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Legal Advice

Corona crisis: practical questions on the introduction of short-time work

As a result of the corona crisis, the workload of employees in numerous companies has dropped significantly. In order to avoid a reduction in personnel, a simplified application of short-timework allowance has been established, with retroactive effect from March 1, 2020.

This is asso­cia­ted with nume­rous open ques­ti­ons - for emp­loy­ers and emp­loyees alike. You will find ans­wers to the most important ques­ti­ons in our FAQ.

What types of short-time work do exist?

Short-time work means the tem­porary reduc­tion of wor­king hours.

Exam­p­les:

  • Zero wor­king hours = reduc­tion of wee­kly wor­king hours to zero.
  • Wor­king hours redu­ced to 50 %: = reduc­tion of wee­kly wor­king hours by 50 %. The emp­loyee is only assig­ned 50 % of his or her regu­lar wor­king hours, since there is no hig­her demand.
  • For a tem­porary inc­rease in the short-time wor­king allo­wance from the fourth or seventh month, see here.

When, to what amo­unt and from whom do emp­loyees receive short-time allo­wance?

Short-time work allo­wance is paid by the emp­loyer to the emp­loyees at the end of the month.

  • „In the case of zero wor­king hours, emp­loyees who have at least one child receive 67 % of their net remu­n­e­ra­tion (= nomi­nal remu­n­e­ra­tion) and all other emp­loyees 60 % of their net remu­n­e­ra­tion. If col­lec­tive bar­gai­ning agree­ments pro­vide for sup­p­le­ments to short-time work allo­wan­ces, these must be gran­ted in addi­tion. Emp­loy­ers may also make addi­tio­nal finan­cial con­tri­bu­ti­ons on a vol­un­tary basis; the gene­ral prin­ciple of equal tre­at­ment must be ensu­red.
  • In the event of short-time work > zero, emp­loyees will receive salary and social secu­rity con­tri­bu­ti­ons only at the per­cen­tage rate at which they work. With short-time work redu­ced to 50 %, for example, the emp­loyer only has to pay half of the salary (plus cor­res­pon­ding non-wage labour costs) directly. In addi­tion to the emp­loyer's con­tri­bu­tion, the emp­loyee also recei­ves a “short-time work allo­wance”. The dif­fe­rence bet­ween the actual net remu­n­e­ra­tion after redu­ced wor­king hours and the net remu­n­e­ra­tion for regu­lar wor­king hours forms the basis of the cal­cu­la­tion and amo­unts to 60 % (and 67 % respec­ti­vely for emp­loyees with child­ren) of the in-come loss.

Are emp­loyees allo­wed to take on a second job during a period of short-time work?

In prin­ciple, emp­loyees may pur­sue a second job during short-time work, but it should be noted that a second job that was taken up after the start of short-time work redu­ces the entit­le­ment to short-time work allo­wance.

Example: The nomi­nal remu­n­e­ra­tion is EUR 2,000, the actual remu­n­e­ra­tion due to redu­ced wor­king hours is EUR 0. Thus, the entit­le­ment to short-time allo­wance would amo­unt to 60 % or 67 % of EUR 2,000. If the emp­loyee howe­ver accepts a part-time job during the short-time work phase, the ear­nings from it will reduce the dif­fe­rence bet­ween the nomi­nal and actual remu­n­e­ra­tion, and the­re­fore also the amo­unt of the short-time work allo­wance. 

Important: No cre­di­ting of the secon­dary emp­loy­ment against the short-time work allo­wance takes place if emp­loyees are emp­loyed as sea­so­nal wor­kers in agri­cul­ture during the short-time work phase or if the secon­dary emp­loy­ment was already taken up before the start of short-time work.

What hap­pens to leave of absence that has already been appro­ved and which now falls into the period of short-time work?

Emp­loyees can still take already appro­ved leave holi­days. The emp­loyer can­not with­draw the leave of absence that has already been appro­ved. For the dura­tion of the leave of absence, the emp­loyee does not receive short-time work allo­wance despite short-time work but recei­ves full holi­day pay.

Is the holi­day entit­le­ment redu­ced in times of short-time work?

(e.g. 4 weeks short-time work allo­wance - 2.5 days holi­day entit­le­ment)

If short-time work is orde­red to be redu­ced to zero, a cor­res­pon­ding reduc­tion of the holi­day entit­le­ment is basi­cally per­mis­si­ble. Col­lec­tive agree­ments may con­tain dif­fe­rent regu­la­ti­ons.

