The Short-time Work Facilitation Act aims to provide quick and targeted help to all those companies whose workload has dropped due to COVID-19. In this particular situation, companies will receive support to avoid redundancies and to get back on track immediately after the crisis. Employers must immediately inform the Agentur für Arbeit about the reduction in working hours, even if less than a third of the workers employed in the company are actually subject to loss of earnings. Temporary employment agencies can now also contact the officers of the Agentur für Arbeit informing them of the reduction in working hours.
The following conditions for the short-time working allowance will come into force retroactively from March 1st 2020:
- the short-time work allowance is possible for any company and its employees, including employees on fixed-term contracts;
- if at least 10% of employees are subject to a reduction in working hours, the company can apply to the Agentur für Arbeit on their behalf and apply for the redundancy fund advance (Kurzarbeit). Usually, at least one third of employees must be subject to it;
- the short-time work allowance amounts to 60% of the net salary for missing working hours, 67% for those who have children;
- in case of Kurzarbeit, social insurance contributions are fully reimbursed by the Agentur für Arbeit;
- employees must not have deficit hours before receiving the redundancy fund advance;
- if employees under short time work allowance work up to 50% less than before, the allowance will be increased to 70% (77% for families with children) from the fourth reference month (calculated from March 2020);
- from the seventh month of Kurzarbeit, the allowance for part-time work will rise to 80% (87% for families with children) of the net lost salary.
Expansion of additional earning opportunities during redundancy fund
Previously, the following applied: if you get a second job after being put into Kurzarbeit by the first one, the second salary is counted on the redundancy fund advance.
From May 1st 2020 to December 31st 2021, the following special regulation will apply: employees who are in Kurzarbeit may have a secondary income that mustn’t exceed the amount of their original income, so the second income will not be counted on the redundancy fund. In essence, the income of the two jobs must not exceed the level of income received before the Kurzarbeit.