In times of the coronavirus, the issue of short-time work has significantly gained in importance again, as the introduction of short-time work offers employers the opportunity - as in times of the economic crisis in 2008/2009 - to cushion economically difficult times in the short term. With the following guide, we would therefore like to give you a brief overview of the main regulations and requirements for applying for short-time working allowance. In March 2020, the legislator introduced new legal regulations in this respect. In detail:
The first requirement is a considerable loss of working hours with loss of pay. The loss of working hours must be due to economic reasons or an inevitable event. Economic reasons are all those that can be directly or indirectly attributed to economic development, e.g. a decline in sales figures. An economic reason is also, for example, the cancellation of events, lack of orders or a lack of raw materials for production due to an epidemic. An inevitable event can be an accident, epidemics, fires, explosions, etc. This applies in particular to the illness of employees due to the epidemic, which results in a (partial) standstill of the company, as well as to quarantines or activity bans imposed by the authorities due to the epidemic, which result in loss of work.
The loss of working hours must also be of limited duration. There must therefore be some probability that the transition to full-time work can be expected again in the foreseeable future. In addition, the loss of workinghours must be unavoidable. High standards are set for the condition of inevitability, so that inevitability only exists if the employer has taken all reasonable precautions to prevent the loss of work. It is therefore not inevitable, for example, if the employer can prevent short-time work by granting leave or reducing overtime.
In principle, the granting of leave may also be considered in order to prevent the loss of working hours. However, the employer cannot be demandedto instruct employees when to
commence the leave in order to avoid short-time work against the holiday wishes of the employees. The priority is to first of all reduce remaining holiday entitlements from the previous year and any accrued days off in lieu. In addition, however, the holiday for the current calendar year must also have been granted at least in part before it can be assumed that the loss of working hours is inevitable.
In March 2020, with retroactive effect from 1 March 2020, the legislator enacted new legislation to simplify the introduction of short-time work against the background of the corona crisis (Ordinance on relaxing the conditions for short-time working allowance - Verordnung über Erleichterungen der Kurzarbeit, KugV, of 25 March 2020, Federal Law Gazette (BGBl.) I p. 595 (No. 14)).
As part of the legal amendments, the requirement to build up negative working hours balances before payment of the short-time working allowance is waived.
Finally, the loss of working hours must reach a certain minimum level. To this end, the legislator has also reduced the proportion of employees who must be affected by the loss of working hours with retroactive effect from 1 March 2020 in order to facilitate this. Instead of the previous one third, only 10% of the employees in the company or part of the company must now be affected by lost working hours. Employees affected by the loss of working hours must also be subject to a loss of earnings amounting to more than 10% of their gross monthly income.
Short-time working allowance is granted regardless of the size and legal form of a company, provided that at least one employee is employed. A company within the meaning of the regulations on short-time working allowance is also a company department.
During the period of short-time work, the employee must continue his or heremployment
subject to compulsory insurance or has to take up an employment subject to compulsory
insurance for compelling reasons. The condition of continuing an activity subject to compulsory
insurance is no longer met if the employment relationship has already been terminated by the employer or the employee or is terminated by a termination agreement. If the employment relationship is terminated while the employee is receiving short-time working allowance or if a termination agreement is concluded, the entitlement to short-time working allowance is forfeited due to the fact that the employee is no longer in an employment relationship subject to mandatory social insurance. An employee takes up work for compelling reasons if he or she only starts work in the company after the loss of working hours - and thus would not actually be entitled to any short-time working allowance - but his or her employment is necessary, for example, for special company interests. This may be the case in particular if the employee in question is a skilled worker who is urgently needed in the company. According to the new law, temporary worker may now also
receive short-time working allowance.
Marginally employed persons (geringfügig Beschäftigte) within the meaning of Section 8 of the German Social Code - Book IV (SGB IV) do not meet the personal requirements for receiving any short-time working allowance. The same applies in principle to trainees. In the case of trainees, all means must be exhausted to ensure that the training continues, for example by changing the curriculum or transferring to another department.
The employer must notify the Federal Employment Agency of the introduction of short-time work in writing or electronically. There are forms available from the Federal Employment Agency for the notification, which must be submitted to the Employment Agency in whose district the company or part of the company affected by short-time work is located.
The existence of a considerable loss of working hours and the operational requirements for the short-time working allowance must be substantiated (e.g. by means of information on the order situation and submission of the individual agreements on the introduction of short-time work).
Notification of short-time work as early as possible is advisable because, pursuant to Section 99 (2) SGB III, short-time working allowance is paid at the earliest from the month in which the notification of the loss of work is received by the Federal Employment Agency. The Federal Employment Agency always pays out the short-time working allowance retroactively, even if no decision has yet been made on the application.
The Federal Employment Agency must decide on the existence of the aforementioned conditions without delay and issue a written decision.
After the decision of the Federal Employment Agency on whether the conditions for granting short-time working allowance have been met, in a second step the application for short-time working allowance must be submitted for each individual employee. The application must be submitted in writing for the entitlement period (calendar month) to the Federal Employment Agency in whose district the payroll accounting department responsible for the company is located. Sending the application by fax or e-mail is sufficient. Only the employer, not the individual employees
themselves, is entitled to apply.
The application must be filed within a period of three months. The period begins at the end of the calendar month in which short-time work occurred. It should be noted that if the application is submitted after the three-month deadline, allowances will not be granted regardless of the reasons for missing the deadline.
The statutory subscription period for short-time working allowance is currently twelve months. If there are exceptional circumstances on the labour market, the subscription period may be extended to up to 24 months by decree.
The amount of the short-time working allowance is based on the flat-rate net remuneration difference. Employees with at least one dependent child receive 67% of the net pay difference, all other employees 60%. The net remuneration difference is calculated as the difference between the
flat-rate net remuneration from the "planned remuneration" and the flat-rate net remuneration from the "actual remuneration". The planned remuneration is the gross monthly remuneration that the employee would receive without short-time work. Actual remuneration is the gross remuneration actually earned by the employee during the entitlement period. If work is reduced to zero during short-time work, the short-time working allowance is therefore equivalent to the maximum amount of unemployment benefit. The short-time working allowance is tax-free.
The short-time working allowance is subject to statutory health, pension and social nursing care insurance, as is the actual remuneration received. While the employer and employee pay half of the contributions for the remuneration actually earned, the employer is generally solely responsible for the contribution shares attributable to the short-time working allowance.
Under the new law, the employer will be reimbursed by the Federal Employment Agency in the form of a lump sum payment for the social security contributions for working hours lost up to 31 December 2020 which are to be borne by him alone, upon application The lump sum is based on the social insurance lump sum less the amount for employment promotion. Whether this will lead to full reimbursement of the social security contributions to be borne by the employer, as currently announced on the website of the Federal Ministry of Labour and Social Affairs (as at: 2 April 2020), is still unclear.
Finally, the employer is obliged to calculate and pay the short-time working allowance. The
short-time working allowance is paid retroactively for the period for which it was applied for. The employer is not obliged to advance the short-time working allowance. However, the employer is obliged to pass on the short-time working allowance to the employees without delay.
It is not possible for the employer to introduce short-time work by unilateral decision. Rather, an appropriate legal basis is needed for its introduction. This may result from a collective bargaining agreement, a company agreement or an agreement with the employee.