The short-time working allowance is paid by the German Federal Employment Agency (Bundesagentur für Arbeit) when the following conditions are met:
- Significant loss of work with loss of earnings
2. Operational requirements
3. Personal requirements
4. Notification to the Federal Employment Agency
1.1 Significant loss of work with loss of earnings
There must be an actual significant loss of work. Short-time work cannot be used to assist with purely financial losses.
- a) Economic reasons
- Loss of work due to lack of follow-up orders or postponement of the start of orders or lack of deliveries
- Assistance is not provided for things like planned reorganisation in production or loss of work that falls within the scope of customary operational risks.
- b) Unavoidable event
- Example: fire at plant
- Storm damage
- Measures ordered by the authorities
- Currently: consequences of coronavirus
- c) Unavoidable
- If the employer has taken every step that is reasonable in economic terms
- Employees cannot be given other duties within the business (cleaning up warehouses, etc.)
- d) Temporary
- It is foreseeable that a transition back to full work will be possible
- Support for permanent job cuts not possible
- e) Minimum requirements
- Based on the new rules, the economic situation must require that at least 10% of the company’s total working hours be suspended (previously 1/3 of working hours)
- The reductions may vary between departments and employees as long as they meet the company’s needs and a total of at least 10% of the employees in the company are affected by a loss of earnings of more than 10 % of their gross monthly salary.
1.2. Operational requirements
- All businesses that have at least one employee who is subject to payment of social insurance contributions
- In certain cases, the short-time working allowance may be approved for only certain departments within a business, for example for production, while other departments continue to do business as usual
1.3. Personal requirements
- The short-time working allowance is paid only if no notice of termination of the employee’s employment has been given and the employee’s employment has not been terminated by a termination agreement
- At the same time, employees must not be excluded from receiving the short-time working allowance due to factors such as illness
1.4. Notification to the Federal Employment Agency
Applications for the short-time working allowance must be submitted to the Federal Employment Agency either in writing or online (e-service) using the appropriate forms (download KUG 101 and download KUG 107).
Please note: The Employment Agency explicitly points out that the employer is required to notify the Employment Agency before ordering short-time work.
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