What is the situa­tion regar­ding fixed-term con­tracts or emp­loyees in their work trial period?

Emp­loyees with fixed-term emp­loy­ment con­tracts and emp­loyees on trial periods are also entit­led to short-time work bene­fits. 

How is the situa­tion regar­ding the mar­gi­nally emp­loyed to be asses­sed?

The mar­gi­nally emp­loyed are not entit­led to short-time work com­pen­sa­tion. There are two opti­ons here (in addi­tion to paid leave):

  • Con­clu­sion by mutual agree­ment of a sup­p­le­men­tary agree­ment sus­pen­ding the emp­loy­ment rela­ti­onship (unpaid leave).
  • Arran­ge­ment of the build-up of minus hours.

Why do emp­loyees first have to take their remai­ning leave from 2019?

Pre­re­qui­site for clai­ming short-time work allo­wance is that emp­loyees first take their remai­ning vaca­tion from 2019.

Is it legally pos­si­ble to order a com­pany shut­down?

In com­pa­nies with a works coun­cil, a works coun­cil agree­ment can be used to intro­duce a com­pany shut­down. Howe­ver, spe­cial notice periods must be obser­ved. In addi­tion, at least 2/5 of the annual leave must remain at the emp­loyees' free dis­po­sal. In com­pa­nies wit­hout a works coun­cil, cor­res­pon­ding agree­ments must be con­clu­ded indi­vi­dually with the emp­loyees.

Can the dura­tion of short-time work also be redu­ced if - con­trary to expec­ta­ti­ons - the situa­tion chan­ges for the bet­ter?

Yes, the dura­tion of short-time work can also be redu­ced again ahead of sche­dule, pro­vi­ded that the notice periods agreed in the works agree­ment or the indi­vi­dual sup­p­le­men­tary agree­ments are obser­ved. Any noti­fi­ca­tion of a lon­ger period of short-time work that has already been given to the emp­loy­ment agency can also be modi­fied at any time when the app­li­ca­tion for short-time work allo­wance is sub­mit­ted.

How is the short-time allo­wance been cal­cu­la­ted?

From time to time the net salary fluc­tua­tes due to various rea­sons.

The basis for cal­cu­la­ting the short-time work allo­wance is the "lump sum net remu­n­e­ra­tion". The cal­cu­la­tion of this lump-sum net remu­n­e­ra­tion is a purely arith­meti­cal pro­ce­dure, in which three values are deduc­ted from the gross remu­n­e­ra­tion spe­ci­fied in the emp­loy­ment con­tract:

  • Social secu­rity flat rate of 20 %
  • Income tax
  • Soli­da­rity surch­arge

Why are several months of short-time work being intro­du­ced, even though the situa­tion may have impro­ved sig­ni­fi­cantly by the end of April?

Com­pa­nies can apply for up to twelve months of short-time work - depen­ding on how long the reduc­tion in work is expec­ted to last. Since there is curr­ently no relia­ble indi­ca­tion of when the situa­tion will improve again, com­pa­nies can save them­sel­ves the trou­ble of recur­ring noti­fi­ca­ti­ons and imme­dia­tely report short-time work for a lon­ger period. It is pos­si­ble to ter­mi­nate or fle­xi­bly adjust short-time work at any time. 

Can indi­vi­dual emp­loyees also be brought back fle­xi­bly if this beco­mes necessary? How are they then remu­n­e­ra­ted?

If necessary, it is pos­si­ble to bring indi­vi­dual emp­loyees back from short-time work on a fle­xi­ble level, pro­vi­ded that rea­sonable dead­li­nes are obser­ved. They receive their nor­mal remu­n­e­ra­tion for the hours wor­ked and short-time work allo­wance for the can­cel­led hours.

How does short-time work affect the use of com­pany cars?

The pos­si­bi­lity of using a com­pany car despite a short-time wor­king phase should lead to a pecu­niary advan­tage sub­ject to income tax, which is taxable as before. If fewer trips to the work­place are actually made (<15), it may be pos­si­ble to switch from the 0.3 % rule to 0.002 % per actual trip.

Are trainees entit­led to short-time work allo­wance?

