employees on short-time in April 2020, the loss of work is slowly decreasing again. However, the proportion of employees on short-time working is still significantly higher than at the height of the financial crisis in 2008 and 2009, and the German government estimates that it will take until 2022 before the level seen before the outbreak of the pandemic is reached again. However, the special arrangements introduced for short-time allowances would expire as early as December 31, 2020.

The governing coalition has therefore decided on follow-up regulations for short-time allowance from January 2021, which will be implemented with the "Act to safeguard employment as a result of the COVID 19 pandemic" and two ordinances. This is intended to build an employment-securing bridge for companies and employees into 2022 and give them planning security. At the same time, the special regulations are to be phased out in stages due to the enormous financial impact. In addition, the incentive to use periods of lost working time for vocational training will be further strengthened by simplification. The following measures are envisaged in the standards now adopted:

• Reference period: The period of entitlement to short-time allowance will be extended to up to 24 months for companies that have started short-time work by December 31, 2020, but no longer than December 31, 2021.

• Facilitations: The access relief (minimum requirements, negative working time balances) for short-time work will be extended until December 31, 2021 for companies that have started short-time work by March 31, 2021.

• Temporary workers: The opening of the Kug for temporary workers will be extended until December 31, 2021 for rental companies that have started short-time work by March 31, 2021.

• SV contributions: Full reimbursement of social security contributions during short-time work will continue until June 30, 2021. From July 1, 2021 to December 31, 2021, social security contributions will be reimbursed at 50 % if short-time work was started by June 30, 2021.

• Kug increase: The increase in Kug (to 70/77 % from the fourth month and 80/87 % from the seventh month) is extended until December 31, 2021 for all employees whose entitlement to Kug arose by March 31, 2021.

• Additional earnings: The existing temporary regulations on additional earnings will be extended until December 31, 2021 to the extent that remuneration from a mini-job taken up during short-time working will not be offset.

• Continuing education: The incentive to use periods of absence from work for professional training is further strengthened by the fact that half of the reimbursement of social security contributions is no longer linked to the fact that the qualification must amount to at least 50 % of the period of absence from work.