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Short-time Work in Germany to Avoid Layoffs

Jun 30, 20 • Employment LawNo Comments

Short-time Work in Germany to Avoid LayoffsThe corona crisis has shown that external circumstances can lead to considerable productivity losses for companies. As the employment opportunities for employees in affected companies are temporarily lost, the German legislator has created the possibility of short-time work.

What is short-time work?

Short-time work reduces the agreed work performance. Working hours can be reduced to zero either for only a few hours per week or for several days of the week, or even completely. In this case, the employer only has to pay the wage for the time the employee works. For the time that is not worked due to short-time work, the employee is entitled to so-called short-time work compensation, which is paid by the German Federal Employment Agency.

The employee receives between 60 and 67 percent of his or her last net wage as short-time work compensation.

Under what conditions can short-time work be introduced?

The prerequisite is a considerable loss of work with loss of earnings, which is due to economic reasons or an unavoidable event, and which is temporary and unavoidable.

The following criteria must therefore be met before short-time work can be initiated:

  • Ten percent of the employees of a company must be affected by a loss of working hours.
  • At least one person in the company is subject to social security contributions and is in an employment relationship that has not been terminated.
  • Notification of short-time work must be made in writing to the Federal Employment Agency.
  • The works council must agree to the short-time work order or – if there is no works council – the employees concerned must agree. It is also possible that such consent was already given in the employment contract.

Duration and amount of the short-time working allowance

Short-time work can be applied for a period of twelve months. If, however, no short-time working allowance is applied for during this period for a duration of at least one month, the period is extended by this time. The short-time work months can therefore be interrupted by “normal” months. Before short-time work compensation can be applied for again, at least three months must have passed after the twelve-month period of entitlement.

WINHELLER supports you in all questions regarding short-time work

If you, as an employer, need assistance with the planned arrangement of short-time work in order to be legally protected, we will be happy to help you. We take care for you:

  • Checking whether and how short-time work benefits can be used in your organization or company
  • The correct involvement of employees (via individual agreement or company agreement with the works council)
  • Reporting to the authorities
  • The prompt objection if short-time work benefits are rejected

We would be happy to assist you as well. Please do not hesitate to contact us should you have any questions.

Continue reading:
Coronavirus: Applications For Aid Money And Short-Time Working in Germany Can Lead to Penalties!

Ellen Pusch

Ellen Pusch specializes in employment law and inheritance law at our Munich office. She drafts and optimizes employment agreements as well as specific types of termination agreements and assists with restructuring projects and M&A transactions (transfers of undertakings).

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