As a rule, it is not pos­si­ble to order short-time work for trainees, as the com­pany pro­vi­ding trai­ning is obli­ged to exhaust all means to ensure that trai­ning con­ti­nues. For example, the com­pany has the fol­lo­wing opti­ons:

  • Change of the cur­ri­cu­lum by brin­ging for­ward other lear­ning con­t­ents
  • Trans­fer to ano­ther depart­ment
  • Trans­fer back to the trai­ning work­shop
  • Orga­ni­sa­tion of spe­cial trai­ning events

Only when all pos­si­bi­li­ties have been exhaus­ted can short-time work also be con­s­i­de­red for trainees. If trainees are orde­red to work redu­ced hours, they are entit­led to pay­ment of the full trai­ning allo­wance for at least six weeks. In devia­tion from the sta­tutory mini­mum dura­tion, trai­ning and col­lec­tive agree­ments may pro­vide for lon­ger periods. Sub­se­qu­ently, they are entit­led to short-time allo­wance.

What about emp­loyees who were already on sick leave for an inde­finite period before short-time work began? Do these emp­loyees receive short-time work allo­wance or con­ti­nued pay?

If the emp­loyee had already been inca­pa­ci­ta­ted for work before the period of short-time work began, the emp­loyer must first con­ti­nue to pay con­ti­nued remu­n­e­ra­tion to the emp­loyer as long as short-time work had not yet been imp­le­men­ted. Howe­ver, as soon as and as long as an emp­loyee is unable to work due to short-time work, the con­ti­nued remu­n­e­ra­tion to be paid is redu­ced by the lost wor­king time. In addi­tion to the redu­ced con­ti­nued remu­n­e­ra­tion, par­tial sick pay is gran­ted in the amo­unt of the redu­ced short-time work allo­wance. This is paid by the emp­loyer. If the con­ti­nued remu­n­e­ra­tion period ends, the sup­p­le­men­tary sick pay also ends. This is replaced by gene­ral sick­pay. With the begin­ning of this bene­fit, the risk of repla­cing the lost remu­n­e­ra­tion is trans­fer­red in full to the health insurance. Sick pay takes prio­rity over the entit­le­ment to short-time work allo­wance.

Does the rece­ipt of short-time work allo­wance influ­ence the amo­unt of paren­tal bene­fits?

Yes. Paren­tal bene­fit amo­unts to 67 % of the average monthly net income from emp­loy­ment in the 12 months pre­ce­ding the birth. Com­pen­sa­tion bene­fits are not con­s­i­de­red as income. Short-time work allo­wance is the­re­fore not inclu­ded in the cal­cu­la­tion of paren­tal bene­fits because they replace wages.

Can the short-time wor­king allo­wance be inc­rea­sed by a sup­p­le­ment in the col­lec­tive agree­ment?

Various col­lec­tive bar­gai­ning agree­ments already pro­vide for (mainly mode­rate) top-up amo­unts to the short-time wor­king allo­wance. In con­trast, the col­lec­tive bar­gai­ning agree­ment for the retail sec­tor in North Rhine-West­pha­lia (NRW) has so far been reser­ved. Apart from a four-week notice period, which had to be obser­ved, the emp­loy­ers were lar­gely free to design short-time work. That time is over now. With retroac­tive effect from 1 March 2020 and limi­ted in time until 30 June 2020, ver.di and the Han­dels­ver­band Nord­r­hein-West­fa­len e.V. (Trade Asso­cia­tion of North Rhine-West­pha­lia) adop­ted a sup­p­le­ment to MTV Ein­zel­han­del NRW. Wit­hout giving the par­ties to the agree­ment any lee­way via an ope­ning clause to take acco­unt of the eco­no­mic per­for­mance of the com­pany con­cer­ned, an inc­rease in the short-time wor­king allo­wance to 100 % of the regu­lar net remu­n­e­ra­tion of the emp­loyees affec­ted by short-time wor­king for the first four weeks after announ­ce­ment and to 90 % at the end of the four weeks was adop­ted. In return, the period of notice shall not apply. To com­pen­sate for the tax lia­bi­lity on the top-up amo­unt (top-up pay­ments are taxable), the top-up amo­unt is also inc­rea­sed by a furt­her 15 %.

Note: Accor­ding to the Han­dels­ver­band Nord­r­hein-West­fa­len e. V., there are no plans for com­pa­ra­ble col­lec­tive agree­ments in other col­lec­tive bar­gai­ning areas.

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